61 

 

 

 

 
HOW DO ENTREPRENEURIAL GROWTH INTENTIONS EVOLVE?  

A SENSEMAKING-SENSEGIVING PERSPECTIVE 

 

 

 

Dev K. Dutta
1
 

University of New Hampshire  

Dev.Dutta@unh.edu 

 

 

 

Stewart Thornhill 

University of Western Ontario 

sthornhill@ivey.uwo.ca 

 

 

 

ABSTRACT 

 

 

 

In this paper, we develop a process model to explain how growth intentions evolve over the 

venture’s life cycle. Adopting an inductive approach, we use case study data from 30 small 

and medium enterprises (SME) with an explicit focus on venture growth over five years. Three 

waves of data were collected from the same set of lead entrepreneurs in these firms to identify 

if and why their intentions to grow their businesses changed over the timeframe. Using 

grounded theory development, we formulate a model characterizing entrepreneurial growth 

intentions. The model incorporates a sensemaking-sensegiving perspective and is recognized 

in terms of its constituent 3Ps (Precursors, Process and Product), serving to capture the 

essential dynamic of the entrepreneurial growth intention process over time. 

 

Keywords: firm growth, entrepreneurial orientation, small business  

 

                                                 
1
 Corresponding author 

Acknowledgement: We would like to express our appreciation to the Social Sciences and 

Humanities Research Council of Canada for providing financial support (MCRI grant 

#412980025) and to the entrepreneurs who participated in this longitudinal study. 

S TRATEG Y 
 JOURNAL OF SMALL BUSINESS 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

62 

INTRODUCTION 

 

While high-growth entrepreneurial firms 

widely vary across size, sector, and age 

characteristics, they all need a high level of 

commitment from the lead entrepreneur to 

achieve growth (Gilbert, McDougall, and 

Audretsch, 2006; Smallbone, Leigh and 

North, 1995). Yet, as Gilbert et al. (2006) 

note, research by Barringer, Jones, and 

Neubaum (2005) shows only 3.5% of the 

new ventures started each year in the U.S. 

actually evolve into large firms. 

Entrepreneurs differ widely in terms of their 

attitudes towards growth (Cliff, 1998), need 

for wealth attainment (Amit, MacCrimmon, 

Zietsma and Oesch, 2001), and willingness 

to grow (Davidsson, 1989).  

 

Much of what unfolds in course of the 

history of an entrepreneurial venture is 

inextricably linked with entrepreneurial 

intention, i.e. what entrepreneurs think with 

respect to their ventures and how they act 

on these thoughts (Bird, 1988, emphasis our 

own). Intentions characterize 

entrepreneurial action and are affected by 

individual and contextual factors such as 

social, political, and economic factors, 

personal history, current personality, and 

abilities of the entrepreneur, and experience 

and satisfaction with current job (Lee, 

Wong, Foo and Leung, 2011). Intentions 

are also influenced by the entrepreneur’s 

rational analytic, as well as, intuitive 

holistic thinking frames and structures used 

to make sense of the environmental 

potential that exists with respect to creating 

and making a success of the new business 

(Palich and Bagby, 1995). Focusing our 

attention on factors that influence the 

process of evolution of entrepreneurial 

growth intentions can help to inform us why 

some ventures achieve growth while others 

do not do so. Therefore, in this paper, we 

study how entrepreneurial growth intentions 

evolve over the venture’s life cycle, by 

utilizing insights from Gioia and 

Chittipeddi’s (1991) sensemaking-

sensegiving perspective.  

 

According to Cornelissen and Clarke 

(2010), new venture creation requires the 

entrepreneur to not only develop mental 

models of the market, so as to identify and 

act on opportunities, but also situate such 

understanding in a wider social 

environment, evoking meaning in line with 

political interests that matter as far as 

realization of the entrepreneurial 

opportunity is concerned. To do so, the 

entrepreneur: (i) must construct a reality 

based on his/her beliefs about an emerging 

opportunity and (ii) be able to articulate the 

reality to other stakeholders that matter as 

far as launching and growing the venture is 

concerned (Vaghely and Julien, 2010). 

Together, these tasks involve a dynamic 

process of sensemaking-sensegiving on the 

part of the entrepreneur (Bettiol, Maria and 

Finotto, 2012). Gioia and Chittipeddi 

(1991) developed the sensemaking-

sensegiving framework to explain how 

organizations accomplish strategic change. 

