Abstract

Powell and Baker (2014) bridged identity theory and social identity theory to show how and why the structure founders’ identities shapes how their firms responded strategically to prolonged adversity. In this paper, we extend the theory of founder identity structures to explain how and why they shape firms’ later patterns of recovery. Most theoretically intriguing to us is that having made it through years of adversity, some founders stopped believing they could counter the challenge, became disillusioned and abandoned their commitment to being who they wanted to be just as they saw that things were starting to get better.

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