Karki_et_al-2020-Journal_of_Business_Ethics.pdf (752.57 kB)
To formalize or not to formalize: women entrepreneurs’ sensemaking of business registration in the context of Nepal
journal contribution
posted on 2023-06-07, 07:05 authored by Shova Thapa KarkiShova Thapa Karki, Mirela Xheneti, Adrian MaddenDespite the depiction of decisions to formalize informal firms as rational and ethical, many entrepreneurs in developing countries continue to operate informally regardless of its perceived illicit status. While existing research on why entrepreneurs choose informality emphasizes the economic costs and benefits of such decisions, this often overlooks the realities of the informal economy and the constraints which marginal populations—particularly women—face. In this paper, we use institutional theory and sensemaking to understand the experiences of women in the informal economy and what formalization means to them. We use a qualitative approach to collect data from 90 women entrepreneurs in three different cities in Nepal. In our findings, we identify three groups of women with distinctive understandings of formalization—business sustainability, livelihood sufficiency and strategic alignment. Their interpretation of formalization reveals the complex, dynamic, and cyclical nature of formalization decisions. Decisions are also guided by the optimization of social and emotional logics, whereby formalization is conceived differently depending on different life stages, experiences within the informal economy and wider socio-cultural contexts. Our findings highlight the ethical implications of formalization where being a ‘good citizen’, rather than complying with formal rules and regulations, is about attuning to and fitting in with socially prescribed roles. Our research provides a nuanced view of formalization decisions, challenging idealized and ethical notions of formalization as a desired end state.
History
Publication status
- Published
File Version
- Published version
Journal
Journal of Business EthicsISSN
0167-4544Publisher
Springer VerlagExternal DOI
Volume
0Page range
1-22Pages
22.0Department affiliated with
- Strategy and Marketing Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2020-05-26First Open Access (FOA) Date
2020-05-26First Compliant Deposit (FCD) Date
2020-05-23Usage metrics
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