The first process, sensemaking, is how the 

organizational leader searches information 

relating to the internal and external 

environments and engage in meaning-

making, in order to identify strategic 

imperatives and a plan for action. The 

second process, sensegiving, relates to how 

the leader communicates his/her 

understanding to organizational members 

and influence the latter’s meaning-making 

process. Because our study is concerned 

with change in entrepreneurial growth 

intentions over time, we adopt the 

sensemaking-sensegiving framework to 

understand how this process of change 

evolves and factors that influence the 

process. In doing so, we arrive at the 3P 

model, which suggests three sets of factors 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

63 

drive the evolution of growth intentions 

over time: Precursors, Process, and Product.   

 

GROWTH INTENTIONS AND 

ENTREPRENEURIAL 

SENSEMAKING-SENSEGIVING 

 

New venture growth is a complex process. 

It is affected by a range of factors: (i) the 

entrepreneur’s personality, motivation, 

aspirations, knowledge, and experience; (ii) 

resources available, from the entrepreneur 

as well as external sources; (iii) industry 

and geographical context the venture is 

located in; (iv) organizational structure and 

processes adopted; and (v) the venture’s 

strategy for achieving growth (Delmar, 

Davidsson and Gartner, 2003; Gilbert et al., 

2006). Entrepreneurial growth intentions 

exhibit differences, at least in terms of 

outcomes resulting from them. Not all 

entrepreneurs keep their venture on a 

continuing growth path. Some aim for a 

target growth in the business and then are 

engaged in maintaining this level of 

performance. Yet others may exit from the 

business and having done so, may or may 

not set up another new venture. Thus, the 

entrepreneurial intention to launch a 

business is usually followed by decisions 

associated with growing and stabilizing 

performance, or the decision to exit the 

business, as the entrepreneurial firm 

progresses in its life cycle.  

 

When faced with equivocal information or 

risky situations in identifying and enacting 

opportunities, entrepreneurs adopt unique 

categorization and choice processes (Palich 

and Bagby, 1995). They use simplified 

cognitive processes to form perceptions, 

even though these may cause distortions in 

viewing reality. In fact, the entrepreneur’s 

cognitive elements seem to act as enablers, 

directing the entrepreneur’s efforts in a 

specific direction (Sommer and Haug, 

2011). Thus, potential biases can occur, in 

that entrepreneurs may exhibit excessive 

optimism in situations where non-

entrepreneurs demonstrate pessimism or 

risk aversion. Cognitive processes, far from 

being completely rational, tend to overload 

the information-processing capacity of 

entrepreneurs dealing with varying 

situations, thus subjecting them to cognitive 

bias (Baron, 1998). For instance, Doern 

(2011) finds that the ways in which 

entrepreneurs perceive and interpret barriers 

have an influence on their intentions to 

grow their businesses. While these barriers 

do arise based on the entrepreneur’s 

disposition, personality characteristics, and 

prior experience, factors external to the 

entrepreneur also play a role. For instance, 

Diaz-Casero, Ferreira, Mogollon and 

Raposo (2012) have highlighted the 

influence of the entrepreneur’s institutional 

environment where the entrepreneur is 

based, which has an impact on the 

entrepreneur’s intention, specifically with 

regard to the desirability and feasibility of a 

business idea.  

 

Entrepreneurs constantly engage in 

sensemaking and sensegiving as they create 

and lead the venture through its formation, 

growth, and survival (Bettiol, Maria and 

Finotto; Hill and Levenhagen, 1995). 

Sensegiving and sensemaking are 

interpretive processes engaged in by the 

leader, in order to affect organizational 

change (Gioia and Chittipeddi, 1991). 

According to Gioia and Chittipeddi, 

“…‘sensemaking’ has to do with meaning 

construction and reconstruction by the 

involved parties… [while] ‘sensegiving’ is 

concerned with the process of attempting to 

influence the sensemaking and meaning 

construction of others toward a preferred 

redefinition of organizational reality” 

(1991: 442). Sensemaking arises when 

leaders scan the organization’s internal and 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

64 

external environment, in order to discern 

trends and signals that have the potential to 

affect the organization, and engage in 

meaning-making for themselves. 

Sensegiving is the counterpart process that 

involves the leader’s efforts to shape the 

meanings of other organizational members, 

such that the leader’s suggested vision and 

path of organizational change can be 

followed.  

 

Existence of sensemaking and sensegiving 

as processes characterizing human 

interpretation, understanding, decision 

making, and action in systems that involve 

individuals, groups, and organizations has 

been well-recognized in prior literature (e.g. 

