Developing a model for the post-failure social and psychological processes among Iranian entrepreneurs: A narrative research

In contrast to success, failure and its aftermaths have always received less attention in entrepreneurship literature. In addition to social and psychological challenges for entrepreneurs, failure can also bring positive outcomes for them. These social and psychological processes after failure and their interaction with each other are less investigated. Moreover, previous studies have acknowledged the need for field research on entrepreneurial failure.

The present study aims to develop a model for the post-failure social and psychological processes among Iranian entrepreneurs.

The present research is an applied one in terms of purpose and a narrative one in terms of method. The statistical population is Iranian entrepreneurs who failed in 2020 and 2021 in Iran. We used a purposive sampling method to choose the samples. The sample size is determined based on theoretical saturation, and we conduct semi-structured interviews to gather data. Data is analyzed using the grounded theory method.

social and psychological processes after failure include the following main categories: individual factors, institutional factors, cognitive biases, failure costs, coping strategies, social-psychological reactions, intervening factors, and positive outcomes.

The most important practical implication of this research for entrepreneurs is to identify coping strategies (i.e., psychological recovery strategies and ego-protective strategies) to reduce psychological costs and to identify impression management strategies (i.e., jumping ship, concealing failure, desensitization, and compensation) to reduce the social costs of failure. Its policy implication for policymakers is to foster an enterprising culture and revise the bankruptcy laws to reduce entrepreneurs' failure costs.