Back to Reality: How Ventures Maintain Legitimacy Through Pragmatic Decoupling

Research highlighted the importance of stories for entrepreneurial ventures to gain pragmatic legitimacy and overcome the liability of newness. Yet, scholars have devoted scant attention to maintaining legitimacy and overcoming threats that emanate from ventures' inability to meet the expectations set by initial entrepreneurial stories. Based on a longitudinal single case study (2011-2023) of a venture that builds infrastructure for generating and delivering electricity in remote rural communities in Kenya, we propose a process model of maintaining legitimacy. By analyzing the accounts, the venture uses over time, we identify a process of “pragmatic decoupling” by which ventures decouple their underperformance from their entrepreneurial capabilities via three distinct categories of pragmatic accounts: contextualizing struggles, capitalizing on experience, and enacting entrepreneurial flexibility. Our proposed model reveals that entrepreneurial ventures deploy pragmatic accounts rather than stories to maintain legitimacy and convert underperformance to an acquired entrepreneurial capability that directs investors’ attention to future potential instead of past losses.      «

Research highlighted the importance of stories for entrepreneurial ventures to gain pragmatic legitimacy and overcome the liability of newness. Yet, scholars have devoted scant attention to maintaining legitimacy and overcoming threats that emanate from ventures' inability to meet the expectations set by initial entrepreneurial stories. Based on a longitudinal single case study (2011-2023) of a venture that builds infrastructure for generating and delivering electricity in remote rural communiti...     »