Entrepreneurial Opportunity: The Oxygen or Phlogiston of Entrepreneurship Research?

7 July 2015 at 10:51 am 3 comments

| Peter Klein |

PhlogistoncollectorDon’t miss this PDW at the upcoming Academy of Management conference in Vancouver. From organizer Per Davidssson:

I just wanted to bring your attention to a PDW I am organizing for the upcoming AoM meeting, where we will engage in frank and in-depth discussions about the problems and merits of the popular notion of “entrepreneurial opportunity”. We have been fortunate to gather a collection of very strong scholars and independent thinkers as presenters and discussants in this PDW: Richard J. Arend, Dimo Dimov, Denis Grégoire, Peter G. Klein, Moren Lévesque, Saras Sarasvathy, and Matthew Wood. . This illustrious group of colleagues will make sure the deliberations do not focus on a “beauty contest” between “discovery” and “creation” views but instead reach beyond limitations of both.  

I encourage you to join us for this session, and to make absolutely sure I won’t send you to the wrong place at the right time I have copied the details straight from the online program:

Title: Entrepreneurial Opportunity: The Oxygen or Phlogiston of Entrepreneurship Research? (session #365)

Date & Time: Saturday, August 08, 2015, 12:30:00 PM – 3:00:00 PM

Hotel & Room: Vancouver Convention Centre, Room 012

Further elaboration follows below. Heartily welcome!

* * * * * * * *

Entrepreneurial Opportunity: the Oxygen or Phlogiston of Entrepreneurship Research?


Reference to and debate about the notion of entrepreneurial opportunity has grown rapidly in entrepreneurship research in the last 10-15 years (Davidsson, 2015). The central role it has achieved is underlined by the fact that the concept is included in the new domain statement of the Entrepreneurship Division of AoM.

While spurring new research directions, “opportunity” is also an elusive notion. There is no agreement on the essential nature of entrepreneurial opportunities, and even those who subscribe to distinct “paradigms” or “theories” of entrepreneurial opportunities struggle with internal consistency regarding whether such entities fundamentally are individual cognitions, social constructions, or sets of objective, external conditions. Capturing “opportunities” in empirical research is also a major challenge. As a result, many central questions concerning entrepreneurial opportunities remain unanswered. So, should “entrepreneurial opportunity” remain a central building block in entrepreneurship research? Is it the oxygen that can give life and vigor to future entrepreneurship research? Or has it now become more like phlogiston; a once helpful idea that has become dated and instead threatens to stifle further progress? Are there better ways to conceptualize and empirically capture the underlying phenomena?

In this PDW, prominent theorists and empiricists share their views and facilitate discussion among the participants. The goal is frank interaction about the promises and problems of the central notion of entrepreneurial opportunity as well as identification of the most important “dos” and “don’ts” for future research on the phenomena commonly addressed under that label.



Per Davidsson (Queensland University of Technology, organizer) [my own pre-PDW views on the issues can be found here]

Five “Mini-Presentations”

In alphabetical order:

Dimo Dimov (University of Bath): “Schrödinger’s cat, Wicked Problems, and Entrepreneurial Opportunities”

Denis Grégoire (HEC Montreal): “Opportunities, Identification and Action: Distinctions and Integration”

Peter G. Klein (University of Missouri–Columbia): “Entrepreneurship as Beliefs, Actions, and Adjustments: No ‘Opportunities’ Needed”

Saras Sarasvathy (Darden Business School): Title to be determined

Matthew Wood (Baylor University): “Pitfalls of Entrepreneurial Opportunity: An Issue of Construct or Process Clarity?”   

