Birds of a feather don't always flock together: Identity management in entrepreneurship

Available online at www.sciencedirect.com

Journal of Business Venturing 24 (2009) 316–337

Birds of a feather don't always flock together: Identity managementin entrepreneurship☆

Dean Shepherd a,⁎,1, J. Michael Haynie b

a Kelley School of Business, Indiana University, 1309 East Tenth Street, Bloomington, IN 47405-1701, United Statesb Department of Entrepreneurship and Emerging Enterprises, Whitman School of Management, Syracuse University,

721 University Avenue, United States

Received 1 December 2006; received in revised form 1 October 2007; accepted 1 October 2007

Abstract

The act of entrepreneurship typically confers ‘distinctiveness’. However, in satisfying the psychological need to be distinct,entrepreneurs may at the same time foster a psychological deficit in feelings of belonging, leading to diminished psychological well-being. Investigating this potential trade-off through the lens of Optimal Distinctiveness Theory, we develop and model strategiesappropriate for managing multiple identities, offering an explanation for why some entrepreneurs are able to balance distinctivenessand belonging, fostering psychological well-being, while others are unable to do so and experience entrepreneurship's ‘dark-side’.Published by Elsevier Inc.

Keywords: Entrepreneur; Self-identity; Distinctiveness Theory; Entrepreneurial identity

1. Executive summary

Research suggests that individuals act to fulfill a psychological need to be perceived as somehow different andunique (Brewer, 1991). This need represents a fundamental humanmotive, and is central to the psychological well-beingof all people (Snyder and Fromkin, 1980). Distinction provides the ‘self’ a sense of differentiation from others that isimportant in the creation and maintenance of one’s identity (Brewer, 1991), and is central to an individual’s emotionalwell-being (Singelis et al., 1999) and physical health (Markus and Kitayama, 1991). In this article we investigate thenotion of distinctiveness in the context of the entrepreneur.

The idea that entrepreneurs are somehow distinct and different represents a central theme in the entrepreneurshipliterature (e.g., Baker and Nelson, 2005), and to identify oneself as an entrepreneur provides individuals with theopportunity to satisfy their need for distinctiveness. That said, this research is positioned to highlight the potential

☆ The authors would like to thank Kristin Byron, Susan Coombes, Charles Murnieks, Venkat and two anonymous reviewers, the attendees of the“Entrepreneurship and Emerging Enterprises Working Paper Series” at the Whitman School of Management, Syracuse University and the workingpaper series at the Australian Graduate School of Entrepreneurship, Swinburne University for their comments on earlier versions of this article.⁎ Corresponding author. Tel.: +1 812 856 5220.E-mail addresses: [email protected] (D. Shepherd), [email protected] (J.M. Haynie).

1 Tel.: +1 315 443 3392.

0883-9026/$ - see front matter. Published by Elsevier Inc.doi:10.1016/j.jbusvent.2007.10.005

mailto:[email protected]

mailto:[email protected]

http://dx.doi.org/10.1016/j.jbusvent.2007.10.005

317D. Shepherd, J.M. Haynie / Journal of Business Venturing 24 (2009) 316–337

negative consequences of identity distinctiveness, suggesting that while creating and growing a business, for example,may satisfy the psychological need to be distinctive, it may do so at the expense of another basic psychological need, theneed to feel belonging (Tajfel and Turner, 1986; Turner, 1985).

Generally conceptualized as a competing psychological construct to distinctiveness (Brewer, 1991), belonging resultsin feelings of inclusion; a lack of belonging can result in feelings of isolation (Brewer, 1991), which can also negativelyimpact physical and psychological health (Leonardelli and Brewer, 2001). We suggest that while an entrepreneurial rolemay satisfy individuals’ needs for distinctiveness, it often does so at the expense of belonging, and, ultimately,psychological well-being.We represent this unsatisfied need for belonging– and its negative consequences– as a potential‘dark-side’ of entrepreneurship.

We employ Optimal Distinctiveness Theory as a lens through which to investigate how and when entrepreneurs aremost vulnerable to the dark-side, and the actions that they can take to mitigate these vulnerabilities. We propose aframework appropriate for managing multiple, micro-identities (Ashforth et al., 2000; Pratt and Foreman, 2000) in aneffort to detail the strategies entrepreneurs may employ to facilitate an ‘optimal’ balance between realizing the need tobelong, and the need to be distinct, in the context of identity management. Our model makes contributions to theentrepreneurship and identity literatures, and also has applications for both the teaching and practice of entrepreneurship.

For example, the entrepreneurship literature has focused almost exclusively on the rewards from entrepreneurialaction. We acknowledge these benefits, but also offer a possible psychological ‘dark-side’ of entrepreneurship – anunsatisfied need to belong – as a counterweight. We present a framework to offer insight into strategies thatentrepreneurs can use to manage boundaries and realize synergies between multiple identities in order to optimizefeelings of distinctiveness and belonging, and thus promote psychological well-being. We also explore the assumptionimplied in the extant entrepreneurship literature that, in an entrepreneurial context, the entrepreneur needs to be distinctbecause the venture requires distinctiveness given a competitive market environment and the identities of theentrepreneur and his or her venture are intertwined. Specifically, we investigate the extent to which the entrepreneur’sidentity can be separated from the venture in such a way that he or she can realize high distinctiveness while engaged inthe role of entrepreneur, and at the same time satisfy needs to belong.

In our treatment of entrepreneurship, this article represents a departure from convention. Our focus here is to betterunderstand how and under what conditions entrepreneurship may be destructive and dysfunctional for the entrepreneurin the hope that as scholars move to examine the entrepreneur in entrepreneurship the ongoing conversationacknowledges and embraces the fact that there are potential psychological downsides to entrepreneurship and that,through management, these downsides can be minimized or eliminated.

2. Introduction

‘If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him
step to the music which he hears, however measured or far away.’ — Henry David Thoreau
Research suggests that individuals act to fulfill a psychological need to be perceived as somehow different andunique (Brewer, 1991). This need represents a fundamental human motive, and is central to the psychological well-being of all people (Snyder and Fromkin, 1980). Distinction provides the ‘self’ a sense of differentiation from othersthat is important in the creation and maintenance of one's identity (Brewer, 1991), and is central to an individual'semotional well-being (Singelis et al., 1999), and physical health (Markus and Kitayama, 1991). In this article weinvestigate the notion of distinctiveness in the context of the entrepreneur.

The idea that entrepreneurs are somehow distinct as individuals represents a central theme in the entrepreneurshipliterature (e.g., Baker and Nelson, 2005), and to identify as an entrepreneur provides individuals with the opportunity tosatisfy the need for identity distinctiveness. That said, this research is positioned to highlight the potential negativeconsequences of identity distinctiveness, suggesting that while creating and growing a business, for example, maysatisfy the psychological need to be distinctive, it may do so at the expense of another basic psychological need, theneed to belong (Tajfel and Turner, 1986).

Generally conceptualized as a competing psychological construct to distinctiveness (Brewer, 1991), belonging resultsin feelings of inclusion. A lack of belonging can result in feelings of isolation (Brewer, 1991), which can in turn negativelyimpact physical and psychological health (Leonardelli and Brewer, 2001). We suggest that while an entrepreneurial rolemay satisfy individuals' needs for distinctiveness, it often does so at the expense of belonging and ultimately,

318 D. Shepherd, J.M. Haynie / Journal of Business Venturing 24 (2009) 316–337

psychological well-being.We represent this unsatisfied need for belonging– and its negative consequences– as a potential‘dark-side’ of entrepreneurship.

