Entrepreneurial Action and Institutional Resilience: A Narrative Analysis of the Business Model at Datum TI

1. Introduction and Problem Statement

Entrepreneurship is widely recognized as a primary engine of economic growth and innovation. However, this activity does not occur in a vacuum; it is simultaneously enabled and constrained by the institutional environment, composed of formal rules, such as laws and regulations, and informal norms, such as customs and traditions (Elert & Henrekson, 2021). Traditionally, the literature suggested that institutions determined the productivity of the entrepreneur, but recent studies point to a bidirectional causality (Elert & Henrekson, 2017): on the one hand, institutions shape entrepreneurial action, and on the other hand, entrepreneurs are also active agents who influence the evolution of institutions themselves.

In the Brazilian setting, state intervention and regulatory complexity pose significant challenges. In many situations, institutions are perceived as “perverse” or as generators of uncertainty, which can stifle economic development. In the face of state interventions, the entrepreneur is not limited to a discrete decision of compliance. As proposed in Paranaiba (2025), entrepreneurial action in the face of regulation lies in a space between following (abide) and not following (evade or alter), in which the entrepreneur uses the regulatory apparatus as a foundation or resource to adjust their business model and continue creating value.

The classic work of Baumol (1990) categorizes the allocation of entrepreneurial effort among productive, unproductive, or destructive activities, according to the incentive structure generated by the prevailing rules. However, when analyzing the direct relationship with formal laws and regulations, the literature on regulatory governance broadens this perspective. Far from viewing laws as static and purely objective barriers, authors such as Lucas et al. (2022) show that formal rules are interpreted and applied under the strong influence of the social context, legal intermediaries, and the agent’s subjectivity. Based on the bidirectional formulation of Elert and Henrekson (2017), entrepreneurial reactions to institutions are delimited along three main fronts: complying (abide), strengthening the status quo; altering (alter), seeking modifications through lobbying or political activity; and evading (evade), using market innovations to circumvent stifling restrictions. In the face of complex regulatory scenarios, Paranaiba (2025) argues that entrepreneurial action is not limited to binary decisions, but operates in a subjective and continuous space between following and not following in order to adjust its business model. When these rules fail to support efficient market transactions, institutional voids arise, a concept that, according to Webb et al. (2020), raises operating costs and demands highly resilient organizational responses to make economic exchanges viable.

This study aims to analyze how the company Datum TI creates, configures, and appropriates value in the context of state interventions and uncertainties, using a qualitative approach grounded in the value tripod (Meirelles, 2018) and in the technique of narrative analysis.

The choice of Datum TI is justified by its 25-year trajectory, marked by resilience and by a culture of proactive attitude in the face of a state model that often opposes the businessperson and lacks institutional checks and balances. Through the narrative of its managers, we seek to understand how the company adjusts its business model and allocates its resources – focusing especially on human capital – to overcome barriers and convert what would be regulatory obstacles into opportunities for competitive differentiation in the technology market.

2. Entrepreneurial Action, Regulation, and the Value Tripod: An Integrated Theoretical Framework

The business model constitutes an emergent property of the organization that describes the practical logic by which a firm solves the central problem of its existence. From the perspective of Meirelles’s (2018) Value Tripod, this construct is broken down into three inseparable and theoretically integrated dimensions: Value Creation, Value Configuration, and Value Appropriation. Value Creation refers to the process of discovering and recognizing market and innovation opportunities, grounded in consumers’ subjective perception of utility and in the formulation of a superior value proposition. Value Configuration, in turn, constitutes the practical implementation of this opportunity through the physical and technological articulation of resources, flows of internal activities (whether in the form of a value chain, value shop, or value network), and organizational governance arrangements. Finally, Value Appropriation represents the process of capturing financial returns and ensuring the sustainability of the business vis-à-vis competitors, involving the management of the revenue model, entry barriers, and the complementary assets needed to retain the value generated.

Thus, Meirelles’s (2018) Value Tripod establishes that the business model cannot be analyzed in a static or fragmented way; it is the result of practical and dynamic decisions made by agents who act at the intersection between internal organizational design and the exogenous forces of the market. Unlike traditional strategy theories, focused exclusively on isolated competitive advantage, the analysis of the business model from the standpoint of value makes it possible to understand how internal factors and the firm’s entrepreneurial agency actively interact with the constraints and incentives of the business environment in which it is embedded.

