After the Venture: The Reproduction and Destruction of Entrepreneurial Opportunity

• Published date: 01 March 2017
• Author: William Mckinley,Matthew S. Wood
• DOI: http://doi.org/10.1002/sej.1238
• Date: 01 March 2017

AFTER THE VENTURE: THE REPRODUCTION AND

DESTRUCTION OF ENTREPRENEURIAL

OPPORTUNITY

MATTHEW S. WOOD

1

*and WILLIAM MCKINLEY

2

1

Department of Entrepreneurship, Hankamer School of Business, Baylor

University, Waco, Texas, U.S.A.

2

Department of Business Administration, University of Zurich, Zurich,

Switzerland

Research summary: The endogenous formation of entrepreneurial opportunity has

become an important theoretical perspective. Research to date focuses on initial oppor-

tunity creation dynamics leading to venture formation. This excludes the ongoing

enactment of opportunity that takes place after venture founding. We focus on this phe-

nomenon, arguing that opportunities must be continually reproduced through mainte-

nance of consensus among stakeholders about their viability. If consensus fails, the

objectivity of the opportunity is ‘destroyed’in a process we label ‘opportunity de-

objectification.’We identify predictors of opportunity de-objectification and summarize

their effects in propositions suitable for future empirical testing. Implications for future

theory and research are also discussed.

Managerial summary: Previous entrepreneurship research has focused attention on the

process through which opportunity ideas become objectified and perceived as external

facts by entrepreneurs and their stakeholders during venture formation. While such

attention is critical, we argue that venture founding marks the beginning, rather than

the end, of a dynamic process in which the fact-like status of opportunities is main-

tained. If stakeholder consensus about opportunity viability is disrupted, it raises ques-

tions about this factual status and opens up the possibility that the opportunity is a

subjective cognition of the entrepreneur rather than an objective reality. We call this

phenomenon ‘opportunity de-objectification,’and we identify a number of factors that

precipitate it. We also suggest that entrepreneurs may reduce the likelihood of this phe-

nomenon by managing some of the factors that induce it. Copyright © 2016 Strategic

Management Society.

INTRODUCTION

Researchers have devoted considerable scholarly

attention to understanding the origins of entrepre-

neurial opportunities. Early investigations

conceptualized opportunities as exogenous phe-

nomena available for ‘discovery’by enterprising

individuals (Gaglio and Katz, 2001; Kirzner, 1979;

Shane, 2003). However, a number of recent formu-

lations, collectively labeled ‘creation theory’

(Alvarez and Barney, 2007), have distanced them-

selves from the discovery approach by advancing

that opportunities emerge endogenously from

the interplay between entrepreneurs and their

environments (Alvarez and Barney, 2010;

Felin and Zenger, 2009; Foss et al., 2008; Klein,

2008).

1

This conceptualization represents an

Keywords: entrepreneurial opportunity; social constructivist;

enactment; destruction; venture

*Correspondence to: Matthew S. Wood, Department of Entre-

preneurship, Hankamer School of Business, Baylor Univer-

sity, One Bear Place, Waco, TX 76798, U.S.A.

E-mail: ms_wood@baylor.edu

Copyright © 2016 Strategic Management Society

Strategic Entrepreneurship Journal

Strat. Entrepreneurship J., 11:18–35 (2017)

Published online 19 January 2017 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej.1238

important shift, because instead of viewing oppor-

tunity as an ex ante outcropping of economic dis-

continuity, creation theory involves the notion that

opportunities ‘are enacted in an iterative process of

action and reaction’(Alvarez and Barney, 2007:

15). In that way, opportunities are the product of a

construction process that involves stakeholders,

whose collective action builds markets (Alvarez,

Barney, and Anderson, 2013; Mitchell et al., 2012)

and market niches (Luksha, 2008).