In this research we employ Optimal Distinctiveness Theory as a lens through which to investigate how and whenentrepreneurs are most vulnerable to this dark-side of entrepreneurship, and suggest actions that they can take tomitigatethese vulnerabilities. We propose a framework appropriate for managing multiple, micro-identities (Ashforth et al.,2000; Pratt and Foreman, 2000), in an effort to detail the strategies entrepreneurs may employ to facilitate an ‘optimal’balance between realizing the need to belong, and the need to be distinct, in the context of identity management. Ourmodel makes contributions to the entrepreneurship and identity literatures, and also has applications for both theteaching and practice of entrepreneurship. For example, the entrepreneurship literature has focused almost exclusivelyon the rewards from entrepreneurial action. We acknowledge these benefits, but also offer a possible psychological‘dark-side’ of entrepreneurship – an unsatisfied need to belong – as a counterweight. We present a framework to offerinsight into strategies that entrepreneurs can use to manage boundaries and realize synergies between multiple identitiesin order to optimize feelings of distinctiveness and belonging, and thus promote psychological well-being. We alsoexplore the assumption implied in the extant entrepreneurship literature that, in an entrepreneurial context, theentrepreneur needs to be distinct because 1) the venture requires distinctiveness given a competitive marketenvironment, and 2) the identities of the entrepreneur and his or her venture are intertwined. Specifically, we investigatethe extent to which the entrepreneur's identity can be separated from the venture in such a way that he or she can realizehigh distinctiveness while engaged in the role of entrepreneur, and at the same time satisfy needs to belong.

In our treatment of entrepreneurship, this article represents a departure from convention. Our focus here is to betterunderstand how and under what conditions entrepreneurship may be destructive and dysfunctional for the entrepreneur,in the hope that as scholars move to investigate the role of the entrepreneur in the entrepreneurial process, the ongoingconversation acknowledges and embraces the fact that there are potential psychological downsides to entrepreneurshipand that, through management, these downsides can be minimized or eliminated.

In a seminal work focused on the need ‘to be distinct’ as fundamental to the development of an individual's self-identity, Snyder and Fromkin (1980) challenged the often used proverb – and the prevailing literature of the time – that‘birds of a feather always flock together’. On the contrary, the authors asserted that the need to be perceived assomehow different and unique was central to the psychological well-being of all humans (Snyder and Fromkin, 1980).In the two decades since Snyder and Fromkin's then controversial proposition, research has demonstrated thatdistinctiveness is central to an individual's emotional well-being (Singelis et al., 1999; Watson et al., 1991; c.f.Vandervoort, 1996) and physical health (Markus and Kitayama, 1991; c.f. Triandis et al., 1988). That entrepreneurs aresomehow distinct and different is a central theme in the entrepreneurship literature (e.g., Baker and Nelson, 2005;Busenitz, 1999; Yli-Renko et al., 2001). Indeed, the literature focused on entrepreneurship as a career choice highlightsthat one of the reasons individuals become entrepreneurs is to establish a unique identity — to be somehowdistinguished in their community, industry, or society (Oyserman et al., 2002; Teal and Carroll, 1999).

That said, while creating and growing a business satisfies the psychological need to be distinctive, it may do so at theexpense of another basic psychological need, the need to feel belonging (Tajfel and Turner, 1986; Turner, 1985;Ashforth and Mael, 1989). Generally conceptualized as a competing psychological construct to distinctiveness(Brewer, 1991, 1993), belonging results in feelings of inclusion; a lack of belonging can result in feelings of isolation(Brewer, 1991), negatively impacting physical and psychological health (Leonardelli and Brewer, 2001). We suggestthat while an entrepreneurial role may satisfy individuals' needs for distinctiveness, it often does not satisfy the need forbelonging and ultimately may diminish psychological well-being. We represent this unsatisfied need for belonging –and its negative consequences – as a potential ‘dark-side’ of entrepreneurship. Entrepreneurs who are unable to“balance” distinctiveness with belonging are likely to experience this dark-side and its resultant ill effects (see Kets deVries, 1985). For example, consider that:

“When Daniel C chose to abandon his 20-year career as a corporate executive and acquire a small structuralsteel company, he assumed that his prime concerns would be financing the venture and marketing his wares.Certainly these have been challenges, but they paled beside the unexpected demon that surfaced in his new lifeand for which he was totally unprepared. Its name, for a want of a better, is loneliness. Daniel reflects: ‘I'd neverthought about loneliness before because I'd never met it. In corporate life, there was always someone to shareideas with — my boss or another colleague. They knew what I was saying because they had been there. … Nowit seems I have no one. Sure, there is an association of structural steel people, but they are my competition. I

2 Weexampldistinct


learned early on that pricing talk is resolutely avoided at association meetings, but even if we don't talk aboutprices, there are tensions between us simply because we're competitors.’ … To his surprise, Daniel realized thathis new role aggravated the headaches and the ulcer that were his usual signs of stress. Daniel's feelings andexperience are common among small-company owners [based on a survey of 450 small-business CEOs](Gumpert and Boyd, 1984: 18).”

In this article we employ Optimal Distinctiveness Theory (ODT) as a lens to investigate how and when entrepreneursare most vulnerable to the ‘demon’ described in the passage above. Specifically, we integrate ODT (Brewer, 1991, 1993)within a framework for managing multiple, micro-identities (Ashforth et al., 2000; Pratt and Foreman, 2000) to detail thestrategies entrepreneurs may employ to maintain an ‘optimal’ balance between the need to belong, and the need to bedistinct. Therefore, the general proposition that motivates this research is that entrepreneurs manage multiple micro-identities in such a way as to mitigate the trade-off between distinctiveness and belonging; those who are unable orineffective at managing this trade-off likely face the dark-side of entrepreneurship in the form of diminished psychologicalwell-being (c.f. Brewer, 1991). Our model makes contributions to the entrepreneurship and identity literatures.

First, the entrepreneurship literature has focused almost exclusively on the rewards from entrepreneurial action. Weacknowledge these benefits, but also offer a possible psychological ‘dark-side’ of entrepreneurship – the unsatisfied need tobelong – as a counterweight. We present a framework to offer insight into strategies that entrepreneurs can use to manageboundaries and realize synergies between multiple identities in order to optimize feelings of distinctiveness and belonging,and thus promote psychological well-being. Further, we explore an assumption implied in the extant entrepreneurshipliterature that, in an entrepreneurial context, the entrepreneur needs to be distinct because the venture requires distinctivenessgiven a competitive market environment, and also because the identities of the entrepreneur and his or her venture areintertwined. In this paper we explore the extent to which the entrepreneur's identity can be separated from the venture insuch away that he or she can realize high distinctiveness as an entrepreneur, and at the same time satisfy needs for belonging.

Second, within the identity literature the level of analysis for Optimal Distinctiveness Theory is the identity, and thetheory suggests that there is a trade-off between providing a sense of belonging and of distinctiveness (Leonardelli andBrewer, 2001). By focusing on the individual as the level of analysis in this research, we build upon the notion thatindividuals typically possess multiple, micro-identities (Mead, 1934; Thoits, 1983) to highlight different approaches tomaximizing feelings of distinctiveness and belonging. These micro-identities are derived from the number roles (i.e.work, family, sports teams, church, etc.) that the individual incorporates into the construction of their holistic identity.Our approach provides for the possibility that distinctiveness and belonging are not necessarily direct trade-offs, butmay co-exist in a synergistic relationship. To this end we build on arguments for a hierarchy of nested identities (Prattand Foreman, 2000; Foreman and Whetten, 2002; Turner et al., 1994), to extend the notion of a ‘super-ordinate’identity positioned to explain the impact of different, identity management approaches. A super-ordinate identityencapsulates, and thus holistically represents, an individual's multiple, micro-identities.

Third, there is a substantial body of work on individuals who derive their identity from organizations (Kreiner andAshforth, 2004; see Pratt, 1998 for a review) fostering a sense of belonging at work (Ashforth, 2001; Barker andTomkins, 1994). Scholars have also noted a so-called “darker side” of over-identification with an organization andlosing a sense of individual identity (Elsbach, 1999; Michel and Jehn, 2003). We investigate entrepreneurs where thelink between the individuals' and their organizations' entrepreneurial identities is intimately intertwined, and is morelikely to foster a strong sense of distinctiveness (Oyserman et al., 2002; Teal and Carroll, 1999) than belonging at work,and explain why some individuals can maintain psychological well-being while possessing a highly distinctive identity.Finally, we complement recent typologies of managing multiple identities (Ashforth et al., 2000; Pratt and Foreman,2000) by focusing on specific identity outcomes (for Optimal Distinctiveness Theory) where distinctive entrepreneurialidentities need to be “balanced” by other micro-identities offering a sense of belonging.2 In this article we offer acontingent explanation for the effectiveness of different strategies for managing multiple micro-identities.