Entrepreneurial action does not occur in a social vacuum, being simultaneously enabled and constrained by the institutional environment — composed of formal laws and regulations and of informal norms and customs. According to Baumol (1990), institutions act as the "rules of the game" that direct entrepreneurial talent toward productive activities (generating social welfare), unproductive activities (rent extraction and rent-seeking), or destructive ones. However, beyond Baumol’s macro-level direction, the micro-level conduct of the entrepreneur toward state norms involves granular strategic behaviors. Expanding the classic typology of strategic responses, Elert and Henrekson (2017, 2021) structure entrepreneurial reactions along three axes of institutional engagement: complying (abide), altering (alter), or evading (evade).

It is essential to understand that each of these regulatory stances is not an isolated choice, but rather a strategic decision that directly reconfigures the organization’s Value Tripod. By opting for strict observance (abide) of the formal rules and licenses required by the regulatory apparatus, the entrepreneur decides to operate entirely within the scope established by the legislator. This compliance behavior strengthens the legitimacy of prevailing institutions, reducing legal risks, but imposes a severe burden on entrepreneurial action. Unconditional respect for state norms and obligations (such as the regulatory burden L2 Burden; D'Andrea, 2023) binds the firm’s flow of activities, operating methods, and capital structure, defining and, at times, rigidifying its internal transaction-cost infrastructure.

The strategy of institutional alteration (alter) seeks to act directly on modifying the rules and on political lobbying before regulatory and legislative bodies in order to shape the business environment favorably. At the strategic level of the business model, the effort to commit resources to changing laws aims to shield and expand the channels of the value tripod. By securing regulatory privileges, redefining customs barriers, or establishing legal restrictions on potential competitors, large corporations use the political route to protect their profit margins and safeguard their specialized complementary assets against market imitation.

Strategic evasion (evade) occurs through disruptive innovations that exploit the ambiguities, contradictions, and institutional voids of a legal framework that does not keep pace with technological change. By adopting evasion tactics (evasive entrepreneurship; Elert & Henrekson, 2017), the entrepreneur focuses on a new value creation, proposing new "use values" (as observed in sharing economy platforms and data-based models) that escape traditional regulatory control. This stance uses legal contradiction as a catalyst for innovation, disrupting existing market equilibria without, however, immediately resorting to explicit illegality. This behavior characterizes what Lucas et al. (2022) conceptualize as 'gray market' rule-breaking (gray market rule-breaking), in which the entrepreneur exploits regulatory ambiguities and gaps in the interpretation of rules to claim the legality of their innovative solution. Thus, the firm floats in gray areas in search of profitability and customer acceptance.

In uncertain, unstable institutional environments marked by bureaucratic contradictions, the entrepreneur’s decision-making runs up against the barrier of institutional uncertainty (D'Andrea, 2023). D'Andrea (2023) points out that, if the entrepreneur is unable to deal with the uncertainties arising from the volatility and the weight imposed by the second institutional level (the level of formal rules of governance and regulation), any attempt to overcome technological or market uncertainties becomes unfeasible.

In this context of volatility, the classic binary division between "complying with" or "circumventing" the law proves analytically insufficient to explain the nuances of the firm’s adaptive behavior. As Lucas et al. (2022) argue, the firm’s relationship with the State should not be reduced to a static dichotomy of compliance versus non-compliance, since market rules are continuously reconstructed through enforcement failures and heterogeneous interpretations by the actors. As Paranaiba (2025) argues, entrepreneurial action faces a scenario of diffuse and subjective decision-making that takes place in the continuous space located between adherence (abide) and non-adherence (evade/alter). Rather than regulatory pressures figuring strictly as exogenous restrictive factors, the proactive entrepreneur uses them as a strategic resource within their business model.

Therefore, the conduct of "entrepreneuring within regulation" characterizes the judgment of the decision-maker who, subjectively, systematically reconfigures their Value Tripod to navigate institutional voids and take on the bearing of uncertainty (bearing uncertainty; Paranaiba, 2025). Through institutional agility and a robust operational backoffice, the firm is able to adapt its value proposition and its arrangement of resources, transforming the very cost of compliance into a reputational entry barrier against less structured competitors. This proactive professionalization reflects the argument of Pollman (2022), who points out that innovative firms in the technology sector come to integrate the management of regulatory affairs and legal compliance as core organizational competencies (core competency) in their strategic design, managing frictions with the State to consolidate their market position. Regulation ceases to be merely a limiting barrier and becomes integrated into the very survival heuristic of the business model, showing that corporate resilience emerges from the capacity to convert the bureaucratic burden into a strategic asset of differentiation and appropriation in the market.

