Entrepreneurship and Well-being: Towards Developing a Novel Conceptual Framework for Entrepreneurial Sustainability in Organisations

Abstract

We explore, in conceptual terms, the relationship between well-being and entrepreneurial organisations. We pay attention to existing entrepreneurial organisations where a defined culture may have evolved over time. Interest in well-being has gained accelerated momentum in policy circles, management boards and among researchers, and studies in entrepreneurship abound celebrating innovation and the value of entrepreneurial growth. Yet, we do not appear to know much (beyond anecdotal insights) about high-impact driven entrepreneurial firms, their visionary high-octane fuelled leaders and the essential well-being of their creative employees and associates. We believe there is a difference between successful organisations and entrepreneurial organisations that achieve success, and that the well-being in these different types of organisations finds a different form of purchase in their unique environments. Moreover, not all entrepreneurial organisations are able to sustain their entrepreneurial competitive advantage. One possible reason for such instability is the well-being (or its deficit) in these organisations. We, therefore, argue that obtaining critical insights into the relationship between well-being and entrepreneurial organisations is essential. To this end, we navigate the literature on entrepreneurial firms and well-being and come up with some critical propositions for future research which could offer new insights into sustainable entrepreneurship which embraces the well-being of both the entrepreneurs and the employees who work with them.

Keywords

Well-being entrepreneurial innovative stress sustainability

Introduction and Overview

Stress, anxiety, depression and emotional mental health have dominated the headlines of numerous business and research publications recently. The Economist and The Financial Times have featured a series of articles in the subject culminating (for now) in a full-scale survey on mental health. Popular appraisals of the ‘best companies to work for’ show the close connection between employee well-being in corporations and their financial success. For example, take the retail food industry: while supermarket chains such as Safeway and Haggen in the United States of America and Morrisons and Tescos have announced declining profits and layoffs, a private company, Publix has never made an employee redundant in its 86 years of history (Tkaczyk, 2016). The latter grocer company has had the distinction of being ranked in the Fortune 100 Best Companies to Work for since 1998, and earned US$30.6 billion in revenue compared to US$24.5 billion five years ago. Much of the success of Publix is attributed to ‘happy employees’ whose loyalty manifests in the fact that its annual voluntary employee turnover rate is only 5 per cent compared with the retail industry average of 65 per cent. Figure 1 provides a summary of the growing attention being given to well-being as an issue of significance to employers, researchers and policymakers.

Figure 1.

The Topicality of Well-being. Why wellbeing is such a topical issue?

The association between employee well-being and successful organisations is well documented and analysed in the management literature. Howell et al. (2016) make the case that well-being acts as a natural motivator, improves physical health and longevity, and also promotes positive relationships. Improving well-being may also act as a catalyst for success for the organisation and this in turn could contribute positively to the economy (Howell et al., 2016). Investing on ways to improve employee well-being is also considered to be relatively easy and economical. In the United Kingdom, there are variations among employees of different types of organisations about specific issues of stress, mental health, sickness and how they see the involvement of their organisations in terms of involvement. However, there is an overwhelming sense of agreement over the link between work and employees’ well-being, as Table 1 indicates.

Table 1.

Level of Agreement with Attitude Statements (on Well-being Issues) by Organisation Size

	Size of the organisation
	Total%	Small%	Medium%	Large%
% Agree (Strongly/tend to agree)
Employers have a responsibility to encourage employees to be physically and mentally healthy	88	88	89	91
There is a link between work and employees’ health and wellbeing	88	88	93	93
The financial benefits of spending money on employee health and wellbeing outweigh the costs	57	56	66	70
In general, your employees do not want you to intervene in terms of their physical and mental health	51	51	44	33
Currently, sickness absence is a real barrier to productivity in your organisation	25	25	25	34
Unweighted base	2,250	1,122	555	568
Base: All.

Source: Young and Bhaumik/DWP (2013).

Note: Data are weighted to be representative of employers.

Our motivation for exploring this connection between well-being and entrepreneurship is based on the desire to lift the veil on entrepreneurial organisations to obtain a critical understanding of the relationship between what people achieve in entrepreneurial terms in entrepreneurial organisations, how they achieve what they do, and what effect it has on them and their colleagues and the culture of organisations that fly the entrepreneurial flag. What do employers of entrepreneurial organisations do to minimise the negative effects of stress and improve well-being? Do the negative effects lead to any kind of atrophy of entrepreneurial capability of organisations measured in terms of both organisational performance and the health of employees in such firms?

To the best of our knowledge, there appears to be insufficient knowledge and information on how entrepreneurial firms sustain organisational and personal well-being. We do not appear to have adequate knowledge of what lies beyond the inspirational glitter produced by stories of unicorns, heroic product and service providers, and accelerated initial public offering or exit strategies of high-impact firms. There is inadequate data to test critical hypotheses on entrepreneurial performance and people’s well-being in firms generating such performance. Crucially, we may not have an adequate conceptual framework to identify the variables and the dependent or independent factors that can help us obtain a critical understanding of the relationship between well-being and entrepreneurship. Given the growing interest in well-being, productivity, entrepreneurship and innovation, we set about identifying key concepts and issues with which to develop a set of critical variables that could be used to create a framework for conceptualising the relationship, and a set of propositions which could assist us in establishing some parameters for further, empirical investigation in the future.

