Narratives of Business Failure and Resilience: a Sensemaking Approach to Entrepreneurial Recovery and Sustainability in a Developing Country Context

Purpose The study pursues three objectives: to examine how entrepreneurs narrate and interpret failure within socio-cultural contexts, to analyse how sensemaking processes repair identity and restore legitimacy and to explain how these processes are translated into sustainability-oriented strategies across economic, social and environmental dimensions. Design/methodology/approach Using a 25 qualitative interpretive approach, narrative interviews were conducted with entrepreneurs in Nigeria who had experienced business failure and recovery. Findings The findings reveal that entrepreneurial recovery is a continuous, narrative-driven sensemaking process rather than a linear behavioural adjustment. Entrepreneurs interpret failure through socio-cultural frames, reconstruct identities and restore legitimacy through narrative practices. Narrative is identified as the central mechanism linking emotional repair and strategic rationality, enabling entrepreneurs to reframe failure, regain social acceptance and re-enter markets. Sustainability-oriented strategies emerge as downstream outcomes of legitimacy reconstruction, instead of pre-planned intentions, encompassing economic, social, and environmental dimensions. Originality/value this study advances entrepreneurship and sensemaking theory by conceptualising narrative as a form of institutional work that actively repairs social legitimacy in fragile environments. It introduces a process model showing how entrepreneurs integrate emotional repair and strategic rationality through narrative sensemaking, thereby transforming failure into sustainability-oriented outcomes. By linking identity reconstruction, legitimacy restoration and strategic reorientation, the study provides a novel explanation of entrepreneurial recovery as a narrative-driven, socially embedded process.