The symbolic management of a startup

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In this assignment the discourse would be initiated by highlighting a few key words would add significant value to the audience if the nomenclature in addition to their denotations is understood. Various factors are required to be considered during the start- up phase of a business for instance the cultural / social factors, resources (capital, human resources, etc), perception of the business or the entrepreneur (viewing the business or the Entrepreneur from the customers eyes), etc. The perception from the view of the customer is the main focus of this assignment as it relates directly to the symbolic management or impression management.

"Symbolic management is the performance of symbolic actions, that is, a distinct form of impression management (Arndt and Bigelow, 2000)"." Symbolic management can at best be construed as a subset of impression management, but not all forms of impression management are symbolic".

Symbolic actions are actions in which the actor displays or tries to draw other people's attention to the meaning of an object or action that goes beyond the objects or action's intrinsic content or functional use. A symbol is something that stands for or suggests something else; it conveys socially constructed meanings beyond its intrinsic content or obvious functional use (Morgan, Frost, and Pondy, 1983). Objects can display both intrinsic and symbolic dimensions (Lievens and Highhouse, 2003; Rafaeli and Vilnai-Yavetz, 2004).

Impression management refers to any behaviour that has the purpose of controlling or manipulating attributions formed by others (Tedeschi and Riess, 1981) by regulating the information that is presented about people or their organizations (Schlenker and Weigold, 1992; Ashford et al.1998). Gardner and Avolio (1998), however, have identified the development and manipulation of symbols as a particular subset of impression management, which they call "staging." Moreover, some impression management actions may have little symbolic meaning and suggest little beyond intrinsic use.

What are the various discussions around symbolic management? Is it really essential at the start up phase of a business? Is it significant for entrepreneurs to be culturally aware? Does culture need to be integrated it into their business model? All of these questions are explored and consolidated to present a holistic view of the significance of "symbolic management" in the following sections.

Nature of enterprise culture/ discourse and entrepreneurship

An enterprise is a purposeful or industrious undertaking especially one that requires effort or boldness;

I used to have a nightmare for the first six years in office, that when I got the finances right, when I had got the law right, the deregulation etc., that the British sense of enterprise and initiative would have been killed by socialism. I was really afraid that when I had got it all ready to spring back, it would no longer be there and it would not come back…But then it came. The face began to smile, the spirits began to life, the pride returned (Margaret Thatcher, Sunday Times, 8 May 1988)

The creation of an enterprise culture was about igniting a cultural revolution which would "remake" the men and women of the late twentieth century, who were products of nearly a century of "creeping collectivism" (Marquand, 1992)

The establishment of huge policies support was created after Margaret Thatcher made this statement in 1988 to ensure adequate support was available to small businesses. More value and somewhat of a revolution was created around entrepreneurship and enterprises, although entrepreneurship has been around for centuries the elements of bringing about a cultural and societal change through small businesses was rejuvenated by Margaret Thatcher in conjunction with various researches done in the US with results significant revenue would be generated form small businesses than the historical dependence on large Multinationals.

This platform increased the number of small businesses in the western world however there is a vast amount of unsuccessful entrepreneurs to successful ones. However, only a small fraction of inventions developed by independent inventors reach the market (6.5%). The probability of reaching the market is four to eight times less than for inventions developed by established firms. Why do only a fraction of inventions developed by independent inventors become commercialized when those that do commercialize are quite profitable and survive for as long as other start-ups?

Besides having the characteristics of an entrepreneur which are generally the follow:

Using initiative;






Strong work ethic;

Daring spirit;


There are also abstract characteristics required to be available in an entrepreneur for instance the enterprise culture.

