Founders in the Living-Dead Trap: A Theoretical Exploration at Entrepreneurship’s Dark Core

Casas Tomas () and Hilb Michael
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Casas Tomas: University of St. Gallen, Dufourstrasse 40, St. Gallen 9000, Switzerland
Hilb Michael: University of Fribourg, Bd. de Pérolles 90, Fribourg 1700, Switzerland

Entrepreneurship Research Journal, 2016, vol. 6, issue 4, 401-423

Abstract: This paper explores the concept of the living-dead trap (LDT), a pervasive state of entrepreneurship resulting from the decision to persevere in the operation of a venture in the face of sustained financial underperformance and personal psychological disutility. Financially underperforming firms can survive for long periods, usually with injections of sweat equity and debt, often decimating in the process the capital of their founders and investors as well as the obligations incurred to employees and other creditors. More specifically, this paper suggests a personal composite of specific cognitive and affective processes that leads entrepreneurs to commit to “failing but not failed” projects. That is, to fall into a trap known as the living-dead trap. We posit the living-dead phenomenon as a most pervasive state in firm founding drawing on cognitive and affective perspectives to model the attendant decision-making processes.

Keywords: living-dead founders; under-performance; perseverance; entrepreneurial behavior; cognitive perspective; behavioral trap (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1515/erj-2015-0029

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