In the next section we introduce the concept of distinctiveness, and detail its importance in the maintenance ofpsychological well-being. We then highlight the role of entrepreneur as an activity that provides opportunities to satisfy

stop at the level of the micro-identity although we acknowledge that a micro-identity itself may be “made up” of micro-identities. Fore, an entrepreneurial micro-identity may represent the super-ordinate entrepreneurial identity of a micro-identity that promotesiveness to external constituents and a micro-identity associated with team spirit within the entrepreneurial firm.


this need, and detail Optimal Distinctiveness Theory's trade-off between distinctiveness and belonging. We thenpropose a framework to model how and why some individuals are unable to manage this trade-off and face a dark-sideof entrepreneurship, while others are able to achieve an optimal level of distinctiveness and belonging to maximizepsychological well-being.

3. Entrepreneurial roles and imbalances in identity needs

3.1. Distinctiveness

People have a psychological need to feel distinctive and somehow unique (Brewer and Pickett, 1999; Hornsey andJetten, 2004; Cantor et al., 2002; Snyder and Fromkin, 1980). This distinction provides the ‘self’ a sense ofdifferentiation from others that is important in the creation and maintenance of one's identity (Brewer, 1991; Snyderand Fromkin, 1980).3 Empirical tests of both social identity theory (Tajfel and Turner, 1979a,b) and self-categorizationtheory (Oakes, Haslam and Turner, 1994) suggest that differentiating oneself (or one's group) from others provides thebasis for the development of a distinct identity (Oyserman et al., 2002; Teal and Carroll, 1999). Further, it is a perceivedlack of distinctiveness that motivates individuals to engage in behaviors directed toward differentiating themselvesfrom relevant comparison groups (Tajfel and Turner, 1979a,b), which in turn serves to define one's identity moreclearly (Turner et al., 1987). For example, Vignoles et al. (2000) highlighted studies that illustrate the importance ofdistinctiveness at the identity level, noting that: (1) information is better memorized if it distinguishes the self fromothers (Leyens et al., 1997); (2) groups are often rated as more heterogeneous if the rater is a group member (Brewer,1993; Park and Rothbart, 1982); (3) feelings of extreme similarity to others are associated with negative affect(Fromkin, 1970), (4) there is greater identification with distinctive groups (Brewer and Pickett, 1999), and (5) peoplegenerally describe themselves as less similar to others than others are to themselves (Codol, 1984a,b, 1987a,b).

Although the quest for distinctiveness has been associated with the motivation for enhanced self-esteem (Abramsand Hogg, 1988; Breakwell, 1986; Wills, 1991), there is both theory (Brewer, 1991) and empirical evidence (Brewer etal., 1993; Vignoles et al., 2000) to suggest that the need for distinctiveness is a “universal human motive” (Brewer andPickett, 1999) that provides a basis for comparative appraisal or self-definition of one's identity (Brewer, 1991: 478),and that it is independent of the self-esteem principle (Brewer, 1991). Therefore, we posit that distinctiveness serves afundamental role in establishing a meaningful sense of identity, and, in turn, a subjective concept of one's self as aperson (Vignoles et al., 2000).

3.2. Belonging

Although individuals seek distinctiveness, there is another need that theory suggests is positioned as a trade-off to theneed to be distinct — that is, the need to belong (Baumeister and Leary, 1995; Brewer, 1991). Baumeister and Leary(1995: 1) described the need to belong as a “powerful, fundamental, and extremely pervasive motivation”. Indeed muchof the research on social identity has focused on the benefits of inclusiveness— being amember of a perceived in-group,which satisfies a need to belong and is reflected by strong desire to form and maintain enduring interpersonalattachments (Baumeister and Leary, 1995). Although the benefits gained from inclusion in a group have been offeredfrom a number of perspectives (realistic group conflict theory (Levine and Campbell, 1972; Sherif et al., 1961) andevolutionary theories about the function of in-groups (Caporael, 1997; Neuberg and Cottrell, 2002), the most influentialhave been social identity theory (Tajfel and Turner, 1979a,b, 1986) and self-categorization theory (Oakes et al., 1994).

Social identity theory (Tajfel and Turner, 1979a,b, 1986) suggests that individuals are motivated to interpret the groupwith which they are a member in the most favorable light as a means to enhance their own sense of self-worth.Additionally, research has demonstrated that the more an individual identifies with an out-group (distinct from themainstream), the more that individual degrades their perception of the mainstream group (Gramzow and Gaertner,2005). There is considerable evidence that people go to quite extreme efforts to use group membership in this way. Forexample, many psychologists have interpreted the 1999 tragedy at Columbine High School – where two dis-enfranchised, outcast students opened fire on their classmates – as a powerful, albeit extreme, example of the

3 Although the quest for distinctiveness in the identity process can occur at the individual and group level, our focus is at the individual level.


psychological outcomes from feelings of not belonging, isolation, and rejection (Verlinden et al., 2002). Consistent withsocial identity theory, self-categorization theory proposes that the pervasiveness of one's social identity is dependant onsocial comparisons. Specifically, empirical tests of self-categorization theory suggest that the salience of a social identityis based on the particular social comparisons that are available in any given social situation (Oakes et al., 1994).

In the end, there is considerable evidence that individuals have a need to belong, and they act in a way to satisfy thatneed. Indeed, it appears that a sense of belongingness is a powerful human drive (Baumeister and Leary, 1995; for areview; see also Fiske, 2003).4 That is, people experience positive affect from increases in belongingness (McAdamsand Bryant, 1987; McAdams, 1985) and negative affect from decreased feelings of belongingness (Leary, 1990;Tambor and Leary, 1993). The negative affect resulting from an unsatisfied need for belonging has been linked toanxiety (Baumeister and Tice, 1990; Tambor and Leary, 1993) and loneliness (Russell et al., 1984; Spivey, 1990); bothof which have been linked to negative physical and psychological well-being (DeLongis et al., 1988; Lynch, 1979).

The literature selectively reviewed in the preceding sections serves to highlight a potential trade-off in satisfyingpsychological needs when considered in the context of one's self-identity. On one hand, theory and research suggeststhat maintaining distinctiveness is fundamental to the development of one's self-identity. On the other hand, the need tobelong and identify strongly with societal groups is a fundamental human motive. Distinctiveness is believed to comeat the expense of belonging and vice versa (Brewer, 1991: 478) — a belief that we will later challenge.

3.3. Optimal Distinctiveness Theory

Optimal Distinctiveness Theory proposes that individuals will seek out associations with groups that allow them tomaintain an ‘optimal’ balance between the need to be included, and the need to be distinct (Brewer, 1991, 1993).Empirical evidence suggests an inverted U-shaped relationship between distinctiveness and its benefits (Brewer andPickett, 1999; Brewer and Weber, 1994) and that this inverted U-shaped relationship can be explained by the tensionbetween the need for “differentiation of the self from others” and a need for “inclusion of the self into larger socialcollectives” which are understood to act in opposition to each other (Brewer, 1993: 3; Vignoles et al., 2000: 339).Optimal Distinctiveness Theory is consistent with the theories of uniqueness advanced by Snyder and Fromkin (1980).Snyder and Fromkin proposed that the most acceptable level of distinctiveness is at moderate levels; both very highdistinctiveness and very low distinctiveness were the least acceptable. As developed by Brewer (1991), OptimalDistinctiveness Theory has been “restricted to the discussion of distinctiveness at the level of the group membership…”however “Brewer and Gardner (1996) extended the same logic to individual and interpersonal levels of self-representation, suggesting that the opposing needs for differentiation and assimilation are played out at the individuallevel in terms of uniqueness and similarity” (Vignoles et al., 2000: 340).

3.4. Entrepreneurs and identity distinctiveness

A role as entrepreneur provides individuals with the opportunity to satisfy their need for distinctiveness in a mannerconsistent with the theory and empirical evidence described above. Being an entrepreneur provides individuals theautonomy (e.g. Akande, 1994; Boyd and Gumpert, 1983; Kuratko and Hodgetts, 1995) to have greater control over thedevelopment of the venture and, more generally, their lives (Kolvereid, 1996; Longenecker et al., 1988). Entrepreneurscan position their firms relative to other firms (and perhaps other entrepreneurs) to maximize distinctiveness (Zahra,2003; Lumpkin and Dess, 1996; Naman and Slevin, 1993; Guth and Ginsberg, 1990; Khandwalla, 1987; Miller, 1983;Schollhammer, 1982) and erect barriers to imitation to maintain that distinctiveness (Yip, 1982). While a traditionalstrategy lens would attribute such actions to competitive maneuvering and market positioning, theories of social identitywould suggest that these actions also serve the purpose of distinguishing the entrepreneur from some ‘out-group’. Suchdistinction enhances the entrepreneurs concept of self as being unique and different (Oyserman et al., 2002).

