Misfit theory of entrepreneurship

Hofstede et al. (2004) suggest that misfit individuals attempt to start ventures because they do not share the dominant cultural values. The assumption is that misfit individuals are dissatisfied with their job prospects and are more likely to attempt entrepreneurial careers as alternatives.

The misfit theory of entrepreneurship has been used to explain why immigrants are often more entrepreneurial than native born populations. Immigrants' credentials may not respected in their new home countries. Their skills may be undervalued, their certifications and degrees may not be trusted or considered invalid or inadequate. Moreover, immigrants from countries with a different language and culture find it more difficult to integrate and find it more difficult to find lucrative employment (Kahn et al., 2017).

In sum, imperfect information from foreign experience and education coupled with lingual and cultural differences make it more difficult to enter the workforce as salaried employees. This necessitates an alternative occupation like entrepreneurship. Where immigrants find it difficult to find employment in their areas of expertise, they may pursue entrepreneurial ventures as an alternative to working in low paying jobs outside their fields.

Others have argued that pirates, hackers and gangsters also represent a type of misfit entrepreneurship (Clay and Phillips, 2016) though at times a potentially unproductive or destructive type. Overall, it is interesting to think of entrepreneurs as rule breakers. Perhaps there exists some potential for cross-overs with informal entrepreneurship and institutional theory.

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Kahn, S., La Mattina, G., and MacGarvie, M. J. (2017). “Misfits,”“stars,” and immigrant entrepreneurship. Small Business Economics, 1-25.

Clay, A., and Phillips, K. M. (2016). The Misfit Economy: Lessons in Creativity from Pirates, Hackers, Gangsters and Other Informal Entrepreneurs. Simon and Schuster.

Hofstede, G., N. Noorderhaven, A.R. Thurik, L. M. Uhlaner, A.R.M. Wennekers, and R.E. Wildeman. 2004. Culture's role in entrepreneurship: self-employment out of dissatisfaction. In Innovation, entrepreneurship and culture, eds. T. E. Brown and J. M. Ulijn, 162-203. Cheltenham: Edward Elgar.

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