'….entrepreneurs become skilled users of cultural tool kits rather than cultural dopes'

'…founders of new ventures who utilize encompassing symbolic language and behaviours will gain cognitive legitimacy more quickly than others'

'..entrepreneurs must be skilled cultural operators'

(Lounsbury and Glynn, 2001:549)

How can an entrepreneur develop the cultural element of enterprise? Below are the 3 dimensions of enterprise and their definitions accordingly:

Ethical Reform

Individuals should involve themselves in activities that display 'enterprising' qualities such as self-reliance, risk-taking, autonomy, daring etc

Institutional Reform

Enterprising traits most likely to be developed within private sector organizations, particularly small businesses

Cultural Engineering

Link between institutional-ethical dimensions can be severed - explicit enterprise strategy needed in which cultural engineering through education takes place (Gibb 1986, Keat 1991)

Range of enterprise policies, strategies, initiatives used to shape, influence and regulate enterprising behaviour

(Taken from lecture notes CB887 Entrepreneurship Lecture 1 slide 15)

Is there a possibility of an entrepreneur having considered the dimensions of enterprise and the various other characteristics that an entrepreneur generally should have could still be unsuccessful?

Small Business owner vs. Entrepreneur

Entrepreneurship is widely understood to be an individualistic activity with the visionary battling against all odds to make the idea work. The term "Entrepreneur" is seemed to be a heroic person which has led to various discourses on whether an entrepreneur is born or made.

According to a survey by Northeastern University's School of Technological Entrepreneurship, there isn't really such a thing as an accidental entrepreneur. Some 62% of entrepreneurs surveyed say they were inspired to start their own companies by their innate drive. Work experience and the success of their peers were cited by only 21% and 16%, respectively, as factors. In fact, 75% of those surveyed say they launched their first venture by the age of 30.

So while business owners--those who create jobs for themselves out of circumstance or necessity--can be created, it seems true entrepreneurs are born. The DNA of true entrepreneurs propels them to get on the roller coaster ride that comes with launching a venture. They defiantly disregard red flags of caution, the words of naysayers, or any statistics that conclude their business may fail.

There are two schools of thought about what makes an entrepreneur. The first is that anyone can do it if they really want to, provided they put in the effort. The second - and this is the view of psychologist Adrian Atkinson - is that you have to be a certain type of person and, if you are not that type, you are wasting your time.

On the discourse of whether an entrepreneur is born or made all results so far have been very subject although personally I feel circumstances can propagate an ordinary person without any premeditated plans, to become a successful entrepreneur.

Another significant discussion is whether or not a small business owner can be called an entrepreneur; Looking at the quote from Hewitt:

Small businesses are the lifeblood of the economy. They are at the forefront of this government's efforts to promote enterprise, innovation and increased productivity. Small firms are vitally important because of their role in the supply chain, the competition they stimulate and the ideas and products they bring to the market place. A few figures illustrate this vividly. The 3.7 million SMEs represent 99.8% of all UK businesses. They account for over half the UK's economic activities, providing 56% of non-government jobs (excluding financial services) and 52% of turnover. Small firms are and will continue to be the main providers of new jobs (Hewitt, 2000).

The ultimate goal of the entrepreneur is to make money and therefore any successful small business owned by a person or a group of people then they definitely qualify to be called entrepreneurs. The same attributes required to run a large corporation are the same attributes required to run any successful small business. What is the definition of a "small business"? It is an enterprise with less than 50 employees, with a turnover and balance sheet figure of less than 10million Euros. Another factor to bear in mind asides profitability in the business is the fact that the small business owner might not want to explore the option of expansion to a larger business.

Why focus on growth?

Since the 1980s it is believed that an economy such as that of the UK would benefit substantially from a population of efficient and resilient small and medium sized businesses

It has been extensively argued that the way to create strong and resilient SMEs is to focus on small growth businesses

Research indicates that the proportion of small businesses which fall into the growth category ranges between 5 and 10 per cent

It has been suggested that out of every 100 start-ups only 30 survive for more than 10 years and that only 3 or 4 firms out of this 30 grow to any substantial size

Out of the original 100, the 4 growth firms will create half the jobs in the group over a decade

In general small businesses can be divided into 3 broad categories:

Businesses that fail within a short time span

Businesses that survive but remain small

Businesses which achieve rapid growth

(Lecture Notes CB887 Entrepreneurship Lecture 7 slide 8)

Small businesses visions should not always be looking to expand; there are factors to be considered like the nature of business, location, costs, etc. Another important factor is the economy actually thrives off the small businesses as a significant amount of the society is employed by SME's.