While the creation approach to entrepreneurial

opportunities has evolved considerably, many

aspects remain undeveloped. Indeed, recent litera-

ture has drawn attention to conceptual weaknesses

of theories using opportunity enactment as a core

construct (cf. Welter, Mauer, and Wuebker, 2016;

Arend, Sarooghi, and Burkemper, 2015; Ramoglou

and Tsang, 2016). This article responds to these

discussions and strengthens the foundations of the

constructivist perspective on the nature of opportu-

nity by focusing on the period after initial opportu-

nity enactment. In this period, entrepreneurs’

actions not only bring opportunities into existence

and set them in motion, but subsequently maintain

the credibility of opportunities among diverse sets

of stakeholders. This is important because one cru-

cial overlooked aspect of the creation approach

concerns the fact that the construction of opportu-

nity is an ongoing endeavor even after a venture

has been formed and an economic exchange

initiated. In other words, initial opportunity enact-

ment has traditionally been the focus of opportu-

nity creation research; but the ongoing, iterative,

and dynamic processes that sustain enacted oppor-

tunities after venture establishment have been

neglected.

Accordingly, we seek to understand more com-

pletely the maintenance of constructed entrepre-

neurial opportunities, and we are principally

concerned with the circumstances under which

such opportunities may cease to exist as sensed rea-

lities for the entrepreneur. In this investigation, we

draw on the logic in social constructionism

(Gergen, 1985; 1994) and the social construction

of reality (e.g., Berger and Luckmann, 1966;

Raskin, 2002) to build on Alvarez and Barney’s

(2007) notion that opportunities are socially con-

structed enactments. From this base, we then draw

on Wood and McKinley’s (2010) assertion that

opportunity enactments are the product of ‘objecti-

fication’in which opportunity ideas are externa-

lized by the entrepreneur and sensed as objective

realities. However, we uniquely emphasize that

after a venture is established, objectification must

be maintained in the face of feedback from the ven-

ture’s stakeholders. If stakeholder consensus about

opportunity viability is disrupted, it begins to

‘destroy’the objectivity of the opportunity, as the

entrepreneur starts to attribute the opportunity to

his/her internal psychological states rather than an

objective phenomenon. In other words, eroding

consensus raises questions about the existence of

an external reality that transcends the subjectivity

of the entrepreneur.

This is a process we label ‘opportunity de-

objectification,’and we posit that factors that pro-

duce dissensus about opportunity viability can initi-

ate opportunity de-objectification. Such factors

include the decline of a venture (Whetten, 1987), a

rise in the death rates of similar ventures, or a

decline in the birth rates of similar ventures. We

develop propositions about the effects of these fac-

tors on opportunity de-objectification, as mediated

by erosion of consensus about opportunity viabil-

ity. We also discuss methods by which these pro-

positions could be tested, in order to stimulate

future empirical research based on our theory.

It should be noted that opportunity de-

objectification is not experienced by the entrepre-

neur as a mistake in detection. Rather, opportunity

de-objectification is a growing awareness of the

subjectivity of sense data about the opportunity.

This can be disconcerting for the entrepreneur,

because the target the entrepreneur has been striv-

ing for is no longer perceived as existing outside

the entrepreneur’s mind. This, in turn, raises ques-

tions about the mission of the venture. In extreme

cases, the outcome of opportunity de-objectification

may be ‘cosmology episodes’similar to those dis-

cussed by Weick (1993) in his paper about smoke-

jumpers. Because of the disruptive cognitive

effects of opportunity de-objectification, we feel it

is an interesting focus for study.

The major contributions of this article are, there-

fore, the introduction and clarification of the

concepts of opportunity propagation and opportu-

nity de-objectification, with a central focus

1

For a thorough discussion of the ontological and epistemo-

logical differences between the creation and discovery per-

spectives, see the debate in the January 2013 issue of

Academy of Management Review.

After the Venture 19

Copyright © 2016 Strategic Management Society Strat. Entrepreneurship J., 11:18–35 (2017)

DOI: 10.1002/sej