Craig-Lees, 2001; Daft and Weick, 1984; 

Gioia and Chittipeddi, 1991; Weick, 1979; 

Weick, 1995). For the leader, sensegiving is 

triggered by issues he/she perceives as 

ambiguous, unpredictable, and spanning 

across multiple stakeholder domains 

(Maitlis and Lawrence, 2007). Yet, as the 

leader engages with and responds to these 

triggers, frequent modification of the 

leader’s opinions on these issues can give 

rise to inconsistencies between sensemaking 

and sensegiving (Bartunek, Krim, Necochea 

and Humphries, 1999). This problem can 

become especially compounded in 

entrepreneurial settings, which are 

characterized by high levels of uncertainty 

with regard to the market, product, and 

organizational survival and growth 

prospects. Therefore, for the present study, 

we adopt the twin concepts of 

entrepreneurial sensemaking-sensegiving 

and apply them in the inductive setting of a 

field study, in order to arrive at insights 

about the process guiding the changing 

nature of growth intentions as the firm 

evolves.   

 

 

 

THE PRESENT STUDY 

 

Approach to the Research 

The present study was conducted on the 

belief that entrepreneurial intention, being 

the primary force that guides the action by 

SMEs in a volatile environment, is critical 

in the overall process of entrepreneurial 

sensemaking and sensegiving.  Our pre-

supposition is that entrepreneurial intentions 

itself would emerge as part of the broader 

process of entrepreneurial interpretation and 

enactment. Growth, evolution, survival, and 

decline of the SME can be conceptualized 

as being elements of a broader process of 

organizational change affecting the firm 

encapsulated in a wider business 

environment. Prior literature has suggested 

organizational change involves a dynamic 

interplay of forces along three distinct but 

inter-related dimensions – context, content, 

and process (Pettigrew, 1987; Barnett and 

Carroll, 1995). Context is the situation 

surrounding the firm - the field of forces in 

which the firm finds itself, which creates 

conditions for the “why” of change. Content 

and process reflect the internal forces 

operative in the firm as it responds to 

change, or the “what” and “how” of change, 

respectively (Pettigrew, 1987). 

Organizations have been classified as 

interpretive systems, with interpretive 

processes within the organization shaping 

its realities (Daft and Weick, 1984). Being 

the prime driving force within the SME, the 

entrepreneur’s role in the process of 

sensemaking-sensegiving can hardly be 

overemphasized. Mental models of 

individuals allow them to perceive 

environment on a scale that goes beyond the 

range of their immediate perception (Barr, 

Stimpert and Huff, 1992; Linan, Santos and 

Fernandez, 2011). It is this change schema 

that guides an individual’s attitude toward 

change (Lau and Woodman, 1995).  

 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

65 

As research methodology, we adopted 

grounded theory development (Glaser, 

1992; Glaser and Strauss, 1967; Martin and 

Turner, 1986; Strauss and Corbin, 1998). 

Grounded theory provides a recognized 

technique of inductive theory development 

by giving the researcher ways of developing 

in-depth explanation of a phenomenon. We 

agreed with Orlikowski (1993) that the 

three characteristics of grounded theory 

development – inductive, contextual, and 

processual – are well suited to developing 

an inductive understanding of the 

phenomenon, which within itself 

incorporates content, context and process 

elements. Following the traditions of 

grounded theory research (e.g. Beyer and 

Hannah, 2002; Eisenhardt, 1989), we 

adopted only a few central a priori themes 

to inform the research design and data 

collection process, thus allowing the data to 

speak for itself. Primarily, the following 

two themes were taken to serve as 

guideposts to the study: (i) entrepreneurial 

intentions are modified by the 

entrepreneur’s sensemaking and (ii) 

entrepreneurial sensemaking is a dynamic 

process that changes character with time. 

With these core themes to guide us, we 

progressed with three waves of interview 

data collection by following up with the 

same group of entrepreneurs. 

 

Research Setting and Data Collection 

The research design incorporated a 

longitudinal, multi-site case study of thirty 

SMEs located in Western Canada. A unique 

feature of these SMEs is that just before the 

commencement of the first wave of data 

collection, they had secured subordinated 

debt for working capital from a single 

venture capitalist, which indicates an 

explicit intent to grow their ventures. Given 

their focus on venture growth, our chosen 

sample satisfied the criterion of theoretical 

sampling appropriate for grounded theory 

(Draucker, Martsolf, Ross and Rusk, 2007). 

