Extending Institutional Theory’s Analysis of Entrepreneurs’ Strategies in New Organizational Populations via a Mash-up with Benedict Anderson’s book, Imagined Communities

As an experiment in seeing whether ChatGPT4o could build on a classic book in political and social history by Benedict Anderson, Imagined Communities: Reflections on the Origin and Spread of Nationalism (1983), I posed the following question to it: “it seems to me that Benedict Anderson’s thesis could be extended to help people studying entrepreneurship understand how a business/industry could emerge, such as a social media platform, that could be socially constructed to appeal to people as something that is naturally national or even global in scope. Could you respond to my conjecture?

Photo of letters and words falling out of a book
Communities can emerge when people’s imaginations are captured by words and symbols

Here is how ChatGPT4o responded (I have edited its response for greater clarity):

“Your speculation is well-grounded, and extending Benedict Anderson’s thesis to entrepreneurship, particularly to the emergence of businesses like social media platforms, is a productive line of thought. Anderson’s concept of “imagined communities” — wherein a nation is socially constructed and sustained through shared symbols, narratives, and media — could indeed offer a valuable lens for understanding how businesses, especially in the digital age, are socially constructed to appear naturally national or even global in scope.

In Anderson’s framework, a nation is imagined not because its members have direct contact, but because shared media, language, and cultural symbols allow them to feel connected. A similar process occurs with platforms like Facebook, Twitter, or Instagram, which enable users to “imagine” themselves as part of a vast community, even though the users may never meet the majority of those who participate on the platform. These platforms rely on the two same mechanisms Anderson described: a shared media space, common symbols (logos, interfaces, cultural references) and a constructed sense of temporality (news feeds, updates, viral content) that synchronize the experiences of millions of users. This creates the illusion of a coherent, unified community on a global scale.

In this context, a social media platform can be seen as constructing a new kind of imagined community that is either national or global in scope, depending on how it markets itself, the languages it supports, and the cultural cues it emphasizes. For example, Facebook, though born out of an American context, deliberately marketed itself as a global platform, using a universal, neutral interface and positioning itself as a space where anyone, anywhere, could connect with others. This deliberate construction taps into users’ desires for connectivity and shared identity, much as a nation might.

Moreover, social media platforms, like nations in Anderson’s view, depend on the shared imagination of users to sustain their community. Users participate in creating the sense that the platform is a “global village,” a phrase often invoked to describe the Internet, but which mirrors Anderson’s idea that media constructs shared experiences across vast distances. Just as a nation requires its citizens to buy into the imagined idea of the nation, a social media platform requires users to buy into the idea that the platform is not only a tool but also a “space”  — a community where they belong, interact, and express themselves. This is evident in how brands like Twitter or TikTok have been able to cultivate specific national and global user bases by tailoring content, features, and cultural references to appeal to particular collective identities.

From an entrepreneurial perspective, this insight is useful. It suggests that businesses, particularly digital platforms, can strategically construct a narrative and shared experience to appeal to large, dispersed audiences. Just as nationalism was spread through print capitalism in Anderson’s analysis, digital capitalism uses algorithms, network effects, and media to foster global or national communities that feel organic but are the result of careful construction. Entrepreneurs can leverage this understanding by creating products or platforms that, through shared cultural symbols and narratives, create the appearance of a “natural” community that resonates with users’ pre-existing identities — whether national or global.

In summary, Anderson’s thesis offers a powerful way to think about the social construction of businesses and platforms as national or global phenomena. It underscores the importance of media, shared symbols, and collective imagination in building the legitimacy and appeal of modern entrepreneurial ventures, especially those rooted in digital connectivity. Your extension of Anderson’s ideas to entrepreneurship opens a fascinating avenue for exploring how businesses can be engineered to feel as if they transcend local boundaries, connecting individuals to a broader imagined community.”

I then asked ChatGPT4o to use my paper with Marlena Fiol, “Fools Rush in? The Institutional Context of Industry Creation,” AMR, 1994, to expand its argument by considering what Fiol and I said about the strategic importance of new industries pursuing institutional legitimacy.