3. Methodological Procedures: Strategy as Practice and Dialectical Narrative

The research is characterized as a qualitative and exploratory study, aimed at describing and understanding entrepreneurial action in the face of state interventions. The unit of analysis is the evolutionary process of the organization, understanding the business model as an emergent property that manifests itself and is reconfigured in response to pressures from the institutional environment.

The study adopts a combination of the strategy-as-practice approach with the process approach, specifically the dialectical view of process. From this perspective, the business model is understood as the practical result of a set of decisions and actions by multiple agents (managers, clients, and partners) that collide to produce new organizational forms.

Given the dynamic nature of the technology sector, we opted for granularity of events, prioritizing precise detail and in-depth examination of the facts recorded in Datum TI’s trajectory, rather than an analysis focused solely on the breadth of a long time horizon.

Primary data were collected through a structured interview conducted with the CEO and the Chief Operating Officer of Datum TI. The analysis of these data is grounded in narrative analysis, a technique that makes it possible to identify the “deep structure” of the accounts, revealing the generative mechanisms of the company’s decision-making process. The analytical procedure follows the stages proposed by Meirelles (2018).

• Storyline: Establishment of the interpretive lens based on the value tripod.

• Mapping of Oppositions: Identification of the dilemmas (implicit or explicit) faced by management, especially regarding institutional uncertainties.

• Construction of Syllogisms: Formulation of arguments in logical form to make explicit how the company resolved its dilemmas and which premises guided its actions.

• Coding and Analysis: Cross-referencing of the stories and syllogisms to identify the "recipe" for success or change in Datum TI’s business model in the face of State interventions.

4. Analysis and Discussion of Results: The Datum TI Case

4.1. Storyline: The Value Tripod at Datum TI

Datum TI’s 26-year trajectory illustrates the evolutionary process of an emergent property — its business model — which is dynamically reconfigured from the standpoint of Meirelles’s (2018) Value Tripod:

Value Creation:

Datum TI was born in the context of the "Millennium Bug" in 2000, discovering an immediate opportunity to solve critical pain points in calculation and ERP customization for large corporate clients. It evolved into a software-factory structure with high methodological maturity (CMMI and ISO standards), providing technology-agnostic services. Value creation lies in the sale of intellectual capital (customized technical knowledge) and in robust delivery that addresses the convenience pain points of large corporations (finance, retail) that understand the scalable return on technology investment.

With the company’s maturation and market needs, the acquisition of MG Info focuses on the "data-driven journey," specialized in organizing data in this “Age of Context" and of Artificial Intelligence. In an age in which "context is king" so that Artificial Intelligence does not hallucinate, organizing clients’ data becomes an indispensable technical prerequisite. The use-value delivered to the client is no longer merely the development of customized software (as in the Millennium Bug era) and becomes data intelligence and governance for corporate AI. The differentiator is no longer merely the technical "attitude" of delivery and becomes the delivery of solutions for the client’s productivity and cost reduction through data.

Value Configuration:

The operating model is characterized as asset-light (consisting essentially of computers and cloud-based/SaaS systems) and focused on the key human resource. Unlike leveraged competitors, Datum is financed exclusively by equity (reinvestment of cash from its own operations), maintaining decision-making sovereignty. Internally, governance underwent a crucial transition: from an informal "family-tribe culture" to the implementation of a robust backoffice (administrative, financial, legal) and a performance system focused on meritocracy and OKRs, supported by consulting. This transition is in line with Pollman’s (2022) empirical mapping, which shows that attracting professionals with knowledge of public bureaucracies and structuring internal compliance channels are indispensable milestones for technology companies to navigate complex regulatory environments safely and scalably.

Datum had methodological maturity in software engineering, but needed expertise in data science and AI to expand its architectural advantage in the value chain. MG Info comes in as the specialized complementary asset (Teece, 1986) that accelerates this delivery without Datum having to develop this competence from scratch.

