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“Mudalalis” in Business and Society: A Critical Examination of Sri Lankan Entrepreneurs

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Thesis under embargo until 4th January 2027(2.57 MB)

Date

2025

Authors

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Singh, Smita
Raskovic, Matt

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Thesis

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Doctor of Philosophy

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Publisher

Auckland University of Technology

Abstract

We live in a world where we formulate different social identities and get evaluated by different social groups and societal stakeholders. In such a socially embedded world, stigma and legitimacy play important roles in business and privately. Stigma and legitimacy are complex, multi-level social constructs where social norms, beliefs, and values play a major role in their formation. In business contexts, they also influence the success and failure of entrepreneurs and their ventures in powerful ways by providing the foundation for the level of trust and acceptance between entrepreneurs and the other major stakeholders, like investors, customers, suppliers, and government regulators. Trust becomes crucial in overcoming the liabilities of newness, gaining access to limited resources, securing a reputation in the market, creating strategic partnerships, and ensuring long-term business viability. Despite their importance, management scholars observe an interesting paradox in the stigma-legitimacy relationship and their interplay. One group of management scholars posits that stigma and legitimacy exist on a single continuum – with legitimacy corresponding to a lack of stigma and the existence of illegitimacy. The other group suggests that stigma and legitimacy occupy two independent continuums. The single-continuum view suggests that both cannot coexist; if actors increase one, the other decreases. The view of two different continua, however, posits that stigma and legitimacy can coexist in an interdependent way, based on the audience or context. This theoretical tension and the highly socially embedded and contested nature of entrepreneurship in Sri Lanka represent the focal point of my PhD research. As I am Sri Lankan, I have decided to conduct my study in the emerging South Asian context of Sri Lanka, where entrepreneurs are typically referred to as Mudalalis. The indigenous term Mudalali carries a negative connotation, implying a ‘money lover’ and contributing to the stigmatization of Sri Lankan entrepreneurs, which is not a desired career path in Sri Lanka, contrary to many other emerging markets. Such stigmatization significantly impacts the actions and behaviours of Sri Lankan entrepreneurs as a mainstream social group (not a marginalized minority group), posing challenges to their long-term survival in the market. However, the situation also creates a unique space for entrepreneurship researchers to explore the intersection of stigma and legitimacy against the backdrop of religion and colonial history. Since the legitimization of stigmatized mainstream groups has not been widely studied in the entrepreneurship literature, my study has particular theoretical significance. Positioned within the interpretive paradigm, I have employed a qualitative thematic analysis to understand the sources and types of Sri Lankan entrepreneurs’ stigma, their stigma mitigation strategies, ways in which they seek to legitimize themselves in the eyes of the general public and on specific legitimacy-building mechanisms Sri Lankan entrepreneurs employ as individual, for their ventures, and collectively as a social group. Employing elite informant interviews, I have collected data from 30 Sri Lankan entrepreneurs. I present my findings in two empirical papers, one focusing on the relationship between stigma and legitimacy (i.e., Paper 1) and the other focusing on legitimacy and the micro-macro translation of legitimacy-as-perception (i.e., Paper 2). The study in Paper 1 employs an abductive qualitative approach. The findings draw on stigma sources and mitigation strategies proposed by Zhang et al. (2021), exploring both the relational nature of stigma and its multiple levels (Aranda et al., 2023). The findings reveal novel insights into the social identity stigmatization of mainstream entrepreneurs, highlighting various sources (i.e., moral, associational and tribal stigma) and characteristics of stigma (i.e., centrality, disruptiveness and malleability). My findings also point to specific strategies Sri Lankan entrepreneurs use to mitigate the stigma associated with their social identity. These strategies include strategies, like, boundary management, dilution, reconstruction, and emotional work – collectively reflecting the complex and multi-level nature of entrepreneurial stigma where social cognition plays an important role against the backdrop of specific institutional logics (i.e., religion, profession and the market) and colonial history. The second empirical paper explores the multi-level nature of the entrepreneurial legitimacy of Sri Lankan entrepreneurs. Employing the less studied legitimacy-as-perception perspective introduced by Suddaby et al. (2017), the paper examines the multi-level nature of entrepreneurial legitimacy, and the cross-level effects of their associational stigma linked to Mudalalis. The qualitative thematic analysis of in-depth interviews with 30 Sri Lankan entrepreneurs reveals novel insights into the entrepreneurial legitimation processes at the individual, firm, and collective levels. Perhaps most importantly, it shows how Sri Lankan entrepreneurs use their ventures as vehicles for external social legitimation, not just internal self-identity and self-esteem. Furthermore, my findings also point to an agent-object duality within the process of entrepreneurial legitimation at individual, firm and collective levels, again driven by multi-level socio-cognitive mechanisms. In pursuing social legitimacy, Sri Lankan entrepreneurs engage in three important legitimacy-building mechanisms across all three levels, namely, differentiation, symbolism and distancing. While being stigmatized through their association with Mudalalis, Sri Lankan entrepreneurs also at the same time also perpetuate the stigma against the Mudalalis, thus acting as both victims and perpetrators of the social stigma of the Mudalalis.

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http://hdl.handle.net/10292/19473

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