Data was collected at periodic intervals 

(2001, 2003 and 2005) through in-depth 

interviews by the two authors. All the 

entrepreneurs have been interviewed 

repeatedly - during each cycle of data 

collection process. The interviews were 

deliberately kept unstructured except that 

the broad domain of questioning included 

the following pointers: (i) venture’s current 

profile, (ii) intention towards growth in the 

upcoming 2-3 years, (iii) involvement of 

other organizational members on 

discussions about the firm’s growth 

strategies, and (iv) constraints that could 

affect the intended growth. Every interview 

was recorded on tape and then transcribed 

verbatim. The participants were explained 

the longitudinal nature of the project as well 

as assured of complete confidentiality of the 

data collected. The interview data was 

supplemented with archival case data on 

each company. These documents described 

the company’s history, performance 

statistics, and web-based data available on 

the company’s homepage, as well as due 

diligence reports prepared by the 

investment managers from the mezzanine 

financing agency. Also, the company’s 

financial statements were made available to 

the researchers every quarter during the 

timeframe of the study. 

 

Data Analysis 

An independent professional agent (who 

was otherwise unconnected with the study) 

transcribed the interview data individually 

collected by the two authors over the study 

timeframe. Transcription of the data was 

completed within a month of each wave of 

data collection (in 2001, 2003, and 2005). 

Each interview transcript thus formed a data 

file and had a name that incorporated the 

month and year the interview was 

conducted as well as the name of the 

respondent firm.  



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

66 

Content analysis of the interview data was 

carried out by both authors, independent of 

each other. Having identified central themes 

and associated patterns from the data, the 

authors compared notes, discussing the 

similarities as well as distinctiveness 

associated with the patterns. This process of 

triangulation (Jick, 1979; Labianca, Gray 

and Brass, 2000) allowed us to narrow 

down the original set of themes into a 

reduced set containing common themes 

suggested by several entrepreneurs. In line 

with established practice in grounded theory 

development (e.g. Gioia and Chittipeddi, 

1991; Labianca et al., 2000), we engaged in 

both first-order and second-order analysis 

of the data. “The first-order analysis … tries 

to faithfully reflect the events that occurred 

… through the participants’ eyes … This is 

followed by second-order analysis … in 

which several themes and schemas are 

linked in a model of how change occurred. 

In second-order analysis, the researcher 

offers and interpretation of what transpired 

that goes beyond that offered by the 

informants in the first-order analysis” 

(Labinca, Gray and Brass, 2000: 242). 

 

First-order Findings 

Based on the study, the following first-order 

findings emerged. Entrepreneurs begin with 

an intention to launch or acquire a business. 

This is almost immediately followed by an 

intention to consolidate and grow. In terms 

of their affinity for growth, entrepreneurial 

intentions may be classified as falling along 

a continuum – from maintaining stability to 

going for unbridled growth. At a later stage, 

there may emerge an intention to diversify 

or expand the business -- in terms of 

products/services and or geographies. 

Alternatively, some entrepreneurs seem not 

to adopt the expansion/diversification route 

but exit from the business. Thus, intentions 

follow a range of growth choices: (i) 

stability (or zero growth) can be followed 

by (ii) expansion (or positive growth), (iii) 

diversification (growth with variety), (iv) 

consolidation and/or (v) exit. 

 

Having launched the business, most 

entrepreneurs focus their attention on the 

intention to stabilize operations of the new 

venture and overcome its liabilities of 

newness and adolescence (Bruderl and 

Schussler, 1990). The idea is to develop a 

sense of security in the business, test the 

waters as it were, and find out if the venture 

is going to be profitable and whether setting 

it up was the right thing to do.  

 

Thus: 

 

“I guess just almost, like, at that stage, it 

was just about establishing the viability of 

it. Like, on a really basic level, ‘could this 

happen?’ like ‘could this work?’ And so, 

the funny part is though that my original 

business plan has in large part turned out to 

be accurate, and it’s just funny that it has 

happened that way.”  

 

Or: 

 

“You don’t know whether a product will be 

successful or not, so it’s a little harder to 

plan completely for it … So that’s one of 

the few things that I see really – we’ve got 

the representation in place, we’ve got the 

product, I think, is starting to attention, 

we’ve got very attractive new buying … 

getting to the right people ... Well, 

obviously you have to recognize that 

uncontrolled growth is very dangerous. If 

you don’t have that understanding, you’re 

in deep, deep trouble.”  

 

Some entrepreneurs are intent on expanding 

their business right after the time the 

venture is launched. They set ambitious 

growth targets and seem to believe that it is 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

67 

possible to maintain rapid growth on a 

continuing basis.  

 

Thus: 

 

“And I wanted to create something that 

made a difference, but also that was 

growing… One of the things that we 

decided is to grow rapidly, to really get a 

much bigger piece of the pie.”  