Further, the “freedom” inherent in being an entrepreneur allows an individual to have extraordinary control andinput – when compared to more ‘traditional’ vocations – in the formulation of their self-identity. That is, the

4 Baumeister and Leary (1995; 498) propose that the need to belong is a fundamental human motivation in that it (a) produces effects under all butadverse conditions, (b) has affective consequences, (c) directs cognitive processing, (d) leads to ill effects (such as health or adjustment) whenthwarted, (e) elicits goal-orientated behavior designed to satisfy it, (f) is universal in that it applies to all people, (g) is not derivative of othermotives, (h) affects a broad variety of behaviors, and (i) has implications that go beyond immediate psychological functioning.


distinctiveness inherent in the entrepreneurial process, when combined with the variety of actions and behaviorsconferred upon the individual to realize entrepreneurial ends (creation, new venture formation, exploitation), providesthese individuals a breadth of opportunities to differentiate themselves from others. Interviews with founders of newventures revealed that some “viewed the enterprise in terms of personal growth or fulfillment”…for these individuals,“life would not have been complete without proving one had the ability to successfully start a business” (Bruno et al.,1992: 297). Cova and Svanfeldt (1993) proposed that some entrepreneurs “…create a product that flows from their owninternal desires and needs. They create primarily to express subjective conceptions of beauty, emotion, or someaesthetic ideal” (297). In sum, we suggest that entrepreneurs have considerable opportunity to pursue differentiationactivities consistent with the need to satisfy their desire for a distinct concept of self.

There has been considerable scholarly interest in what makes entrepreneurs different from others. Entrepreneurshipeducators focus on teaching students to ‘think outside the box’, or to ‘color outside the lines’ because each of these acts isperceived as somehow related to success in an entrepreneurial environment. Researchers focus on ‘what is different aboutentrepreneurs’ in terms of personality (Korunka et al., 2003), cognition (Busenitz and Barney, 1997), creativity (Ames andRunko, 2005), motivation (Naffziger et al., 1994), and knowledge (Shane, 2000). In light of our focus on difference asfundamental to entrepreneurship (and serving as a foundation for how entrepreneurs satisfy the psychological need to bedistinct) it is important to concomitantly consider the evidence that by distinguishing themselves as entrepreneurs may notbe satisfying their needs to belong. Further, that the unsatisfied need to belong may result in dysfunctional outcomes asrelated to psychological well-being. For example, specific evidence suggests that entrepreneurs put personal and familyrelationships at risk (Kim et al., 1994; Redding, 1993; Ufuk and Ozgen, 2001), as well as experience feelings of isolation(Hannafey, 2003), loneliness (Akande, 1994; Gumpert and Boyd, 1984) and high levels of chronic stress (Akande, 1994;Boyd and Gumpert, 1983; Harris et al., 1999; Yusuf, 1995). Such feelings have been found to lead to elevated healthproblems (Buttner, 1992; Ufuk and Ozgen, 2001), psychological problems (Jamal and Badawi, 1995; Naughton, 1987;Eden, 1975), andwork dissatisfaction (Buttner, 1992; c.f. Naughton, 1987). For example,Gumpert andBoyd (1984) foundthat 52% of 210 small-business owner managers said they “frequently feel a sense of loneliness” and that this group alsoreported greater levels of stress. These feelings of loneliness were attributed to the distinctive role of entrepreneur. Forexample, small-business owner managers reported that they had no confidant with who they could share their deepconcerns (68% of respondents), that the extreme time demands of entrepreneurship isolated them from others, and that“there's this distance you have to maintain as [owner] manager” (Gumpert and Boyd, 1984).

We highlight these empirical findings above and the anecdotal evidence as representative of a potential ‘dark-side’ ofentrepreneurship. However, there is likely variability in the extent to which an entrepreneur experiences this downside.Some new organizations are created by a founding team (Eisenhardt and Schoonhoven, 1990; Ucbasaran et al., 2003).The founding team comes together to make collective decisions to achieve collective goals for the venture (West, 2007)and develop a team spirit (Lechler, 2001). It appears that the founding team (and other organizational members) can helpsatisfy and entrepreneur's need for belonging and minimize the abovementioned dark-side of entrepreneurship.

However, even within founding teams there is often a formal structure where one person becomes the “leadentrepreneur” (Clarysse andMoray, 2004; Ensley et al., 2000).Without some form of formalization with specific roles andresponsibilities and someone in charge, venture performance will suffer (Sine andMitsuhashi, 2006; Stinchcombe, 1965).Increasing formalization serves to structurally distinguish the lead entrepreneur from the rest of the founding team.Additionally, conflict between teammembers can develop (Stinchcombe, 1965). For example, Boyd and Gumpert (1983)found thatmore than two-thirds of founders startingwith partners eventually dissolved teas. Although the lead entrepreneurmay become distinct from the rest of the founding team, the team likely satisfies part of his or her need to belong:

Proposition 1. Entrepreneurs who maintain a single identity aligned with their ventures satisfy the need for highdistinctiveness and those who are part of a founding team satisfy the need for belonging more than those who are solofounders.

In the next section we introduce a framework to decompose the relationship between distinctiveness and belongingin the context of managing the boundaries that separate the micro-identities of entrepreneurs.

4. Optimal distinctiveness, psychological well-being, and entrepreneurs

Generally, the extant literature conceptualizes someone as experiencing high psychological well-being when his orher life is “congruent or meshing with deeply held values that are holistically or fully engaged” (Ryan and Deci, 2001:

Fig. 1. Optimal distinctiveness for an entrepreneuring individuals identity.


146). Optimal Distinctiveness Theory suggests that moderate levels of distinctiveness are associated with highpsychological well-being. This relationship is depicted in Fig. 1, where the Y-axis represents psychological well-beingand the X-axis represents level of distinctiveness. The curve is representative of the individual's psychological well-being at differing levels of distinctiveness. At low levels of distinctiveness (far left), a particular identity provides littledistinctiveness, and subsequently the individual's psychological well-being is low. Psychological well-being increaseswith increases in distinctiveness until an ‘optimal’ point, after which further increases in distinctiveness (moving rightalong the X-axis) result in a decrease in psychological well-being (because of lower levels of belonging). The top of theinverted-U curve represents the ‘optimal’ point for a given individual— the point where distinctiveness and belongingare in balance, and psychological well-being is maximized.

For entrepreneurship scholars the question becomes: Can entrepreneurs ‘reshape’ their psychological well-beingcurve to diminish the trade-off between distinctiveness and belonging (and perhaps capitalize on synergies), and indoing so mitigate the dark-side implications of the entrepreneurial role? To address this question we integrate thepremise of ‘balance’ drawn from Optimal Distinctiveness Theory, with the literature that suggests that individualsmaintain and manage multiple, micro-identities (Ashforth et al., 2000; Pratt and Foreman, 2000), to propose aframework for understanding how entrepreneurs can maintain an optimal balance of distinctiveness and belonging,while pursuing the highly distinctive role identity associated with being an entrepreneur. Specifically we suggest thatby maintaining and managing multiple, micro-identities, an entrepreneur develops what we describe as a super-ordinate identity curve. The super-ordinate identity holistically represents an entrepreneur's multiple micro-identities;some likely to confer distinctiveness, others likely to confer belonging — thus mitigating the theoretical trade-offbetween distinctiveness and belonging. This relationship is depicted in Fig. 2a.

The micro-identities of entrepreneurs are defined (in both quantity and character) by the extent to whichentrepreneurs maintain multiple role identities (Greenhaus and Powell, 2006). In effect, the number of micro-identitiesmaintained by a given individual is a function of the number of role identities that individuals incorporate into theconstruction of their holistic self-identity (the super-ordinate identity curve). Although we acknowledge that anentrepreneurial identity itself is likely the culmination of a number of micro-identities, this additional level of complexityis not necessary to develop our model.

