Entrepreneurial Adaptation to Institutional Challenges: Evidence from Structured Distribution Networks in Algeria

Abstract

Entrepreneurship research has increasingly moved beyond static structural analyses to focus on what entrepreneurs actually do, the way in which they interpret constraints, make decisions, and adapt their practices in challenging environments. Within this perspective, franchising represents a particularly relevant organizational form, as it combines individual initiative with network-based coordination. In theory, franchising relies on a stable and supportive institutional framework to function effectively. In practice, however, such conditions are not always present.

This tension is especially visible in Algeria, where franchising, particularly in the distribution and retail sectors, has expanded despite persistent regulatory gaps, administrative uncertainty, and weak market-support institutions. Rather than preventing activity, these constraints have shaped distinctive entrepreneurial behaviors. This article examines entrepreneurship as an adaptive response of franchises to institutional challenges. Drawing on a behavioral entrepreneurship approach, it analyzes how franchise actors develop pragmatic strategies to cope with, bypass, or reconfigure institutional constraints. In doing so, the study contributes to a better understanding of entrepreneurship in complex and imperfect institutional environments.