Here is ChatGPT4o’s response (again edited by me to achieve greater clarity):

“Your article with Marlena Fiol, “Fools Rush In? The Institutional Context of Industry Creation,” offers a framework for understanding how new industries are shaped by their institutional environments, which can complement and deepen the extension of Anderson’s thesis to entrepreneurship, particularly in the context of social media platforms or similar ventures.

Aldrich & Fiol (1994) argued that industry creation is not just the result of individual entrepreneurial actions but instead is deeply embedded in an institutional context that provides legitimacy, norms, and cognitive frameworks. Entrepreneurs and early entrants in an industry don’t simply respond to market opportunities; they actively participate in shaping the institutional structures that define the new industry. This resonates with Anderson’s concept of imagined communities, in that social entrepreneurs (like the founders of Facebook or Twitter) are not just creating a product or service—they are actively constructing the symbolic and cognitive frameworks that allow users to imagine the platform as a national or global community.

Drawing on Aldrich & Fiol’s arguments about the institutional context of industry creation, we can refine the extension of Anderson’s thesis as follows:

1. Entrepreneurs as Institutional Architects: Just as nations are imagined through cultural symbols and shared media, entrepreneurs, particularly in new industries like social media, are actively constructing the “imagined community” of their users. They don’t just offer a tool for communication — they create a shared language, norms, and symbols that users adopt. For instance, Facebook developed its own vocabulary around “friends,” “likes,” and “news feeds,” which quickly became part of the broader cultural lexicon. This aligns with Aldrich & Fiol’s idea that early entrants shape institutional contexts by offering not just services but cognitive frameworks that guide how people think about and use the product.

2. Legitimacy Through Institutional Context: In “Fools Rush In?” Aldrich and Fiol argued that industries gain legitimacy through institutional structures, which help define what is seen as appropriate or legitimate behavior within that industry. In the case of social media platforms, legitimacy is created through cultural and symbolic work, much like how Anderson’s nations are legitimated through shared myths, media, and symbols. The creation of a national or global platform isn’t just a matter of technology — it requires the platform to be seen as a legitimate site for interaction on a global scale. Facebook’s early narrative, for example, framed it as a platform for global connection, building peace, and community creation, drawing on institutionalized ideals of globalism and connectivity.

3. The Role of Institutional Actors: In both Aldrich & Fiol and Anderson, institutional actors play a significant role in constructing and maintaining communities. For social media platforms, these institutional actors might include governments, regulatory bodies, and media corporations that help define the boundaries of the “imagined” national or global community. Just as Anderson describes the role of the state and media in constructing national identity, Aldrich & Fiol’s framework highlights how different actors within an institutional environment (such as tech regulators, privacy advocates, or digital content creators) contribute to shaping the contours of the digital platforms’ legitimacy. Entrepreneurs in this space must navigate and engage these actors to build a community that feels organic and global.

4. Emergent Narratives of Globalization: Aldrich & Fiol emphasizes how industries emerge within a broader social and institutional context, often characterized by competing narratives. This parallels the way Anderson describes the rise of nationalism as the result of various actors and technologies shaping a new narrative. Similarly, social media platforms emerge within globalizing institutional contexts, where entrepreneurs leverage narratives of cosmopolitanism, borderlessness, and global connectivity. In doing so, they construct their platforms as “natural” hubs for global interaction. For example, LinkedIn didn’t just create a job network—it helped institutionalize the idea of a global professional community, appealing to the increasingly globalized nature of the labor market.

Incorporating these insights, Anderson’s thesis on imagined communities can be enriched by recognizing the role of institutional frameworks, as detailed in Aldrich & Fiol. Entrepreneurs don’t simply build communities by chance; they actively participate in shaping the norms, narratives, and structures that allow a platform to be imagined as a global or national entity. The symbolic work of constructing legitimacy, defining norms, and navigating institutional actors is critical to how platforms like Facebook or Twitter are not only sustained but imagined by their users as naturally national or global communities.

Thus, Aldrich & Fiol provides an institutional lens that complements Anderson’s focus on media and symbols, suggesting that entrepreneurial success in creating national or global platforms depends not only on the technological or symbolic framing but also on navigating and shaping the institutional context in which the platform is situated. This integration offers a powerful framework for understanding the co-construction of business and community in the digital age.”

I invite your comments & suggestions.

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