Institutional theory and institutional racism: barriers to business success faced by POC entrepreneurs and the family firm advantage
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 16 November 2023
Issue publication date: 29 November 2023
Abstract
Purpose
Compared to Whites, People of Color (POC) in the USA face substantial cultural, structural and institutional challenges on their paths to entrepreneurial success. Many of these challenges have their roots in institutional racism—pervasive discriminatory practices and policies found within institutions. Institutional theory suggests that organizations gain access to institutions and resources when they conform to “appropriate” business practices. How does the reality of institutional racism square with institutional theory when many of those institutions, like banks, are fundamentally afflicted by racist practices and norms? Can another institution, the family, act as a resource substitute to provide POC business owners the necessary resources for success?
Design/methodology/approach
Focusing on White-, Black- and Asian-American business owners, the authors analyze data from the USA. Census's Annual Business Survey.
Findings
Despite vast performance differences between POC- and White-owned businesses, family firms of every racial group outperform their same-race nonfamily counterparts. Idiosyncratic resources families bring into family firms, known as familiness, appear to help mitigate the challenges to entrepreneurial success that POC face.
Practical implications
Policy makers should consider specific types of support different entrepreneurs require given the kinds of hurdles racial minorities continue to face in the USA.
Social implications
Despite scholarly attention on family firm heterogeneity, there is scant research on race.
Originality/value
This research is one of the first to explore the implications of institutional racism on institutional theory and the first to employ this concept within the context of family firms.
Keywords
Acknowledgements
The authors are grateful for the constructive feedback received from two anonymous reviews during the review process, as well as the insightful recommendations from Editor Dr. Lois Shelton.
Citation
Kushins, E.R. and Quispe-Agnoli, M. (2023), "Institutional theory and institutional racism: barriers to business success faced by POC entrepreneurs and the family firm advantage", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 9/10, pp. 2157-2174. https://doi.org/10.1108/IJEBR-06-2022-0494
Publisher
:Emerald Publishing Limited
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