Method and Structure

This is a conceptual article where we study the critical variables of entrepreneurship and well-being in the context of organisations in the United Kingdom. To this end, we first review the literature on well-being in organisations and entrepreneurial organisations tying and untying different concepts of intention, motivation, leadership, shared vision and high-achievement motivation with various constructs of well-being. We classify organisations as entrepreneurial based on the literature about entrepreneurial organisations, their entrepreneurial orientation (Covin & Wales, 2012), corporate entrepreneurship (Hsu, Tan, Jayaram, & Laosirihongthong, 2014; Miller, 1983) as well as the culture of innovative firms (Bessant & Tidd, 2013). We then reflect on the organisational practices of entrepreneurial organisations using a critical checklist of stress and well-being triggers, such as ‘pain points’ and ‘benefit points’ and their association with quantitative measures of organisational success such as returns on investment and value-added (Cigna, 2013).

The rest of the article contains an overview of the literature on well-being, innovation and organisations, a pathway to critical enquiry to enable us make appropriate connections between the three big issues of interest to us based on a set of key propositions. We end the article with a consideration of the possible implications for research and policy development on the subject of well-being and entrepreneurship.

Understanding Well-being, Organisational Innovation and Entrepreneurship

We assume that the well-being construct is a representation of organisational innovation, and that the identification and realisation of opportunity is part of the organisation’s entrepreneurial management process. Workplace well-being is vital to ‘human’ and ‘social and relationship’ capital, which are described as employees’ capabilities, competencies, experience and motivations to innovate or be creative; and networks of relationships that aid information and knowledge sharing among stakeholders. While there is some debate on the importance of well-being measures and policies at work (as shown in Table 1), there is much to be gained by understanding how well-being plays out in different types of firms. We are interested particularly in existing entrepreneurial firms and organisations where a defined culture may have evolved over time and where innovation articulates either a positive environment for employee well-being or a negative spiral of stress and anxiety.

Entrepreneurial Firms and the Environment for Well-being

Entrepreneurial firms are those that generate new products or services continually and are able to adapt and shape their organisations to achieve such ends. They demonstrate high growth in terms of turnover, profits and employment, often in a short period of time (Audretsch, 2012). Entrepreneurial organisations are driven by innovative endeavour and are proactive about opportunities and needs in the market (Stam & Elfring, 2008). Making that external orientation possible is their focus on and in the generation of a creative climate that encourages creativity, entrepreneurial activity based on creativity, innovation, continuous improvement and optimum resource mobilisation. These characteristics are shaped and realised by people who are driven by a ‘felt need’ to distinguish themselves as creative agents of change, economic and social progress. The human factor (as in ‘human capital’, the skills sets of people and, critically, their levels of satisfaction and well-being) plays a significant role in enabling entrepreneurial organisations to make high impact.

Feeling Good About Innovation and Entrepreneurship

The motivation to innovate, develop new combinations identify and seize new market-oriented possibilities (Duobienė, Duoba, Kumpikaitė-Valiūnienė, & Žičkutė, 2015; Hsu et al., 2014) are a function of autonomy at work, innovation and being proactive at work (De Jong, Parker, Wennekers, & Wu, 2015). Innovative ideas are generated in the minds of proactive, high-skilled and creative employees within an organisation (Duobienė et al., 2015) which could result in either positive well-being for employees who are able to cope with this kind of entrepreneurial culture or could adversely affect the employees’ well-being at work. It is uncertain in which way a pronounced drive for entrepreneurial achievement could affect the well-being of even the most innovative employee. Uncertainty in entrepreneurial endeavour, as Knight (1921) and Bhidé (2008) have argued from an economic point of view, brings its just rewards over and above a simple rate of return on investment for the entrepreneur. From an organisational development perspective, uncertainty at work and employee well-being can also affect the outcomes of an entrepreneurial organisation, positively or negatively (Sparks, Faragher, & Cooper, 2001).

Negative Stress Factors and the Entrepreneurial Drive

A continuous focus on innovation, fast-paced work, reduced people interactions and the regular nudging of employees to take initiatives and learn higher skills can create highly stressful environments (DeJoy, Wilson, Vandenberg, McGrath-Higgins, & Griffin-Blake, 2010; Farrell & Geist-Martin, 2005; Raya & Panneerselvam, 2013; Sparks et al., 2001). A stress-laden negative spiral affecting employees’ well-being in an innovative, competitive culture reveals a dark and dysfunctional side (Goldman, 2008) of organisational culture. Highly innovative leaders of organisations can induce a sense of failure among other achievers who do not share their drive or find it difficult to cope with the cult of the celebrity heroes and organisational star trekkers. The assumptions about the company culture play a vital role in creating a healthy workforce. For example, in the Silicon Valley, many companies assume that there is no need to provide job security and therefore, the companies do not expect their employees to be loyal (Peterson & Wilson, 1998, 2002), potentially creating distress in terms of work overload, effort–reward imbalance, job security and the organisational well-being (Peterson & Wilson, 2002).