 

Having expanded and stabilized the 

business, many entrepreneurs aim for 

further expansion of the business through 

either product and/or market diversification. 

This appears to follow a process of 

successive consolidation and expansion. 

Sometimes, the intention to diversify may 

arise as a direct outcome of the intent to 

survive and grow by going up the value-

chain.  

 

Thus: 

 

“Yes – the company went from what has 

been described as anything for money, it 

will undertake any contract where they 

would be getting paid for their services to 

one where they evolved to try to develop a 

product strategy and they had a couple of 

products, one of which had a competitive 

advantage and one they didn’t, and then 

focusing on where they had an advantage… 

What we decided to do was to expand 

geographically.”  

 

Or: 

 

“I would say this would cease to be a viable 

operation if within a year or so we don’t 

have revenues in excess of two or three 

million dollars. And to do that we actually 

need to expand the scope of the services, 

either geographically or through product 

lines. And we’re addressing both of those 

issues as we speak.”  

Having gone through the stages of launch, 

stability, growth, and possibly 

diversification, there occurs the stage when 

the entrepreneur has the intention to exit or 

intention to divest from the business. The 

intention may arise because in the opinion 

of the entrepreneur the business has lost its 

relevance or because the entrepreneur has 

found an alternative business idea or 

venture to henceforth focus his/her energies 

on.  

 

Thus: 

 

 “I’m not sure how long… my personal 

strategy, which I’ve communicated to all 

the shareholders, is to actually retire in four 

to five years.”  

 

Or: 

 

“My personal goal is to back out within two 

to three years of active day to day and set 

the company up so the employees can buy it 

and take over. Where do I go from there?… 

Um, well I have some other plans… another 

passion you can say – that I have been 

nurturing. And I would like to pursue that 

as a new business.”  

 

To summarize, it appears that after the 

initial intention to launch the business has 

been achieved, entrepreneurial intentions do 

not disappear or remain static. Rather, they 

continually evolve and change with time. 

While intention to launch is usually 

followed by intention to stabilize, expand, 

diversify, and exit at some point in time, 

these in-between stages may overlap and 

reinforce each other. For example, an 

intention to stabilize may actually be 

motivated by an intention to expand, or an 

intention to diversify may be adopted as a 

way of achieving expansion. Even an 

intention to exit a product line or 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

68 

geographical market may be motivated by a 

need to stabilize and grow the business. 

 

Having noted that entrepreneurial intentions 

follow a dynamic process and change over 

time, the question that arises is why do they 

change? We find that the change happens as 

an outcome of interaction of several factors 

– environment, organization, and the 

individual entrepreneur. The first category 

of factors relates to the external 

environment, i.e. the industry, market, and 

competition.  

 

Thus:  

 

“The market dictates the products this 

company develops… It can be episodic at 

times… If we are successful in endeavors 

we’ll put more time and resources into it, 

otherwise not… In this case, the decision 

was that we were not going to be able to 

make money, so we decided it was 

appropriate to close this facility and 

redeploy the resources elsewhere.”  

 

Or: 

 

 “Most of it is market driven. It’s based on 

customers’ needs and the way you address 

them. If the customers’ needs change, then 

you have to change with them… You can’t 

hide in a box… Because you are not stuck 

in some little world, you’re out in 

everybody’s world all the time and you 

learn a lot. I mean, the ways other people 

run their businesses. And they love talking 

about it. And a lot of them want to share 

that.”  

 

Or again: 

 

“Without resources and team, your growth 

aspirations remain on paper. You develop a 

growth plan, but you have to convince your 

employees about the vision, and then get 

them to help you achieve it.” 

 

In other words, a second category of factors 

are those relating to the entrepreneurial 

organization itself. These may include 

factors such resource availability, the 

experience, and involvement of the 

entrepreneur’s management team, the 

internal organizational processes and 

capabilities, and learning efforts within the 

firm. 

 

Thus: 

 

“It goes in cycles. Technical side was first. I 

have an idea how to make that work – how 

do we turn it from my head into a tangible 

product? And you see that the evolution of 

hiring in this company really tells the story 

as to what was most important… Then the 

next phase comes with: we built 

technology, proved the concept, we need 

money. Then you hire more people who can 

harden it off, costs money, now I need more 

and more money. In the meantime, we had 

to hire some business development people – 

sales people – to be able to start looking 

outward. Now we’ve got this product, how 

are we selling it, who are our partners, how 

is that happening? Then we need more 

financing because we’re building new 

generation of products and we now need to 

enhance who we’re going out to. So it kind 

of goes around and around in a big circle. 

