Exploring Transgenerational Entrepreneurship in Family Firms
Edited by Kevin Au, Justin B. Craig and K. Ramachandran
Chapter 8: The Belcher Family Gain Legitimacy in a New Industry: Sailing into the Unknown
Justin Craig, Wayne Irava and Ken Moores INTRODUCTION This chapter documents the challenges that entrepreneurial family businesses face in gaining legitimacy in a new industry. Here, we feature the founding generation of Australia’s Belcher family business and trace its evolution from start-up to industry leader. The integral role the entrepreneurial founders John and Jane Belcher played in positioning a new industry, the management rights industry, is also explored. More than half of all new ventures fail. This number is significantly higher in less established industries where a dominant logic has not been established. Though there are many contributing reasons for venture failure, the inability of new start-ups to access critical resources necessary for survival has been discussed as being pivotal in this regard. This phenomenon has been referred to as ‘the liability of newness’ (Suchman 1995). However, many start-ups are able to succeed by overcoming the liability of newness, and as a consequence, gain legitimacy. With legitimacy attained, the start-up is able to access additional resources, such as distribution networks to more munificent markets and more easily accessible financial capital (Zimmerman and Zeitz 2002). This situation holds true for new industries. Various theoretical arguments have been tabled to better understand this phenomenon. For example, institutional theorists have described how successful start-ups quickly move beyond the perception of being an industry ‘fledgling’ (for example, Mitchell et al. 1997; Suchman 1995). These ventures attain credibility through their perceived acceptance and appropriateness, consistent with the regulative, normative and cognitive industry practices and guidelines....
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