What We Know and What We May Not Know

While we know much about the characteristics and drivers of entrepreneurial firms, we know less about the relationship between the well-being of employees and the entrepreneurial objectives or outcomes of these. While we know much about the significance of well-being for organisational success, we know less about the differentiated impact of well-being on entrepreneurial and other types of organisations. While we are cognisant of the typical measures used to measure entrepreneurial success, such as entrepreneurial orientation (Anderson, Kreiser, Kuratko, Hornsby, & Eshima, 2015; Covin & Wales, 2012; Covin, Green, & Slevin, 2006; Lumpkin & Dess, 1996; Stam & Elfring, 2008), entrepreneurial behaviour and outcomes (de Vries, 2001), we are unclear about their association or correlation with well-being. While we have obtained a critical understanding of entrepreneurship and entrepreneurial success, entrepreneurial intentions (Shinnar, Giacomin, & Janssen, 2012), motivations, leadership (Renko, El Tarabishy, Carsrud, & Brännback, 2015; Ripoll, Rodríguez, Barrasa, & Antino, 2010), behaviour (De Jong et al., 2015) and a social cognitive perspective (Hmieleski & Baron, 2009), at the level of individual entrepreneurs, and at the micro-contextual level (e.g., Avlonitis & Salavou, 2007; Baron, 2008; Hayton, 2005; Shane, Locke, & Collins, 2003), we know less about their links with well-being at the organisational level.

The components of innovative and entrepreneurial organisations include, inter alia, shared vision, leadership, the will to innovate, a gathering of key promoters, champions, ideators and gatekeepers, and effective team work, all forming a part of a high-involvement innovation culture in a creative climate place (Bessant & Tidd, 2013). We see the nexus of people, organisations and environment enabling entrepreneurship (Mitra, 2013), but we know less about how these components play out in the well-being of the people who work in these innovative organisations and whether the nurture of such well-being has special value for these organisations. These issues raise questions and propositions about how entrepreneurial organisations can navigate the waters of well-being to sustain innovation and entrepreneurship in healthy environments.

As we have noted earlier, the negative and complex impact of rapid changes in the business environment can affect employees and the organisation as a whole. These assumptions can make or break the situation. In this case, it hampers the employee’s well-being as it creates a form of dysfunctionalism brought about by various kinds of distress (Peterson & Wilson, 2002).

Based on the above considerations, we identify three areas of enquiry: (a) the relationship between well-being and sustainability, (b) the association between well-being and innovative growth and (c) the relationship between poor well-being and the dark side of entrepreneurship. We suggest three propositions that could provide a worthwhile basis for investigating the value of well-being and productive, sustainable entrepreneurship.

Well-being and Sustainable Entrepreneurship

Proposition 1 (P1): Workplace well-being, particularly those of employees working in an entrepreneurial organisation, is not only a critical parameter to be included while determining the organisational success but also makes the business more sustainable for future growth.

Well-being and Innovative Growth

Proposition 2 (P2): Entrepreneurial organisations are better able to improve performance by understanding what augments and hampers workplace well-being, in order to have sustainable innovative growth in a highly productive environment.

Negative Well-being and the Dark Side of Entrepreneurship

Proposition 3 (P3): Dysfunctional entrepreneurial organisations breed a culture of stress, anxiety and negative well-being which over time can adversely impact on sustainability and growth.

Figure 2 below summarises the overarching conceptual framework to enable us to explore the relationship between well-being and entrepreneurial organisations.

Figure 2.

Sources: * Mitra (2013); Tidd and Bessant (2013); Simon (2009); Westland (2008); Prahalad and Krishnan (2008) Kim and Maurbogne (2005); Galbraith (2004); Muzyka (1999); ** Ryff and Keyes (1995); Robertson and Cooper (2011); Reid and Ramarajan (2016).

Implications

Researchers in scientific and applied management fields are currently attracted to study and explore humanistic concepts/areas which have a considerable impact on organisations and their management, thereby focusing on the health and well-being of the human capital in an organisation (Mayer & Boness, 2011). We contribute to this field of study by introducing the entrepreneurial dimension to the debate, distinguishing between well-being in entrepreneurial and other types of organisations. The purpose of this conceptual article is to draw down specific propositions for theoretical and empirical enquiry into the relationship between entrepreneurial organisations and well-being. We aim to develop a model from the further elaboration of these propositions so that we can construct a basis for empirical work in the future. We believe that the conceptual framework will provide a unique value proposition for researchers in the entrepreneurship, management, and organisational development and psychology arenas. The framework could also contribute to the framing of policymaking in the area of stress management and well-being development by managers and policymakers.

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