Questions and Interaction from the Audience

Round Tables + Reports

Discussant Wrap-Up

Discussant 1: Moren Lévesque (York University)

Discussant 2: Richard Arend (U. of Missouri—Kansas City)

* * * * * * * *


Reference to and debate about the notion of entrepreneurial opportunity has grown rapidly in entrepreneurship research in the last 10-15 years. The number of articles in core journals that use the opportunity construct in title, keywords or abstract has almost tripled in the relatively short time since Short et al.’s (2010) review article was published (Davidsson, 2015). Many authors argue it has achieved a central role in entrepreneurship discourses and this is supported by the fact that the notion has made it into the domain statement of the Entrepreneurship Division of the Academy of Management. This Professional Development Workshop addresses whether the increasingly central concept of opportunity is the oxygen that can give life and vigor to future entrepreneurship research, or if it has become more like phlogiston2; a dated idea that after having been helpful for a while is threatening to stifle further progress?

Arguably, attention to entrepreneurial opportunities has reduced the exaggerated emphasis on the characteristics of the entrepreneurial individual as the primary (micro-level) explanation of entrepreneurial action and success that allegedly characterized prior entrepreneurship research (Gartner, 1988; Shane & Venkataraman, 2000). Further, highlighting opportunities may have helped carve out more of a unique role for entrepreneurship research by emphasizing the emergence of new economic activities (Wiklund et al., 2011) rather than the drivers of success of established ones; the latter being a topic studied by many other branches of economic and organizational research. Most would probably also agree that the notion has great intuitive appeal. In addition, research on this topic seems to have stimulated increased use of experimentation in entrepreneurship research (e.g., Grégoire & Shepherd, 2012; Wood et al., 2014).

However, “opportunity” is an elusive and debated notion. Despite claims to the contrary (Alvarez et al., 2013) there is no agreement in the literature on the definition and essential properties of entrepreneurial opportunities (e.g., Davidsson, 2015; Hansen et al., 2011). Although a diversity of views can be fruitful  (Gartner et al., 2003; Sarasvathy, 2014) it would seem problematic that even those who subscribe to distinct “paradigms” or “theories” of entrepreneurial opportunities struggle to achieve internal consistency even with such fundamental issues as regarding whether entrepreneurial opportunities essentially are individual cognitions, social constructions, or sets of objective, external conditions. For example, proponents of what has become known as the “discovery view” define opportunities as objective, external situations and yet entrepreneurs can choose to sell their opportunity to another actor (Shane & Venkataraman, 2000: 220 vs. 221, 224). They also alternate between levels by sometimes depicting new technologies as opportunities in themselves and in other instances using that label for specific applications of said technologies (Eckhardt & Shane, 2010: 49 vs. 61; Shane, 2003: 34 vs. 24). Proponents of the “creation view” insist that opportunities are actor-induced, socially constructed competitive imperfections in product- or factor markets, yet the “opportunity” label is also applied to an early stage, unproven idea; i.e., an individual cognition (Alvarez et al., 2013, pp. 302, 308, 310; cf. Alvarez & Barney, 2007, different parts of p. 15; Alvarez & Barney, 2013: 155).

Hence, construct clarity (Suddaby, 2010) has so far eluded central tenets of this research stream. Without construct clarity, it can be questioned whether “entrepreneurial opportunity” can be a foundation of good theory (Bacharach, 1989) or assessed empirically in the study of real world entrepreneurial processes (Dimov, 2011). Under the “discovery view”, how can actor-independent “opportunities” be identified and sampled by researchers? And if they are defined as favorable, how can characteristics of “opportunities”—and not just shortcomings of individuals—explain failure to act or to succeed, in line with the “nexus” idea of two interacting, micro-level explanantia? As regards the “creation” view, if “opportunity” is the outcome of the entrepreneur’s ingenious actions, what is it that they act on at early stages? And is the “opportunity” label even needed for the end product of the journey? Depending on the chosen theoretical perspective and level of analysis, would not more established and perhaps less elusive or contentious terms like “successful start-up”, “new (unsaturated) market”, or “new industry” work just as well to denote what the entrepreneur managed to create?

