Theory of Hierarchical Entrepreneurial Deviance

A Recursive Multilevel Account of Entrepreneurial Departure and Amplification

Abstract

Entrepreneurship research offers established explanations of action under uncertainty, entrepreneurial cognition and identity, network mobilization, venture enactment, market emergence, and institutional change. These literatures, however, remain divided across levels of analysis and do not provide an integrated explanation of how an entrepreneurial departure originating in individual judgment may become amplified into broader change. This article develops the Theory of Hierarchical Entrepreneurial Deviance (THED), a reference-dependent, recursive multilevel theory of entrepreneurial departure. THED defines deviance neutrally as a material departure from the expectations, beliefs, routines, categories, or arrangements of a specified reference group or system. It distinguishes two foundational elements—agentic action and uncertainty-bearing judgment—from seven loci of entrepreneurial deviance: interpretive, identity, relational, enactive, market, structural, and systemic transformational. The theory specifies mechanisms through which departures may be translated and amplified across individual, relational, venture, market, field, and system levels, including identity internalization, stakeholder enrollment, collective enactment, artifact creation, market adoption, diffusion, institutionalization, and recursive reinforcement. The hierarchy represents expanding scope and potential consequence rather than a deterministic stage sequence or ranking of entrepreneurs. Trajectories may overlap, stall, reverse, normalize, or de amplify as learning, selection, resistance, and changing reference states reshape the process. THED further predicts that realized departures become less frequent at broader loci, while successful amplification produces increasingly extensive and persistent consequences. At its rare upper bound, Caruso-level deviance joins exceptional catalytic entrepreneurial conduct with distributed systemic transformation. The framework contributes a testable architecture for explaining where entrepreneurial departures reside, how they travel across levels, and why only a small proportion become structurally or systemically consequential.