Value Appropriation:

Value capture is based on the longevity and reliability of relationships with clients ("CPF to CPF"). Strategically, the company avoids fixed-scope contracts, adopting appropriation by hours worked or on-demand squads to mitigate operating losses. Revenue expansion occurs through organic growth (around 30% per year historically) and, recently, through the inorganic route, via the acquisition of the Minas Gerais-based company MG Info (focused on AI and data), reaching combined revenues of R$ 85 million.

The CEO mentions that the Minas Gerais mining and logistics market knows the strength of the MG Info name. By acquiring the company, Datum buys not only technology, but also reputation, brand, and already established relationship channels. This reaffirms the narrative that "CPF to CPF" trust is the greatest barrier against large competitors.

4.2. Mapping of Oppositions in Datum TI’s Trajectory

The dialectical movement of Datum TI managers’ decision-making in the face of market and institutional uncertainties reveals fundamental dilemmas:

Opposition 1 (Emergence of the Core): Methodological Rigidity (Thesis) vs. Pragmatic Versatility (Antithesis)

In the early days of the Rio Grande do Sul IT sector, Datum faced competitors that had been established since the 1990s, which held first-mover advantages in client contacts and in attracting talent from the best universities. To compete, Datum had to bring the rigor of structured software factories (CMMI) into collision with the extreme flexibility of the "jack-of-all-trades" professional (a full-stack programmer who handled everything from requirements to testing and devops), generating a differentiator of attitude and agility in delivery.

Opposition 2 (Capital Structure): Leverage for Rapid Expansion (Thesis) vs. Preservation of Control and Autonomy (Antithesis)

Although the technology market encourages venture capital funding or borrowing to gain market share quickly, Datum deliberately opted for organic growth through the reinvestment of its operating profits (own cash), shielding the company’s decisions from exogenous investor pressures.

Opposition 3 (Governance and Culture): Comfort of the "Family Tribe" (Thesis) vs. Rigor of Budgetary Meritocracy (Antithesis)

Growth and professionalization required efficient processes and the delegation of authority. The leadership faced the tension between maintaining the informal warmth of the early years and the need to implement a clear, meritocratic performance yardstick geared toward strict budget targets.

Opposition 4 (Institutional Uncertainty/L2 Burden): Rule-Breaking/Evasion (Evading/Rule-breaking) (Thesis) vs. Compliance and Operational Resilience (Abiding/Attitude) (Antithesis)

In the face of a complex, bureaucratic institutional environment marked by labor-law insecurity and fiscal volatility (tax reform), the managers rejected evasion or the pursuit of crony capitalism. Instead, they invested in shielded internal processes (specialized backoffice) and an active attitude, absorbing transaction costs without stepping outside legality.

Opposition 5 Regulatory Uncertainty and Data Responsibility (Thesis) vs. Strategic Positioning in Data Intelligence (Antithesis)

Datum TI’s recent inorganic acquisition of the Minas Gerais-based company MG Info marks a new vector in the dynamics of reconfiguring its business model. In the Value Tripod (Meirelles, 2018), the introduction of data intelligence and AI competencies reconfigures the organization’s value creation. However, this transition exposes Datum to a new formal regulatory burden (L2 Burden), characterized by the General Data Protection Law (LGPD) and the debates on the regulation of Artificial Intelligence. Instead of adopting a stance of evasion (evade), management entrepreneurs 'within' regulation: it uses the shielded legal compliance of its backoffice as a resource for differentiation. By ensuring that the data of large corporate clients are handled so that AI 'does not hallucinate', Datum takes on the institutional uncertainty (bearing uncertainty) that its clients do not wish to bear, converting regulatory data risk into a value-appropriation asset.

4.3. Construction of Logical Syllogisms

Below, the internal logic of the decision-making process is structured in syllogistic form, revealing the premises that guided Datum:

4.4. Coding and Analysis: The "Recipe" of Datum TI’s Business Model

Cross-referencing the dialectical oppositions and the logical syllogisms reveals the "recipe" for resilience and success of Datum TI’s business model in the face of State interventions and uncertainties.

Unlike startups that pursue regulatory disruption through rule-breaking stances or legal evasion, classified by Lucas et al. (2022) as conduct that exploits monitoring failures to evade sanctions, Datum TI practices a model of resilient compliance. The company understood subjectively that regulation, fiscal volatility, and labor costs in Brazil act as an insurmountable regulatory burden (L2 Burden) for small structures lacking organizational muscle.