This said, the research stream on entrepreneurial opportunities is far from limited to works firmly associated with the “discovery” and “creation” views as they are commonly portrayed. Much conceptual and empirical insight has been provided by other authors and viewpoints (e.g., Ardichvili et al., 2003; Baron, 2006; Casson & Wadeson, 2007; Cornelissen & Clarke, 2010; Dimov, 2007, 2011; Grégoire et al., 2010; Grégoire & Shepherd, 2012; Holcombe, 2003; Klein, 2008; McMullen et al., 2007; McMullen & Shepherd, 2006; Mole & Mole, 2010; Plummer et al.,2007; Sarason et al., 2006; Sarasvathy et al., 2003; Wood et al., 2014; Wood & McKinley, 2010; Wood & Williams, 2014) offering alternative ways of dealing with the conceptual and empirical challenges.

So, can “entrepreneurial opportunity” serve well as the central building block in entrepreneurship research that Shane and Venkataraman (2000) argued for and many others claim it has become? What alternative conceptualizations and operationalizations may offer less problematic ways of capturing the same underlying phenomena? Assuming the entrepreneurial opportunity construct is neither completely useless nor completely problem-free for all purposes, for what kinds of theory, research questions, levels of analysis, and empirical methods are different notions of “opportunity” more and less useful or problematic, respectively?

In this PDW, prominent theorists and empiricists with varying degrees of embeddedness in the “entrepreneurial opportunities” stream share their insights and facilitate debate on the promises and problems of this central notion as a tool for increasing our understanding of entrepreneurial phenomena. The deliberations will specifically not focus on a “beauty contest” between “discovery” and “creation” views but aim to reach beyond limitations of both. The goal is to raise awareness of issues with current conceptualizations and research approaches and to stimulate successful, future research on the phenomena—central to entrepreneurship research—that are commonly discussed under the “opportunities” label.



Alvarez, S. A., & Barney, J. (2007). Discovery and creation: alternative theories of entrepreneurial creation. Strategic Entrepreneurship Journal, 1(1-2), 11-26.

Alvarez, S. A., & Barney, J. B. (2013). Epistemology, opportunities, and entrepreneurship: Comments on Venkataraman et al.(2012) and Shane (2012). Academy of management review, 38(1), 154-157.

Alvarez, S. A., Barney, J. B., & Anderson, P. (2013). Forming and exploiting opportunities: The implications of discovery and creation processes for entrepreneurial and organizational research. Organization Science, 24(1), 301-317.

Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18(1), 105-123.

Bacharach, S. B. (1989). Organizational theories: Some criteria for evaluation. Academy of management review, 496-515.

Baron, R. (2006). Opportunity recognition as pattern recognition: How entrepreneurs “connect the dots” to identify new business opportunities. Academy of Management Perspectives, 20(1), 104-119.

Casson, M., & Wadeson, N. (2007). The discovery of opportunities: Extending the economic theory of the entrepreneur. Small Business Economics, 28(4), 285-300.

Cornelissen, J. P., & Clarke, J. S. (2010). Imagining and rationalizing opportunities: inductive reasoning and the creation and justification of new ventures. Academy of management review, 35(4), 539-557.

Davidsson, P. (2015). Entrepreneurial opportunities and the entrepreneurship nexus: A re-conceptualization. Journal of Business Venturing. 30, 674-695.

Dimov, D. (2007). Beyond the single‐person, single‐insight attribution in understanding entrepreneurial opportunities. Entrepreneurship Theory and Practice, 31(5), 713-731.

Dimov, D. (2011). Grappling with the unbearable elusiveness of entrepreneurial opportunities. Entrepreneurship Theory and Practice, 35(1), 57-81.

Eckhardt, J. T., & Shane, S. (2010). An update to the individual-opportunity nexus. Handbook of Entrepreneurship Research, 47-76.

Gartner, W. B. (1988). “Who is an Entrepreneur?” is the wrong question. American Small Business Journal, 12(4), 11-31.