Below are some statistics to endorse this analysis:

There were an estimated 4.5 million business enterprises in the UK at the start of 2006

Almost all of these enterprises (99.3%) were small (0 - 49 employees)

Only 27,000 (0.6%) were medium-sized (50-249 employees)

Only 6,000 (0.1%) were large (250+ employees)

Small and medium-sized (SMEs) enterprises accounted for more than half of the employment (58.9%) and turnover (51.9%) in the UK

Small businesses alone accounted for 47.1% of employment and 37.2% of turnover.

A small business owner would have the symbolic actions required to be an entrepreneur due to the fact that initially before the small business started off the from the inception stage there would have been a requirement for resources either financial or human capital which the business owner would have had to source. This is the same position an entrepreneur would have to been in when initiating an idea. Therefore the there is no reason why a business owner is not justified to themselves an "Entrepreneur".

Symbolic Management

Mediation between individual and environmental expectations

Is it possible for an individual to mediate between the novel aspects of a business and abide by the expectations and norms of the cultural environment they are located in?

We believe that a focus on cultural entrepreneurship has the potential to contribute to the development of a more comprehensive theoretical synthesis that crosses the fields of strategy, entrepreneurship, and organizational theory. While the study of cultural processes has been central to institutional and identity researchers in organizational theory, it has been somewhat backgrounded in entrepreneurial and strategy research. At the same time, institutional and identity approaches to organizations can benefit greatly by better accounting for processes on which resource-based researchers focus. We believe that bringing institutional, identity, and resource-based views together through the study of entrepreneurial storytelling can usefully inform our understanding of how new as well as already existing firms acquire resources and create wealth.


Successful entrepreneurs are not passive participants in their cultural context but rather are skilled cultural managers who use culture strategically t deal with the low level of credibility and legitimacy that stems from a lack of supporters and performance history - this is symbolic management( Zott & Huy, 2007: 74)

Looking at the statements above it is imperative that the entrepreneur integrate the cultural aspect of the environment or else they are setting themselves up for failure. How else is it possible to portray one as having legitimacy where there is not previous track records to view;

Although the intrinsic content or functional use of an action is often measured by economic or performance yardsticks (e.g.speed, defect rate), its symbolic meanings in a particular cultural milieu are evaluated according to subjective dimensions such as emotions, preferences, and values (Rafaeli and Vilnai-Yavetz, 2004), as well as logic and precedence, which can influence the decisions of resource holders (Brown, 1994).1 The intrinsic dimension of entrepreneurship could involve organizing actions to enact a novel idea, such as developing business plans, finding investors, hiring employees, and attracting customers (Aldrich, 1999; Delmar and Shane, 2004). Meanwhile, the symbolic dimension of these actions can make the new venture familiar and credible to key groups (Lounsbury and Glynn, 2001). Hargadon and Douglas (2001), who studied Thomas Edison's introduction of the electric lighting system, suggested that entrepreneurs design and present their innovations to mediate between the novel features of their offerings and the expectations, norms, and rules of their institutional environments. In this way, they use symbolic action to create the legitimacy they need to acquire resources.

It is perceived that an entrepreneur is at risk of not getting the appropriate level of resources if they do not appear to be credible or act in a manner that does not conform to societal beliefs and values; Hence before the resource holder the entrepreneur lacks legitimacy.

Symbolic Actions

As Feldman and March (1981) and Pfeffer (1981) noted, using symbols so that actions will be interpreted in ways that are compatible with prevailing norms and values is especially important when stakeholders find it hard to assess and control precisely what they might get from an organization. Symbols suggest categorizations that help people frame social situations or interpret ambiguous ones (Ashforth and Humphrey, 1997), and they are important for entrepreneurs, who often work in highly uncertain contexts.