Identities are defined by the central and peripheral characteristics representative of a given role (Ashforth et al., 2000:475). For example, one may define his or her identity of ‘entrepreneur’ as consisting of a set of central (innovator, riskbearer, action oriented [Covin and Slevin, 1991; Wiklund, 1999]), and peripheral (organizer, facilitator, communicator)characteristics, which taken together define this person's ‘entrepreneurial’ identity.5 That same individual may alsoconceptualize his or her role identity as ‘parent’ as consisting of a set of central (provider, protector, role-model), andperipheral (taxi for the kids, repair person, etc.) characteristics, which taken together define the role identity ofparenthood or as a sporting ‘teammate’ consisting of its central (“play maker” or “point scorer”), and peripheral (tactical

5 We do not offer a single definition of an ‘entrepreneurial’ identity because while there are likely common characteristics across people we alsoexpect variance and it is an individual's notion of his or her ‘entrepreneurial’ identity that impacts psychological well-being.

Fig. 2. a. Micro-identities and the ‘super-ordinate” identity. b. Compartmentalization of micro-identities. c. Integration of micro-identities.


advisor or friend) characteristics. Each micro-identity can be represented by its own distinctiveness — psychologicalwell-being curve, where the top of the inverted-U curve represents the ‘optimal’ balance of distinctiveness andbelonging for this specific micro-identity. The optimal level of distinctiveness – in the context of the individual enactingan entrepreneurial identity – is different from the optimal level of distinctiveness while enacting other micro-identitiesand, as we will show later, different from an entrepreneur's super-ordinate identity curve (if they have more than onemicro-identity). For example, the need for distinctiveness is likely satisfied more by an individual's entrepreneurialidentity than by his or her identity as parent or sportsperson.


These micro-identities are separated by a boundary. Identity boundaries are defined as the “physical, temporal,emotional, cognitive, and/or relational limits that define entities [identities] as separate from one another” (Ashforthet al., 2000: 474). An example of an identity boundary may be, for example, defined by a building (physical boundary);the notion here is that once the individual enters his/her place of work, that individual assumes the identity defined byhis/her vocation. Identity boundaries may also be much less tangible (than a building) and more cognitive in nature; forexample consider an entrepreneur who receives a telephone call from a supplier while in the car. Although theentrepreneur may be on the way to the lake for the weekend, the business call dictates an identity ‘transition’ defined bythe micro-identity boundary of ‘entrepreneur’. While the attributes that define identity boundaries are developed inmore detail later, we suggest here that:

Proposition 2. Entrepreneurs who maintain a single identity aligned with their ventures will have lowerpsychological well-being than entrepreneurs who also maintain micro-identities that confer belonging.

It is important to acknowledge that we assume entrepreneurs vary in terms of the number of micro-identities theyoccupy, and that these micro-identities are relatively stable over time. We also assume that entrepreneurs weigh theimportance of different micro-identities – as they contribute to formulating a holistic self-identity – in an idiosyncraticway in terms of satisfying the needs of distinctiveness and belonging. For example, an entrepreneur may maintainseveral micro-identities positioned to confer belonging – family, sports teams, social clubs, church – but may only seekto satisfy belonging through one (or a few) of those micro-identities (e.g., identity as family member often represents aprimary source of belonging) (Oswald and Suter, 2004; Stewart, 2003).

In the section that follows we suggest that the entrepreneur's selection of identity management strategies will impactthe extent to which multiple, micro-identities serve as conduits for both feelings of distinctiveness and of belonging(and thus enhanced psychological well-being). The effectiveness of an identity management strategy depends on thenature of the boundaries and synergies that exist between the micro-identities. However the challenges of identitymanagement strategies – such that psychological well-being is maximized – lies in managing the transition; crossingfrom one identity to another such that the individual can “psychologically (and where relevant, physically) exit one roleand enter another (Ashforth et al., 2000: 477; Stephens, 1984)”. The notion of transitioning across identity boundariescan be represented as a psychological, transaction cost function (see Ortona and Scacciati, 1992) such that the greaterthe costs of psychologically exiting one identity to enter another, the greater the cost to psychological well-being. Wenow move to describe two micro-identity management strategies – compartmentalization and integration – and offerpropositions as they relate to understanding the implications of the distinct ‘entrepreneurial’ identity on an individual'spsychological well-being.

4.1. Micro-identity management strategies: compartmentalization and integration

Compartmentalization is representative of a strategy by which entrepreneurs preserve an identity that confersdistinctiveness (entrepreneurial identity) and an identity that confers belonging, and the entrepreneur chooses toemploy the different micro-identities at different times and in different contexts (Breakwell, 1986). Compartmentaliza-tion strategies dictate that entrepreneurs infrequently oscillate between one micro-identity and other micro-identities asa mechanism for managing boundaries, and specifically the costs of boundary transitions. For example, an entrepreneurmay also be a parent, thereby possessing a ‘parenting’ identity that confers feelings of belonging (Oswald and Suter,2004). Given a compartmentalization strategy for managing micro-identities, the entrepreneur separates entrepreneurfrom non-work roles by enacting one identity and then the other through a process of infrequent transitions. Doing soallows the entrepreneur to internalize the ‘entrepreneurial’ micro-identity while at work, and when outside work“switch” to other identities such as parent, buddy, sportsperson, card shark, etc. Another example of managing multipleidentities using compartmentalization may be an entrepreneur who switches micro-identities twice a day by neverdoing work at home, and conversely never addressing family-related matters while at work.

Compartmentalization does not change the shape of the entrepreneurial identity curve, but instead adds an additionalcurve representative of the non-work micro-identity; in our example, two curves representing two identities (refer toFig. 2b). The entrepreneurial identity curve is positioned to the far right, and confers distinctiveness while theindividual is engaged in entrepreneurial activities, and a non-work curve is positioned to the left conferring belongingwhile the individual is engaged in these non-work-related activities. Compartmentalization of multiple, micro-identitiesfacilitates the development of a super-ordinate identity that maximizes an individual's psychological well-being by


satisfying both the need to be distinctive (through his or her entrepreneurial identity) and to belong (through, forexample, his or her parent identity, team identity, or neighborhood identity).

However for many entrepreneurs, identity management strategies based on minimizing identity conflict throughcompartmentalization may be a difficult task. There is a substantial body of literature focused on identity conflict, and inparticular work–family conflict (Allen et al., 1983; Greenhaus and Beutell, 1985; Lobel, 1991). This research suggeststhat attempts to keep identities separate through the use of compartmentalization strategies may fail (Lobel, 1991). Forexample, Greenhaus and Beutell (1985) identified three theoretical types of work–family, inter-role conflict: 1) time-based conflict, defined as the amount of time required from both the entrepreneurial and parent identity is excessive orconflicting (the entrepreneur is required to be in two places at one time); 2) strain-based conflict, defined as theindividual's strain (e.g., illnesses, fatigue or tension) brought on by the pressures of one role making it more difficult toperform the other adequately; and 3) behavior-based conflict, defined as the behavior required in one identity is differentfrom the behavior required with another identity. For example the strain caused by the uncertainty of entrepreneurialtasks make it difficult to effectively immerse in the “parent” identity, and the behavior-based inter-role conflict amongfamily members in family businesses is due to the differences between family and business cultures (e.g., Dyer, 1986).While compartmentalization defines one end of the continuum representative of identity management strategies, at theopposite end is integration.

Integration is representative of a strategy by which entrepreneurs can manage multiple micro-identities, and thusmitigate the trade-off between distinctiveness and belonging by bringing together the identity that confers dis-tinctiveness (i.e. entrepreneurial identity) and an identity that confers belonging (e.g., family, sports club, church), sothat both identities can be employed simultaneously (or approaching simultaneously) through frequent transitions.Integration is a strategy representative of an attempt to fuse together identities into “a single, all purpose mentality, oneway of being, one amorphous self” (Nippert-Eng, 1996: 568). The most simplistic depiction of an integrated identitycould be a family business. In this case, the roles defined by different micro-identities – so prominent in a compart-mentalized strategy – are essentially fused given an integration strategy. Integration attempts to overcome the competingdemands of managing multiple micro-identities by occupying multiple identities simultaneously or by rapidly tran-sitioning between them. In Fig. 2c we illustrate integration where two distinct identities are replaced by a single identity.