The "recipe" of the model lies in the coordinated articulation of three strategic factors:

Independent Asset-Light Model: Exclusive investment of equity allowed the business model to develop without the debt pressures that stifle the cash flow of service companies in recessionary environments.

Conversion of Costs into Reputational Barriers: By investing heavily in a protective internal back office (a robust legal and tax backoffice), Datum masterfully absorbed state complexity. This stance is supported by the perspective of Pollman (2022), according to which companies that develop the capacity to respond promptly and in a structured manner to regulators transform the bureaucratic restrictions imposed on their sector into entry barriers against informal or less structured competitors. This high cost of compliance ironically became an entry barrier for new informal competitors and a seal of corporate security (attitude/trust) highly valued by large clients (banks and large retail chains) seeking security in fourth-party outsourcing.

Professionalization as Dialectical Coordination: By achieving the cultural synthesis — overcoming family informality and adopting budgetary meritocracy and OKRs —, Datum TI prepared the organizational structure needed to decentralize power and masterfully execute the inorganic acquisition of new technological assets (such as MG Info), showing that its model is highly elastic and adapted to thrive in unstable economies.

5. Final Considerations and Theoretical-Methodological Implications

This study aimed to analyze how the company Datum TI creates, configures, and appropriates value in the face of state interventions and uncertainties, using as a lens the Value Tripod (Meirelles, 2018) operationalized through a narrative analysis by dialectical oppositions. By retracing the organization’s 26-year trajectory from the standpoint of its managers, it was possible to understand that the adaptive process of the business model is not restricted to passive reactions or to purely binary decisions between following or breaking the formal rules of the game. The research revealed that the firm uses its entrepreneurial agency to interpret the unstable institutional environment subjectively, converting what would be a regulatory burden into a vector of differentiation and competitive sustainability in the technology market.

The empirical results consolidate a "recipe" for resilient compliance and corporate success structured on three fundamental pillars. First, the adoption of an asset-light operating model financed strictly by equity shielded the company’s cash flow against exogenous investor pressures and macroeconomic crises. Second, the cultural transition from informal “family” coordination to a decentralized meritocratic structure, based on OKRs, enabled the operational scale needed to carry out robust strategic moves, such as the inorganic acquisition of MG Info to internalize AI and data governance competencies. Finally, the strategic decision to internalize compliance costs through a specialized legal, tax, and administrative backoffice allowed Datum TI to take on the data (LGPD) and labor risks that its large corporate clients avoid managing, transforming the severe regulatory burden (L2 Burden) into a reputational entry barrier against informal competitors.

From a theoretical standpoint, this research offers a significant incremental contribution by promoting the conceptual coupling between bidirectional causality (Elert & Henrekson, 2017) and the Value Tripod (Meirelles, 2018), showing how abstract regulatory attitudes (abide, alter, evade) materialize in operational and financial decisions of value configuration and appropriation. Additionally, the study empirically validates Paranaiba’s (2025) thesis by showing that "entrepreneuring within regulation" constitutes a continuous and subjective space of uncertainty bearing (bearing uncertainty). In managerial practice, the evidence from this single case shows businesspeople in the technology sector that regulatory compliance should not be seen as a mere cost center or barrier, but rather as a strategic positioning resource capable of generating value and attracting large accounts that demand extreme legal certainty when contracting services.

As a limitation inherent to the qualitative method adopted, this research opted for the granularity of events in the trajectory of a single organization, which precludes direct statistical generalization of its results. Nevertheless, the rigor of the analytical coupling between narrative analysis by dialectical oppositions and the interpretive lens of the Value Tripod consolidates a replicable methodological framework for unraveling the nuances of the action of "entrepreneuring within regulation." To advance the literature on business models and institutions, we suggest quantitative and systematic studies, as well as surveys aimed at measuring decision-makers’ subjective perception of the regulatory environment. This research agenda, applied to an expanded base of firms in the technology services sector, will make it possible to test the validity of the "recipe" for resilient compliance and to identify patterns in the evolutionary and reconfiguration stages of business models operating under high levels of regulatory burden (L2 Burden) and institutional uncertainty.