For instance before the development of a product, there is no physical evidence that this product would be a success or not, therefore the stakeholders would have to rely on their understanding of the potential of this product in the society and the whatever the entrepreneurs would enlighten with. There are various methods an entrepreneur can use but here are a few below:

Sample selection and data collection

Data analysis

However it's not just the methods of symbolic actions that matter but the delivery of the information gathered in other words a promoter can be prepared but not having the right marketing skills would terminate the product. It's better for a good promoter to promote a bad product than the other way round.

As discovered by Zott & Huy, (2007: 84):

The four key skills required by an entrepreneur when promoting a product and the Illustrations of High and Low Skilfulness in Symbolic Action along Four Dimensions


High skilled response: Considers cash constraints, uses technology to work around them

Low skilled response: Reflects on constraints, yet not sure how to work around them.


High skilled response: Founder understands how important database is for performing symbolic actions and is able to build and maintain it conscientiously.

Low skilled response: Is not even aware of factors that enhance credibility.


High skilled response: Founder pays attention to other people's perceptions.

Low skilled response: In the early days, founder failed to take resource holders' perceptions into account; investors expected industry-specific knowledge.


High skilled response: Founder combines symbolic action with a personal, face-to-face communication style.

Low skilled response: Founder realizes now that initial process based on cold-calling potential customers did not work yet did not consider a more proactive approach; adopted a passive stance instead.

Start Up Phase and Symbolic Management


The start up phase of a business is a crucial stage which tests the capability of the entrepreneur; In order to acquire resources there are some key attributes that resource holders would be keen to see as a symbolic action displayed by the entrepreneur.

Zott & Huy, (2007: 87) researched this attributes and the results were as follows;

Personal Capability: Are there any qualifications achieved by the entrepreneur which may have some relevance to the development or promotion of the product? Did they go to a prestigious school?

Personal commitment to the venture: Some founders inour study accepted financial sacrifice and delayed persona gratification through a variety of imaginative schemes that not only preserved precious cash for their firms (intrinsic dimension) but also emphasized their personal commitment to them (symbolic dimension).

Professional structures: Conveying professional structures refers to ways of presenting the visible attributes of the company that are usually taken for granted, for example, its legal status and corporate hierarchy (Meyer and Rowan, 1977).

Professional processes refer to organizational activities that conform to rules of proper behaviour and attitudes with respect to rationality and accountability (Weber, 1947). As Feldman and March (1981) pointed out, organizational processes may be more important than the outcomes they produce. We found that entrepreneurs acted symbolically to convey the professionalism of their organizational processes, such as hiring staff using very sophisticated recruiting techniques.

Prestigious stakeholders: As an ongoing concern, a new firm needs to be seen in good company with high-profile organizations and individuals. Our data showed that entrepreneurs attempted to achieve these goals through symbolic actions such as dropping high-profile names, mentioning relationships with famous people or companies, or involving prestigious outsiders as company representatives in meetings.

Personal attention: Entrepreneurs from various sample firms remained concerned that the relatively small size of their ventures made them easy to overlook or forget. Acutely aware that larger companies deal with many suppliers, some (but not all) entrepreneurs made conscious efforts to be noticed or remembered. By doing so, they maintained and expanded their resource holders' awareness of them, to generate repeat business or be introduced to other companies.


Entrepreneurs deal with a variety of resource providers who have different interests and values, a symbolic action that appeals to one might not appeal to another. The "law of requisite variety" (Weick, 1979) is likely to apply here. Furthermore, enacting a wide variety of symbols is likely to be more effective than limiting one's range, because symbols might be interdependent and reinforce each other's meaning. Entrepreneurial firms need to convey credibility by using many symbols and cannot afford to rely on the effects of only a few.

The entrepreneur needs to have engaged in adequate research and to believe and have a broad understanding of their society and environment as a whole.

The symbolic management of an entrepreneur is the determining factor to whether or not resources can be acquired and as such is a significant area the entrepreneur is required to invest substantially in before seeking resources. Without the resources, there is no product, service or business.