As with compartmentalization, it may be difficult for entrepreneurs to employ integration strategies for managingmultiple identities. Given efforts to reduce separation between micro-identities, the result may be unpredictableinterruptions to one micro-identity from the other. Although these interactions can be a source of optimizing the trade-off between distinctiveness and belonging, they can also be distracting. These distractions can come without warning(Hall, 1990) and disrupt an entrepreneur's immersion in to a particular identity. For example, a phone call from a friendcan disrupt immersion into an entrepreneurial identity and a phone call from a client can disrupt immersion into a socialgathering of friends such that the entrepreneur may face diminished psychological well-being from feelings that neitherhis or her needs of distinction or belonging are being sufficiently met as well as confusion and anxiety about whichidentity is or should be most salient (Ashforth et al., 2000). Such interruptions are less likely for compartmentalizationwhere entrepreneurs maintain the identities separately.

Given the conceptualizations of both compartmentalization and integration offered above, it is important toacknowledge that we do not suggest that the extreme forms of either strategy are necessarily common or appropriate,but only posit that these strategies represent anchors on a continuum where individuals position themselves as morecompartmentalized or more integrated in the management of multiple micro-identities. Further, given the costs andbenefits associated with compartmentalization and integration, we assume entrepreneurs vary in their preferences foridentity management strategies focused on satisfying their needs for both distinctiveness and belonging. We alsoassume that entrepreneurs have some latitude over the extent to which distinctiveness and/or belonging is pursued.Generally, we assume that engaging an entrepreneurial identity is more likely to satisfy the need to be distinctive, whileengaging other ‘collective’ identities is more likely to satisfy the need for belonging. Some entrepreneurs will prefergreater compartmentalization (i.e. value the benefits of compartmentalization over integration, or may be betterequipped to deal with the challenges of compartmentalization), while others may prefer greater integration for the samereasons. Generally, it is our position that regardless of entrepreneurs' preferences toward a given management strategy(compartmentalization or integration) they generally seek to: a) satisfy needs for distinctiveness and belonging, b)minimize the difficulties of identity transition where difficulties are defined as ‘the effort required to becomepsychologically and physically disengaged from one identity and re-engaged in another identity (adapted from Burr,1972; Ashforth et al., 2000: 473), and c) minimize the frequency and magnitude of identity conflict.


To extend the notion of compartmentalization and integration to entrepreneurs as they seek to balancedistinctiveness and belonging, in the next section we investigate in greater detail how the nature and character ofidentity boundaries and identity synergies impact the extent to which compartmentalization and integration strategiesmay be appropriate for balancing the needs for distinctiveness and belonging in entrepreneurs. In doing so, we developour arguments based on the notion that identity boundaries and potential synergies are strategic constraints (consistentwith the social constructed nature of identities [Ashforth et al., 2000]). From this perspective, identity is not solelydetermined by, and within the control of, the focal individual but he or she “takes” the role characteristics that others“offer” (Katz and Kahn, 1966). However, the propositions below are not dependent upon this assumption and allow forthe possibility that, for example, the nature of identity boundaries can be strengthened or weakened by entrepreneurs.That is, identities can be the result of a negotiation process (Goffman, 1959; Swann, 1987) where not only does thesocial reality shape individuals (Turner, 1984) but also individuals shape social reality (Buber, 1951; McNulty andSwann, 1994). For example, individuals bring others to see them as they see themselves through techniques such asimpression management and in their choice of partners (Swann, 2005).

4.2. Identity synergies, identity boundaries, and management strategy

In the previous section we developed a continuum of identity management strategies by detailing the strategies thatanchor that continuum— compartmentalization at one extreme, and integration at the other. Given this framework, therelevant question becomes why would (or should) an entrepreneur select a more compartmentalized strategy over amore integrated one (or vice versa) as the more appropriate means through which to optimize distinctiveness andbelonging and thus maximize psychological well-being? We propose that the effectiveness of an identity managementstrategy (the frequency of transitioning between micro-identities) to maximize psychological well-being depends onthe concomitant consideration of the extent to which synergies exist between competing micro-identities (the potentialbenefits arising from transitioning between identities), and the nature of the boundaries that exist between theseidentities (the difficulties or costs of transitioning between identities). This model is developed below and illustrated inFig. 3.

Identity synergy, as conceptualized by Foreman and Pratt (2000), describes the level of relatedness betweenidentities; the more convergent the identities, the greater the potential that each identity has to enhance the performanceof the other. Foreman and Pratt provide the example of an individual with strong religious beliefs (and thus a strongmicro-identity related to his/her role in the church) working for a religious organization serving to “align one's religiousand work-related identities (Foreman and Pratt, 2000: 23)”. To again carry forward the family business scenario, anexample of a synergy may be a family business where one's micro-identity of ‘family’ (and thus a central feature of thatidentity as being ‘provider’) aligns with running the family business to put food on the table. Identity synergy ismanifest when one identity enhances the outcomes of another identity — the family identity enhances the

Fig. 3. Managing entrepreneurs multiple micro-identities to maximize psychological well-being.

Fig. 4. Synergy and micro-identities.


entrepreneurial identity's ability to satisfy needs for distinctiveness and/or the entrepreneurial identity enhances thefamily identity's to satisfy needs for belonging. Moving beyond a family business example, consider the case of PhilKnight – the founder of Nike – as an example of an identity synergy in an entrepreneurial context. Knight's identity asa member of the University of Oregon track team in the early 1960s, and his strong desire to maintain an identity as amember of the running community when he graduated from the University, drove him to design, develop, and market arevolutionary running shoe. Thus it was Knight's entrepreneurial identity that not only conferred and satisfied the needfor distinctiveness, this identity also served to further Knight's identification with the community of runners,maintaining an identity that served to satisfy needs for belonging; each identity enhancing the performance of the other.

Our conceptualization of the role that synergies serve in the context of competing micro-identities is analogous tohow organizational theorists characterize the relationship between individuals, groups, and performance. Findingsfrom this area of research consistently demonstrate that when synergies are present between group members (seeHackman, 1987), the performance of the group will exceed the sum of the individual performances of each groupmember (Watson et al., 1991). In the same vein, we suggest that, at the level of the micro-identity, synergies betweenidentities provide the opportunity to both “broaden” and “raise” the super-ordinate identity curve. When synergiesbetween micro-identities exist, the benefits conferred upon the entrepreneur's holistic identity from enacting theseidentities exceed the sum of the benefits from enacting each identity alone. In this case, the ‘benefits’we describe are anenhanced psychological well-being as a result of satisfying the need for both distinctiveness and belonging. This notionis represented in Fig. 4.

Turning to the boundaries that define micro-identities, we characterize them as being either strong or weak. Strongboundaries are defined as those that are inflexible and impermeable and those that are weak as flexible and permeable.Boundary flexibility refers to the extent that identities are tied to distinct contexts, settings, or times. Inflexibleboundaries are rigid, and serve to define a given micro-identity based on identity specific attributes such as work hours,location, relationships, and even physiological characteristics. For example, an inflexible boundary would be onewhere the entrepreneurial identity is tied to being in the office from 7 a.m. to 6 p.m. Another example may be theentrepreneur who commutes from the suburbs to the city every day, where the entrepreneurial identity is tied to being intown. At the other extreme, a flexible boundary is one where the transitions between competing micro-identities are ill-defined and subtle. In the case of flexible boundaries, competing micro-identities are blurred. Boundary permeabilityrefers to the vulnerability of the boundary to interruptions and distractions that require a transition from one identity toanother. A highly impermeable boundary is one that permits for few incursions into a given identity from the roles andactivities of a different identity. On the contrary, a permeable boundary is one vulnerable to such intrusions.

Bringing together both synergies (low to high) and boundaries (weak to strong), in the context ofcompartmentalization and integration strategies, serves to define a framework of discrete conditions through whichwe can investigate a given strategy in the context of an entrepreneur seeking to maximize psychological well-being byoptimizing identity distinctiveness and belonging. Simply for illustration purposes we dichotomize the continuousvariables of the model (see Fig. 5).

Fig. 5. Management strategy, boundaries, and synergy.


