Entrepreneurial Leadership under Regulatory Uncertainty: Reframing Compliance as Capability in Sri Lankan Digital Ventures

Abstract

Digital ventures in emerging economies increasingly operate where technological growth outpaces regulation. Yet, little is known about how entrepreneurial leaders respond to institutional voids in Sri Lankan e-commerce. This study examines how leaders transform regulatory uncertainty into strategic capability. Using an interpretivist qualitative design, it analyzes 123 documents from three anonymized digital platforms through thematic documentary analysis and multiple case synthesis. Findings show that compliance becomes strategic when leaders use regulatory alignment to build trust, legitimacy, and competitive positioning. Leaders also convert regulatory gray zones into adaptive action through interpretation, institutional engagement, and management of uneven compliance burdens. The study contributes by conceptualizing compliance as an entrepreneurial capability and regulatory awareness as a leadership competency.