Research: Unraveling the Pursuit of Entrepreneurship in the Fashion Industry

By: Sarah Magnus-Sharpe
Fashion model on runway

New research from the Cornell SC Johnson College of Business sheds light on career development and entrepreneurship within the global high-end fashion industry. In the article “Prêt-à-quitter: Career Mobility and Entrepreneurship in the Global High-End Fashion Industry,” published in the Journal of Business Venturing, Kim Claes, a visiting assistant professor in the Samuel Curtis Johnson Graduate School of Management, and his co-authors take a sociological perspective to explore why some individuals enter and return to entrepreneurship.

Entrepreneurship has long been associated with individuals possessing specific qualities and abilities, and many believe that entrepreneurs are born with a set of skills that make them more inclined to succeed; however, this study takes a different approach. The research suggests that launching a startup is not solely based on personal characteristics. Instead, it delves into how organizational roles and social dynamics influence the choice. In particular, the study highlights the unique role of the organizational founder and its impact on career mobility and entrepreneurship for both founders and employees.

Founders of organizations are unique in their right to represent their businesses; the role creates a strong commitment to the organization and deters individuals from seeking opportunities outside of it. Founders are generally the face of the organization and are highly invested in its success, and it’s this responsibility that keeps them committed to their venture.

In addition, the study identifies a charismatic authority that founders possess. Their presence inspires other employees of the organization to follow their lead and consider beginning a startup themselves. This aura of deference and emulation encourages individuals to become entrepreneurs when working alongside a current founder, not an ex-founder.

To test these theories, the study investigated the global high-end fashion industry, an ideal testing ground with new ventures relatively common and viewed as a vital part of a designer’s career development. In creative industries like fashion, roles within organizations are not too rigid; mobility between employee roles and entrepreneurship founder roles is common.

The researchers gathered data on job transitions in the fashion industry involving key fashion designers between 1945 and 2010. They started in 1945 because it marked the rebirth of the global fashion industry after World War II. The average fashion designer in the data was a 43-year-old male (66%) working a second job in their career. The average observation was for a 22-year-old fashion house that did not belong to a conglomerate. The data allowed them to explore how individuals move between being founders and employees of organizations and their transitions into and out of entrepreneurship.

The study revealed some fascinating novel insights. It showed strong relationships between the founder role, career mobility, and entrepreneurship. Leaving a founder role disrupts the connection between a founder’s personal identity and the social identity afforded by the role. To restore this alignment, ex-founders often return to entrepreneurship.

Furthermore, the charismatic authority of founders plays a crucial role. Employees working alongside founders are more likely to consider entrepreneurship themselves, inspired by the founder’s leadership and success.

“Our research helps us further understand the complex dynamics of career mobility and entrepreneurship and challenges the idea that entrepreneurs are a fixed set of individuals with specific traits,” said Claes, whose co-authors included Stanislav Dobrev of the University of Wisconsin’s Lubar College of Business and Frédéric Godart of INSEAD. “Instead, it shows that career choices are influenced by organizational roles, personal identities, and leaders’ charisma.

“In the ever-evolving world of entrepreneurship, this study reminds us that career paths are shaped not only by personal capital, but also by various other factors, including roles and interaction with co-workers. It highlights the significance of understanding the social and organizational context when studying career mobility and entrepreneurship.”