4.2.1. Compartmentalization of micro-identitiesA compartmentalization strategy is most effective when boundaries are strong. Strong boundaries assist entrepreneurs

in keeping their entrepreneurial and non-work identities apart. That is, interruptions fromone identity to the other (and viceversa) are minimized. Infrequent transitions from one identity to the other provide the opportunity to “balance”distinctiveness and belonging. For example, transitioning from family to entrepreneurial identity at the start of the daysatisfies an entrepreneur's need for distinctiveness and transitioning from one's entrepreneurial identity to one's identity asa soccer player (or dance partner) at the end of the day satisfies his or her need to belong. However, the compart-mentalization strategy of keeping identities separate with transitions deliberately infrequentmakes it difficult to realize anypotential synergies. For synergies to be fully realized there needs to be integration of the two entities (Allred et al., 2005;Schweiger and Goulet, 2005); realizing potential synergies depends on the extent of interaction and coordination betweenthe identities (Larrson and Finkelstein, 1999). Thus,

Proposition 3. Entrepreneurs who pursue a compartmentalization strategy for managing multiple micro-identitiesincrease psychological well-being when identity boundaries are strong, but decrease psychological well-being whenidentity boundaries are weak.

4.2.2. Integration of micro-identitiesAn integration strategy is representative of a strategy through which entrepreneurs attempt to mitigate the trade-off

between distinctiveness and belonging by bringing together the identity that confers distinctiveness (i.e. entrepreneurialidentity) and an identity that confers belonging, so that both identities can be employed simultaneously or approachingsimultaneity through frequent transitions. The benefits of such a strategy are to realize potential synergies betweenidentities. But for this strategy to capitalize on potential synergies, the boundaries between identities need to be weak;for example, a blurring of the separation of “market” and “home” that occurs in many businesses where the family andthe business are inextricably intertwined (Fournier and Lightfoot, 1997; Hamilton, 2006). Weak boundaries reduce thedifficulties or psychological costs of the transitioning between identities necessary to take advantage of synergies. Incontrast, stronger boundaries means that the gulf between the identities is broader requiring more “work” to bridge thegulf, increasing the psychological costs of frequent transitioning between identities. Stronger boundaries are likely toobstruct or diminish potential synergistic benefits. It is for this reason that we suggest that inflexible and impermeableboundaries make it more difficult – if not impossible – for an integration strategy to realize the benefits of potentialsynergies between a distinctive entrepreneurial identity and other identities satisfying needs to belong. But even with


flexible and permeable boundaries, without the potential of synergies then the entrepreneur faces the costs of weakboundaries – such as sources of identity conflict from blurred boundaries such that the roles and responsibilities of oneidentity (entrepreneurial identity) spillover into another identity and vice versa (Williams and Alliger, 1994) – withoutthe synergistic upside.

Consider the integration of entrepreneurial and parent identities at a single table that simultaneously represents (orwith frequent oscillation between) a kitchen table (parent identity) and a boardroom table (entrepreneurial identity).These weak boundaries enhance the effectiveness of an integration strategy to manage entrepreneurial and familymember identities to balance distinctiveness with belonging to maximize psychological well-being. In spite ofFriedman's (1991) previously cited contention that family business interests are rarely congruous, it is possible that forsome entrepreneurs, their non-entrepreneurial identities such as one's family identity can enhance their entrepreneurialrole. For example, Stewart (2003: 387) emphasized the importance of kinship arising from family in enhancingentrepreneurial action — “relatives provide a diffuse, long term source of social support that underwrites the capacityof entrepreneurs to take short term risks (Benedict, 1968; Goody, 1996; Greenhalgh, 1989; Mattessich and Hill, 1976)”.Perhaps the sense of belonging from a family identity enhances the entrepreneurial role by encouraging a moredistinctive entrepreneurial identity. There are also some examples of potential synergies where the entrepreneurial rolehelps provide a sense of belonging — working in a family business may strengthen a marriage (Wicker and Burley,1991).

Therefore, synergies offer the opportunity to raise the psychological well-being curve higher than the simpleadditive effects of the two micro-identities (see Fig. 4), but in order for this to occur there must exist an opportunity forsynergy, a permeable boundary between micro-identities, and the use of an integration strategy. Alternateconfigurations involving only integration are unable to achieve the same fit and therefore do not provide the samebenefits to psychological well-being. Although compartmentalization can represent an appropriate “fit” when theboundaries are less permeable and there are few if any potential synergies, this “best” compartmentalizationconfiguration enhances psychological well-being less than the “best” integration configuration because the later hasaccess to, and capitalizes on, potential synergies. Thus,

Proposition 4. When the synergy between identities is high, entrepreneurs who pursue an integration strategy formanaging multiple micro-identities increase psychological well-being more the weaker the identity boundaries.

Proposition 5. Entrepreneurs with greater integration of identities when synergies are high and boundaries weakhave higher psychological well-being than any other combination of strategy, boundary strength and level of synergy.

5. Discussion

The entrepreneurship literature has focused almost exclusively on the extrinsic (Zahra et al., 1999) and intrinsic(Kuratko et al., 1997) benefits arising from entrepreneurship. One exception is Kets de Vries' (1985: 160) article on thedark-side of entrepreneurship. In this article we acknowledged that the same creative energies that drive anentrepreneur have its source in destructive internal needs that can ruin a career or company. In our model weacknowledge that the benefits of being an entrepreneur in satisfying needs for distinctiveness may come at the expenseof satisfying needs to belong and if these needs are not “balanced” then entrepreneurs are susceptible to experiencingthe dark-side. If scholars are to examine the entrepreneur in entrepreneurship, then there is an opportunity to addressresearch questions that do not have improving organizational performance as an underlying motivation for the study.Although an entrepreneur's psychological well-being may have a positive relationship with firm performance (arelationship to be empirically tested), we believe psychological well-being is a valuable dependent variable in its ownright. An individual's entrepreneurial behavior can extend across a number of organizations (Greenhaus and Powell,2006); so a focus on the people side of entrepreneurship that is tied to specific organizations is likely to unnecessarilyconstrain our research. We have an opportunity to move beyond the health of the organization to the health of theindividuals that create and grow these organizations. By acknowledging a dark-side of entrepreneurship we were ableto explore strategies that help individuals obtain the benefits and minimize the costs of entrepreneurial action.

In our model we acknowledged conventional wisdom that an entrepreneur's identity is intimately intertwined withhis or her venture (Cardon et al., 2005). However, in moving from the identity as the level of analysis to theentrepreneur as the level of analysis provides the opportunity to explore the role that multiple micro-identities have inbalancing a distinctive, entrepreneurial identity with one or more identities that satisfy needs for belongingness.


Acknowledging different strategies for managing multiple micro-identities and the conditions where they are mosteffective, we are able to offer an explanation for why some entrepreneurs maximize the psychological benefits of anentrepreneurial identity while others do not.

Our notion of strategies for managing multiple identities makes a contribution to Optimal Distinctiveness Theory(Brewer, 1991). Rather than maximizing psychological well-being by maintaining an identity that optimizesdistinctiveness and belonging, individuals can “change the equation” by introducing and managing multiple micro-identities to “create” a super-ordinate identity that maintains a higher psychological well-being for a greater range ofdistinctiveness. Applying Optimal Distinctiveness Theory at the level of the entrepreneurial identity may provide anunsatisfactory explanation of entrepreneurs' psychological well-being, because some individuals with highlydistinctive entrepreneurial identities are able to satisfy needs for belonging through other micro-identities, while otherindividuals might have less distinctive entrepreneurial identities but do not maintain other identities and face a dark-side of diminished psychological well-being.

Our optimal distinctiveness approach to managing the multiple micro-identities of entrepreneurs complementsorganizational research on multiple identities. First, research on individuals' identification with organizations hasfocused on employees and fostering a sense of belonging (Ashforth, 2001; Barker and Tomkins, 1994). We focused onentrepreneurs where their work-related identity (entrepreneurial identity) is likely to satisfy needs to be distinctive,potentially at the expense of belonging (Gumpert and Boyd, 1984). Investigating entrepreneurs provides an interestingcounterbalance to organizational research on the identities of employees and opens up new avenues for future researchon over-identification. Second, Optimal Distinctiveness Theory's emphasis on distinctiveness and belonging incontributing to psychological well-being provides an important focus for investigating the specific contributions ofdifferent micro-identities and strategies to manage them. We position this research, in part, as a response to Pratt andForeman's suggestion that a further elaboration is needed on the ‘specific mechanisms’ through which multipleidentities are managed (Pratt and Foreman, 2000). Specifically, we addressed strategies for managing multiple micro-identities (compartmentalization and integration as anchors on a continuum of the frequency of transitioning betweenidentities) and how the relationship between strategy and balancing the needs of distinctiveness and belonging weremoderated by identity synergies (the potential benefits from transitioning between identities) and the strength ofboundaries (the difficulties in transitioning between identities).