But every time it gets more complex, every 

time. And bigger… And it’s starting to 

happen simultaneously.”  

 

Finally, there exist a third set of factors that 

affect entrepreneurial intentions. These 

include factors relating to the personal 

disposition of the entrepreneur or his/her 

evolving personal situation. Some of the 

factors that we identify in this category are: 

the entrepreneur’s risk perception, personal 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

69 

involvement, ability to let go of some of the 

personal involvement with time, and 

competing entrepreneurial desires such as 

achieving a balance between work and 

personal life. The quotes below exemplify 

this: 

 

“So the key thing that’s been important for 

me, from being hands on - this is my baby - 

I keep feeling like I’m taking off jackets 

every other day…  And I have a wonderful 

management team who is incredibly 

capable and as we move forward, continue 

to find exact areas in which they can focus 

and really add value and I can set that part 

off in my mind. So, I keep taking off all 

these jackets and I don’t have to wear them 

all anymore… I can take some new 

directions.”  

 

Or: 

 

“I have let go some of the hold in the 

company… You can’t do everything by 

yourself – you have to believe in the team 

you have assembled… And once you 

realize this, it creates in you a desire to 

move on and do something different.” 

 

Second-Order Findings 

 As part of this analysis, we develop an  

understanding of the process issues that 

seem to be driving entrepreneurial 

intentions in the group of firms comprising 

our sample. Our analysis suggests that the 

twin processes of sensemaking and 

sensegiving (Gioia and Chittipeddi, 1991; 

Weick, 1979) seem to operating in 

development of entrepreneurial intentions 

as well as changes in them over time. In 

their study, Gioia and Chittipeddi (1991) 

found that during initiation of strategic 

change in firms, the twin processes of 

sensemaking and sensegiving by the firm’s 

CEO vis-à-vis his/her associates assume 

critical importance. In view of the fact that 

in the SMEs studied by us the entrepreneur 

performs the most central role and in effect 

serves as the CEO of the firm, we find a 

similar set of processes to be operating. 

However, in addition to what was already 

noted by Gioia and Chittipeddi (1991), we 

find that the twin processes of sensemaking 

and sensegiving operate in a contextual 

space spread across multiple levels: the 

environment, organization, and the 

entrepreneur. Therefore, in our view, the 

overall model of evolution of 

entrepreneurial intentions may be 

characterized as being 3P, i.e. Precursors-

Process-Product. This is depicted in Figure 

1.  

 

Figure 1: The 3P Model of Evolution of Entrepreneurial Growth Intentions 

 

 

 

 

 

 

 

 

 

 

 

 

 

Precursors 

Environment 

Entrepreneur 

Organization 

Process 

Sensemaking 

Sensegiving 

Product 

 

 Intention 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

70 

Precursors The first P or “Precursors” 
denote those operating contextual factors 

that we noted in our study. These arise at 

multiple levels (environment, organization, 

and entrepreneur) and act as inputs to the 

next stage, i.e. the “Process” of 

development of intentions over time. This 

wider context not only includes the 

individual entrepreneur (in terms of 

personal disposition, preferences, 

motivation, aspiration, and skills) but also 

the environment in which the entrepreneur 

operates as well as the pre-organization and 

the organization the entrepreneur helps 

create. At the same time, these contextual 

factors continually interact with each other 

and not just through the entrepreneur, even 

though the entrepreneur occupies the central 

position in this classification of contextual 

factors. For instance, at the pre-organization 

stage, the entrepreneur combines multiple 

responsibilities and closely interacts with 

the environment (customers, competitors, 

venture capitalists, and banks). However, 

after the creation of the new venture, the 

environment interacts with the organization 

not only through the entrepreneur but also 

directly. Thus, entities operating in the 

environment such as the venture capitalist 

or the bank work with the entrepreneur as 

well as with other organizational members 

such as the firm’s management team. It is 

important to recognize the existence of 

multiple inter-linkages amongst the 

precursor variables, because this helps us to 

conceptualize the complex nature of the 

precursor influences on the process of 

intention formulation and its evolution and 

change over time. 

