Groups Matter: Social Embeddedness of Entrepreneurial Activity

This article argues that small groups matter in order to understand the coordination of entrepreneurial activity. Not only do small groups form and reproduce during the collective action of entrepreneurship, or rather entrepreneurial groups, but various forms of small groups provide trust and solidarity that enables and shapes the formation and boundary maintenance of entrepreneurial groups. Starting from a cursory overview of a sociology of entrepreneurship and drawing from both insights of a group sociology and the discussion of Granovetter’s dual problem of solidarity, this chapter identifies the variety of small groups as an important factor to understanding the variety of entrepreneurial activity. A contrast of two examples within one economic sphere, entrepreneurial families in German family capitalism, and start-up ventures in the Berlin start up field, illustrates how various forms of entrepreneurial groups co-exist. These forms draw from different small groups, the family, and the work team, with their respective institutional setting, when navigating the selection and exclusion of group members. Overall, this chapter sets up small groups as an additional layer to be considered in the social embeddedness of economic action.