Foundational embeddedness and enterprise values evidence from creative

Foundational embeddedness and enterprise values: evidence from creative industries entrepreneurship Dr Jacob Salder Alliance Manchester Business School University of Manchester

Small-firm embeddedness • Increasingly key resource in small firm practice: enables a wider set of networks and relationships (Baum et al, 2000; Burt, 2000; Gnyawali & Madhavan, 2001). • Framed as an input to leverage or adapt (Burt, 2004; Simsek et al, 2003) • Embeddedness also exists as a value set which shape decisions, and thus the ability to build and utilise certain relations

Embeddedness: a foundational reading • Conventionally read as a dependency: part of a broader firmbased toolkit compensating internal resource limitations • Relationships are here integral: read as defined via firm context and business logics • Consistent with Granovetter’s (1985) social and structural embeddedness: the social does not exist solely in the business context • Organisations are peopled entities: bounded rationalities, emotional attachments, normative systems, tensions between function and attachment • Role of value sets in limiting options and determining decisions

Defining foundational embeddedness Evolutionar y Traditions Adaptive Place-based attachment Family values Social enterprise: tiered bottom line Culture Place-/Firmbased heritage Valuebased Flexible specialisations Creative sector: artistic freedom and integrity

Value sets and business logics • Foundational embeddedness represents a specific context in which enterprises operate distinctive from dependencies • Business processes – dependency embeddedness – is shaped by foundationals: processes developed as compensatory methods • Also present limitations to flexibility: obligations, expectations and value systems (Uzzi, 1997) • Foundationals shift the business decision making dynamic: adaptation here refines process rather than values/objectives • How does foundational embeddedness occur in firms, and how does it interact with forms of dependency embeddedness?

Methodology • Arts-based Creative Industries (ABCI): growth sector involving new forms of business practice, businessaesthetic dynamic, push for business formalisation • Case study approach: six ABCI micro-firms involved in original content creation for contemporary theatre/ performing arts • Face-to-face interview using an SME diagnostic, information from websites and public materials • Relationships and resources interpreted using foundation and dependency embeddedness framework

Company Est. Employees/ Associates ABP 2008 1 Contemporary theatre creation and performance Production services for touring performers/companies Public sector arts project management KWP 2015 10 Multi-sensory performance and events Commissions Workshop and consultancy FMS 2011 5 Storytelling and theatre creation and performance Writing services VT 2006 20 Full masked theatre performance Workshops / commissions KE 2005 9 Devised performance theatre production Commissions RKD 2004 27 Contemporary dance productions Choreography services Core creative output Additional portfolio 1 Additional portfolio 2 Education services

Static foundations and related dependency • Aesthetic value set determines core objective of firm established with no business proof of concept: “developing a product no-one yet knows they want” • Limits network and relation options in the development process: state subsidy, cultural infrastructure, universities • Product novelty requires wider inputs: performers and technicians but also subject specialists relevant to theme • Production and subject specialism enhance portfolio and develop new networks/ dependencies

Adaptive dependency / flexible foundations • Aesthetic value set defines a cultural – rather than profit-based – baseline: this is not fixed • Supplementing resource-intensity and high-risk of work, flexibility and pursuit of supplemental income streams integral • Here, many challenges duplicated: low pay, precarity, high demand contracts leads to risk trade-off • Short-term security vs lost creation time • Types of company formalisation blend objectives, reshaping foundations and adapting business model: limitations apply

Bypassing business logics • Pursuit of business opportunities sees both extension of networks and development of portfolios • Fine balance between business sustainability and maintaining values • Incremental responses: forms of incorporation (CIC), geographical spread. • Separation risk: business essentials vs founders objectives

Discussion • Foundational embeddedness exerts significant pressure on businesses and their adaptability • Value sets shape both dependency embeddedness (networks/relations) and development strategies: despite certain rigidities, can create flexibility and opportunity • Original content creation ethos leads to unique resource configurations, and thus models of adaptation/diversification • Business-Value intersection reinterprets certain business logics: pursuit of personal objectives more weighted than business opportunities. • Embedded personal-level value sets drive (or limit) business progression

Conclusion • Firm embeddedness in complex operational environments key for enterprise development: relative to personal-level objectives • Embeddedness thus occurs in two forms: dependency (firmlevel) and foundational (personal) which are not always aligned • Foundationals are components shaping development, but indicate flexibility to allow pursuit of personal objectives • Flexibility within the value set helps stimulate esoteric forms of entrepreneurship and enterprise • Within this, clear separation between firm- and personal-level objectives: firm is disposable if unable to facilitate personal objectives • Separating personal-level factors from entrepreneurial embeddedness leads to partial understandings: greater consideration of personal and emotional contexts necessary

Thank you Dr Jacob Salder Alliance Manchester Business School University of Manchester jacob. salder@manchester. ac. uk