 

Process The second P or the “Process” 

comprises the actual process of intention 

development and modification as engaged 

in by the entrepreneur under the influence 

of precursors, and in association with 

his/her employees. We found that the actual 

process of evolution of entrepreneurial 

intention involves a circular relationship 

between sensemaking and sensegiving, 

even as it operates within the wider 

contextual arrangement of the three 

precursors (environment, organization, and 

entrepreneur). Thus, on the one hand the 

entrepreneur is engaged in interpretation 

and sensemaking of external stimuli (e.g. 

opportunities) as well as his/her internal 

aspirations with respect to creating a new 

venture. On the other hand, the entrepreneur 

must engage in sensegiving towards other 

critical stakeholders (e.g. venture capitalist, 

bank, government, customers, and 

employees) who help and support are 

required in this process of creation of the 

new venture. We also found that the twin 

processes of sensemaking and sensegiving 

not only influence each other but also 

feedback on to the precursor factors. Thus, 

for instance in view of sensemaking-

sensegiving the entrepreneur’s personal 

disposition and/or motivation to create a 

new venture may undergo change. If the 

market conditions are interpreted to be 

extremely hostile at that point in time the 

entrepreneur may decide to give up the 

objective of creating a new venture.  

Similarly, if an entrepreneur believes that 

support from a venture capitalist is difficult 

to come by, he/she may decide to scale 

down the operations of the venture to be 

created and commence operations on a 

smaller scale than what was anticipated 

before. 

 

Product The third P or the “Product” is the 

intention. In our conceptualization, product 

denotes not only the intent in the mind of 

the entrepreneur to create, expand, or exit 

from a venture but also the resulting action. 

Not only is the process of emergence of 

intention highly dynamic (arising as the 

outcome of the circular sensemaking-

sensegiving loop) but, in turn, it also feeds 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

71 

back into the prior stages (precursor and 

process). For example, having developed an 

intention to launch a venture, the 

entrepreneur may be successful in ensuring 

a supply of critical resources from partners 

in the external environment (e.g. venture 

capital, human resources, and supplies). 

Similarly, having recognized an intention as 

it emerges and taking a series of action that 

lead to certain outcome, the entrepreneur’s 

subsequent sensemaking and sensegiving 

may be affected. 

 

CONCLUSION 

 

Contribution 

In this paper, we used an inductive, 

grounded theory approach to explain how 

entrepreneurial growth intentions evolve as 

a process. Our longitudinal study of the 

same group of entrepreneurs over a five-

year timeframe suggests that: (i) 

entrepreneurial intentions are not static but 

follow an evolutionary path, (ii) the overall 

process of evolution of entrepreneurial 

intentions is characterized by three stages or 

the 3Ps (precursors, process, and product) 

with associated feedback loops, and (iii) the 

overall model is complex and incorporates 

inputs from multiple levels (environment, 

organization, and entrepreneur). 

 

By focusing too much attention on the 

initial entrepreneurial intention leading to 

creation of a new venture, extant research 

has rather neglected the issue of how or 

why intentions change with time, especially 

regarding the growth aspirations of the new 

venture. We believe that the first 

contribution of our study is in attempting to 

bridge this gap in the current state of the 

research on entrepreneurship theory. The 

inductive, longitudinal nature of our 

research allows us to study the dynamics 

associated with entrepreneurial intention as 

it evolves over time through a process of 

entrepreneurial sensemaking-sensegiving. 

Our second contribution is in developing 

the 3P process model, which serves to 

capture the essential dynamic of the 

entrepreneurial growth intention process. 

Specifically, this is achieved through the 

3Ps - precursors, process, and product – of 

intentions as well as in terms of the 

interactive loops and feedback linkages that 

are depicted in the model. In developing the 

3P model, not only are we able to trace the 

evolutionary path of entrepreneurial 

intentions but also comment about its 

multidimensional nature that spans across 

multiple levels of analysis - environment, 

organization (which also includes the pre-

organization), and the entrepreneur. We 

believe that this opens up exciting 

possibilities for future research, both toward 

theory building as well as empirical testing 

of relationships of antecedents of 

entrepreneurial growth intentions and 

contingencies on the process. 

 

Directions for Future Research 

Given its exploratory nature, the present 

study has concentrated its efforts in 

developing an indicative, overall model of 

how intentions emerge in entrepreneurial 

firms. The resulting conceptual model 

developed is anchored in field-level data 

gathered over a five-year timeframe. As 

such, it provides us with a description of the 

processes engaged in by entrepreneurs in 

our study. At the same time, our study does 

not propose any specific hypothesis to 

speculate upon the nature of specific 

relationships between the chosen constructs. 

We suggest that this can be taken up in a 

subsequent study. 

 

As a follow-up research, the following 

directions are proposed. First, it may be 

worthwhile to conduct a qualitative study 

that focuses on understanding the precise 

nature of the relationships within as well as 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

72 

between the 3Ps. More specifically, the 

challenge will be to understand how these 

relationships cross multiple levels of 

analysis. Similarly, it will be important to 

understand how the twin processes of 

sensemaking and sensegiving relate with 

each other across multiple levels (individual 

entrepreneur, organization, and the wider 

environment incorporating the venture’s 

external stakeholders). Future research 

could take this up. 