Gartner, W. B., Carter, N. M., & Hills, G. E. (2003). The language of opportunity. In C. Steyaert & D. Hjorth (Eds.), New movements in entrepreneurship (pp. 103-124): Elgar.

Grégoire, D. A., Barr, P. S., & Shepherd, D. A. (2010). Cognitive processes of opportunity recognition: The role of structural alignment. Organization Science, 21(2), 413-431.

Grégoire, D. A., & Shepherd, D. A. (2012). Technology-market combinations and the identification of entrepreneurial opportunities: An investigation of the opportunity-individual nexus. Academy of Management Journal, 55(4), 753-785.

Hansen, D. J., Shrader, R., & Monllor, J. (2011). Defragmenting definitions of entrepreneurial opportunity. Journal of Small Business Management, 49(2), 283-304.

Holcombe, R. G. (2003). The origins of entrepreneurial opportunities. The Review of Austrian Economics, 16(1), 25-43.

Klein, P. G. (2008). Opportunity discovery, entrepreneurial action, and economic organization. Strategic Entrepreneurship Journal, 2(3), 175-190.

McMullen, J. S., Plummer, L. A., & Acs, Z. J. (2007). What is an entrepreneurial opportunity? Small Business Economics, 28(4), 273-283.

McMullen, J. S., & Shepherd, D. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur. Academy of management review, 31(1), 132-152.

Mole, K. F., & Mole, M. (2010). Entrepreneurship as the structuration of individual and opportunity: A response using a critical realist perspective:: Comment on Sarason, Dean and Dillard. Journal of Business Venturing, 25(2), 230-237.

Plummer, L. A., Haynie, J. M., & Godesiabois, J. (2007). An essay on the origins of entrepreneurial opportunity. Small Business Economics, 28(4), 363-379.

Sarason, Y., Dean, T., & Dillard, J. F. (2006). Entrepreneurship as the nexus of individual and opportunity: A structuration view. Journal of Business Venturing, 21(3), 286-305.

Sarasvathy, S. D. (2014). The downside of entrepreneurial opportunities. M@n@gement, 17(4), 305-315.

Sarasvathy, S., Dew, N., Velamuri, R., & Venkataraman, S. (2003). Three views of entrepreneurial opportunity. In Z. J. Acs & D. B. Audretsch (Eds.), Handbook of Entrepreneurship Research (pp. 141-160). Dordrecht, NL: Kluwer.

Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4), 448-469.

Shane, S. (2003). A General Theory of Entrepreneurship: The Individual-Opportunity Nexus. Cheltenham, UK: Edward Elgar.

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226.

Short, J. C., Ketchen Jr, D. J., Shook, C. L., & Ireland, R. D. (2010). The concept of “Opportunity” in entrepreneurship research: Past accomplishments and future challenges. Journal of Management, 36(1), 40-65.

Suddaby, R. (2010). Editor’s comments: Construct clarity in theories of management and organization. The Academy of Management Review (AMR), 35(3), 346-357.

Wiklund, J., Davidsson, P., Audretsch, D. B., & Karlsson, C. (2011). The future of entrepreneurship research. Entrepreneurship Theory and Practice, 35(1), 1-9.

Wood, M. S., McKelvie, A., & Haynie, J. M. (2014). Making it personal: Opportunity individuation and the shaping of opportunity beliefs.  Journal of Business Venturing, 29(2); 252-272.

Wood, M. S., & McKinley, W. (2010). The production of entrepreneurial opportunity: a constructivist perspective. Strategic Entrepreneurship Journal, 4: 66-84.

Wood, M. S., & Williams, D. W. (2014). Opportunity evaluation as rule-based decision making. Journal of Management Studies, 51(4): 573-602.

Entry filed under: - Klein -, Conferences, Entrepreneurship, Myths and Realities.

ISNIE is now SIOE ICC Special Issue on Steve Klepper

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