Start-ups, Hype and Morality: How Entrepreneurial Framing Affects the Moral Legitimacy of Hyped Ventures

Elena Dalpiaz
Università della Svizzera Italiana

Abstract:

Hyped ventures use framing to align with the expectations of the hype and gain the support of key stakeholders such as investors and employees. Yet, while doing so, they engage all too often in morally questionable practices that jeopardize their moral legitimacy, which is difficult to repair. To explore this troubling phenomenon, we conducted a longitudinal case study of the framing efforts of a hyped fintech venture. Our study uncovers the role of two processes (“hype fundamentalism” and “moral awakening”) that encompass specific frames and mechanisms through which leaders over time entrench and then uproot a “hubristic culture” in hyped ventures that enables moral recklessness. We also uncover how leaders’ frame of the “cult of growth at all costs” triggers emotional dynamics among employees that help the venture fulfill the hype in the short run but set the venture up for a dramatic emotional climbdown in the long run. These insights offer contributions to scholarship on cultural entrepreneurship, entrepreneurial framing and new venture legitimacy.

Elena Dalpiaz is Full Professor of Management at USI Lugano (and on leave from Imperial College Business School, London). Her research interest lies at the intersection of organization theory, strategy, and entrepreneurship. Her research focuses on cultural entrepreneurship, that is on how mature organizations and start-ups draw upon cultural resources (such as identity, narratives, institutional logics, traditions, and other symbolic elements) to attain legitimacy as well as strategic and organizational outcomes. Her research has been published in leading management journals, including Administrative Science Quarterly, Academy of Management Journal, Strategic Management Journal,  Organization Science, Entrepreneurship Theory and Practice, Journal of Business Venturing, Strategic Organization, and Advancement in Strategic Management.

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