 

Limitations 

Our study has several limitations. First, 

given its exploratory nature, it is a “macro-

level” study that aims to identify the overall 

process characterizing a phenomenon of 

interest (entrepreneurial intentions). To 

achieve this overall understanding, the 

study sacrifices “micro-level” detailing of 

specific relationships that may exist 

between the constructs identified in the 

model, which we have suggested can form 

the basis of future research on the 

phenomenon. Second, in order to isolate the 

characteristics of the phenomenon under 

study, we concentrated on a small, purpose 

sample: fast-growing entrepreneurial firms 

based in one Canadian province that had 

accessed mezzanine financing from a single 

venture capital agency. This makes it 

difficult to generalize to the population 

based on the sample. It is possible that 

entrepreneurial firms in other operating 

contexts may exhibit a somewhat different 

process of actual evolution of 

entrepreneurial intentions over time. 

Finally, the sample of firms that we studied 

has a survivor-bias in that we have not been 

able to investigate the process of intention 

formulation in companies that have gone 

out of business. Even within our sample, 

while we expected to find instances of exit 

decisions (at least with respect to market 

segments and/or product lines), we noted 

that very few entrepreneurs talked about the 

intention to exit. This perhaps is a 

characteristic of our sample. As our study is 

based on a sample of high-growth firms, by 

definition intention to exit would not prevail 

in such firms at the time of conduct of the 

study. 

 

Insights for Practice  

Our research has several implications for 

practitioners. First, it suggests that even 

though an entrepreneurial firm is launched 

by achieving a match between the initial 

vision and motivation of an entrepreneur 

and opportunities identified in the external 

environment, entrepreneurial intentions do 

not remain static but evolve with time based 

on a complex process that incorporates 

several parameters. In that sense, the 

continued existence of an entrepreneurial 

venture is very much an outcome of 

interaction of a series of environmental, 

organizational, and entrepreneurial factors. 

In other words, our study reiterates the 

importance of incorporating into assessment 

of new venture creation and sustenance 

factors that transgress the individual 

entrepreneur. 

 

Second, our study clearly suggests the 

importance of understanding the process 

nature of the phenomenon. Therefore, 

practicing entrepreneurs stand to gain if 

they focus not just on the expected 

outcomes of their decisions but also the 

processes associated with them. 

Specifically, it becomes extremely critical 

to understand how the twin processes of 

sensemaking and sensegiving operate and 

not just within the entrepreneurial mind but 

in the wider cognitive system incorporating 

other external stakeholders as well. We 

believe that entrepreneurs intuitively do this 

already. However, our research indicates 

possible reasons behind why entrepreneurs 

may be doing so. It also indicates what the 

results of such deliberations may be, as far 



Journal of Small Business Strategy                                                                         Vol. 24, No. 1  

73 

as evolution of entrepreneurial growth 

intentions over time is concerned.   

 

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Dev K. Dutta is an Associate Professor of 

Strategic Management & Entrepreneurship 

in the Management Department at the Peter 

T Paul College of Business and Economics, 

University of New Hampshire. He brings 

with him about fifteen years of professional 

experience as a strategist and about twelve 

years of academic experience in strategy 

and entrepreneurship research. He research 

has been published in many peer-reviewed  

journals, including the Journal of Business 

Venturing, Entrepreneurship: Theory & 

Practice, and the International 

Entrepreneurship and Management Journal. 

He regularly presents his research at 

national and international conferences such 

as the annual meetings of the Strategic 

Management Society, Academy of 

Management, Academy of International 

Business, and the Babson College 

Entrepreneurship Research Conference. 

 

Stewart Thornhill, Executive Director of 

the Pierre L. Morrissette Institute for 

Entrepreneurship, is Associate Professor of 

Strategy and Entrepreneurship at the 

Richard Ivey School of Business, Western 

University, Canada. 

 

A leader in executive education, Dr. 

Thornhill is Faculty Director for the Maple 

Leaf Leadership Academy, Industry 

Canada's Executive Learning Initiative, and 

the ATCO Strategic Leadership Program. 

Other corporate clients include the Toronto 

Dominion Bank, Bell Canada, Newalta, 

Magellan Aerospace and the Globe and 

Mail. He also works with entrepreneurs 

leading Canada's fastest growing companies 

through the annual QUANTUMSHIFT™ 

Executive Development Program.

 

 



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