Interpretation of successful and failed events at entrepreneurial firms: Acknowledgement practice under uncertainty

Event interpretation and acknowledgement drive behaviour and identity formation in organisations. Extant studies exploring this link have focused on large, stable organisations. We extend these studies to entrepreneurial contexts where individual behaviour and organisational identity are especially fluid. We analyse narratives of success and failure in entrepreneurial firms to identify and explore acknowledgement practice, which is the ad-hoc action (or inaction) of organisational actors and groups responding to observed events. We explore how uncertainty affects event interpretation and acknowledgement. Within entrepreneurial contexts, we show that event interpretation and acknowledgement biases influence responses to success and failure. The combination of these biases reveals four broad emergent organisational characteristics, which have important implications for organisational identity.