5.1. Future research

We suggest that for scholars interested in pursuing empirical investigations of the relationships proposed in thisarticle, one of the most promising aspects of such inquiry is that it does not necessarily require the development of newmeasures or research designs. Generally, the testing of social identity theories is based on psychometric instruments,and correlation analysis. Specifically in the case of Optimal Distinctiveness Theory, both experimental (Pickett andBrewer, 2001) and survey-based (Van Hiel and Mervielde, 2004) designs have been employed to investigate the trade-off between distinctiveness, belonging, and psychological well-being and have been found to be valid. For example,there are several generalized and contextually-specific measures of psychological well-being (see Ryff, 1989 for areview) including the Life Satisfaction Index (Neugarten et al., 1961) and the Affect Balance Scale (Bradburn, 1969).Further, instruments designed to capture both belonging (Identification with a Psychological Group [Mael and Tetrick,1992]) and distinctiveness (Need for Uniqueness Scale [Snyder and Fromkin, 1980]) are readily accessible toresearchers. A more challenging proposition than how to measure the relative affect of the entrepreneur (detailedabove) lies in operationalizing the 1) identity management strategy employed by the entrepreneur (morecompartmentalization vs. more integration), 2) the strength of the micro-identity boundaries, and 3) the synergiesthat exist between micro-identities.

As a first step toward decomposing the identity management strategy ‘in-use’ by the entrepreneur, as well asassessing the strength of the boundaries between identities, researchers interested in empirical investigation may employexperience sampling (ESM) methodologies (Csikszentmihalyi and Larson, 1987; Hormuth, 1986), where entrepreneursrecord their daily activities, and thus the researcher can employ a classification schema designed to identify the relevantmicro-identity management strategies employed. Such research can build on the solid foundation of existing ESMdesigns (Stone, 1982). Turning to synergies, the investigation of our general proposition that synergies between micro-identities serve to enhance the contribution of individual, micro-identities in terms of distinctiveness, belonging, andthus psychological well-being has methodological precedents in the literature. For example, scholars have long


investigated the notion of synergy in the context of the ‘individual-team’ dynamic using experimental designs. Forexample, Distefano and Maznevski, 2000 employed cross-cultural awareness training – as a manipulation – to promotesynergies given multi-cultural teams, and subsequently examined the performance of culturally synergistic teams incomparison to a control group. In this case, synergy was operationalized using training as a proxy. Watson et al. (1991)considered synergy as a function of team experience in a longitudinal study where they considered the relativecontribution of the team's highest performer as compared to the team as a whole, highlighting that as synergies weredeveloped (through experience working as a team), the relative contribution of the top performer was reduced incomparison to the performance of the team as a whole.

Adapting optimal distinctiveness from the level of the identity to the level of the individual (super-ordinate identity)highlights the possibilities of future research at other levels of analysis and perhaps across levels. The organizationallevel is already well established in terms of multiple organizational identities (Foreman and Pratt, 2000; Foreman andWhetten, 2002; Turner et al., 1994) and strategies for managing these identities (Pratt and Foreman, 2000). Doorganizations have a need to be distinctive? Do they have a need to belong? Strategy research has been based on thefirst premise— organizations need to be distinctive (Barney, 1991; Porter, 1980) and maintain this unique position forreasons of competitive advantage (Yip, 1982). But industry associations, for example, provide an indication thatorganizations also ‘need to belong’. However, if you create a new industry or destroy an established industry, to whichindustry association should the firm belong?

Finally, we assume that entrepreneurial identities are high on distinctiveness and begin with a set of micro-identitiesto investigate how they can be managed. There is likely heterogeneity across different forms of entrepreneurial actionin the extent to which they are distinctive and the extent to which the satisfy needs for belongingness. Relative to moreradical entrepreneurial actions, do less distinctive entrepreneurial actions— such as becoming a franchisee: (a) provideless satisfaction of the need to be distinctive, and/or (b) represent a context in which the entrepreneur is less likely toexperience the dark-side of an unsatisfied need for belonging? We have suggested that entrepreneurs who were part of afounding team are less likely to experience this dark-side than those who were sole founders. There are likely othervariables for explaining the location of the micro-identity curves and such research will make an important contributionto entrepreneurship. An additional research opportunity is to investigate existing micro-identities and how they mightinfluence which additional roles are added. For example, perhaps individuals that have a non-work identity thatprovides considerable satisfaction of the need for belonging are able, or desire to, pursue entrepreneurial micro-identities that are more highly distinctive than those individuals who have less of their needs for belonging satisfied.Does one's micro-identity “make-up” impact which additional micro-identities are added and how they are managed?These research questions that “push” the boundary conditions of this article's model represents a promising line ofresearch.

5.2. Practical implications

The primary implication of our model is that given an assessment of the permeability of one's micro-identityboundaries and potential synergies, entrepreneurs can chose a more compartmentalized or more integrated identitymanagement strategy to achieve the best “fit” and in doing so minimize the dark-side of an unsatisfied need forbelonging to maximize psychological well-being. To enact an integration identity strategy (following Dumas, 2003: 33;Nippert-Eng, 1995, 1996; Perlow, 1998), entrepreneurs may 1) talk about one role while in another (e.g., talk aboutone's entrepreneurial activities while at a softball game with friends or talk about community activities while at work),2) perform activities from one role while physically located in another role (e.g., making phone calls to raise money forthe local church while at the office or answering emails from customers on the Blackberry during a round of golf withfriends), and 3) allow role-set members associated with the entrepreneurial role to interact with role-set members fromother roles (e.g., invite family members to the company's holiday party or invite employees to one's 50th birthday partyat home). These activities encourage integration. For a compartmentalization strategy (following Dumas, 2003: 33;Nippert-Eng, 1995, 1996; Perlow, 1998), the entrepreneur would avoid the integration activities detailed above: 1) nottalk about the activities of the entrepreneurial role while in another role and vice versa, 2) restrict physical artifacts totheir domains of origin (e.g., keep photos of the family at home, trophies at the sorts club, computers and fax machinesat the office), 3) delineate specific times and places where one would be in his or her entrepreneurial role and times andplaces for other roles (e.g., from 8am–6pm, Monday to Saturday one is in the office and during this time and in thisplace the individual engages exclusively his or her entrepreneurial role; other times and places engages other roles), and


4) keeps separate the entrepreneurial role-set members and role-set members from other roles (e.g., employees,customers, suppliers do not mix with family, recreational friends, and/or fellow church members). These activities helpenact a compartmentalization identity strategy.

5.3. Conclusion

In this article, we investigated the role that micro-identities have in satisfying the psychological needs of distinctivenessand belonging.We position the role of entrepreneur as generating a possible ‘dark-side’ for individuals, suggesting that anentrepreneurial role may satisfy individuals' needs for distinctiveness; it often does so at the expense of belongingness,and, ultimately, psychological well-being. By integrating social-identity and role identity literatures with OptimalDistinctiveness Theory, we propose a framework positioned to decompose strategies for managing multiple micro-identities, such that the distinctiveness inherent in an entrepreneur's identity does not come at a cost to belonging, and inturn psychological health. In our treatment of entrepreneurship, this article represents a departure from convention. Ourfocus here is to better understand how and under what conditions entrepreneurship is destructive and dysfunctional for theentrepreneur. Reflecting upon this research, it is our hope that as scholars move to “re-examine the people-side ofentrepreneurship (Mitchell et al., 2002:93)”, the ongoing conversation acknowledges and embraces the fact that there arepotential psychological downsides to entrepreneurship and that, through management, these downsides can be minimizedor eliminated. More theoretical and empirical work is required to appropriately detail and develop the ‘identity’implications of entrepreneurship. It is our hope that this article represents a first step toward that end.

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Birds of a feather don't always flock together: Identity management in entrepreneurship