- Email: [email protected]
Continued misgivings: A response to Davidsson on dismantling the opportunity construct
Journal of Business Venturing Insights 7 (2017) 77–81
Contents lists available at ScienceDirect
Journal of Business Venturing Insights journal homepage: www.elsevier.com/locate/jbvi
Continued misgivings: A response to Davidsson on dismantling the opportunity construct
MARK
Matthew S. Wood Department of Entrepreneurship, Hankamer School of Business, Baylor University, One Bear Place, Waco, TX 76798, United States
1. Introduction In a recent article (Wood, 2017; this journal) I advanced that the concept of entrepreneurial opportunity is an umbrella construct that encompasses a range of dynamics that lead up to and include new venture formation. Underpinned by a robust stream of literature on construct development (Hirsch and Levin, 1999; McKinley and Mone, 1998), I argued umbrella constructs exhibit unique advantages over more narrowly-focused, lower-order constructs because they are “summative units” (Dubin, 1978) capable of representing the entirety of a complex phenomenon. From this perspective, I articulated misgivings about the movement to dismantle the opportunity construct by replacing it with alternative concepts or to disband its use entirely. These misgivings centered on failures by prior scholarship to consider that definitional fragmentation results from process clarity issues, that the construct corresponds to language entrepreneurs use in practice and concerns that scholars who research under the opportunity label are likely to increasingly face challenges from the validity police. Davidsson (2017a; this journal) provided a rejoinder that takes issue with these misgivings and as one would expect from a leading scholar in the field, has thoughtfully articulated his reasons why arguments in Wood (2017) do not provide a compelling case to retain the opportunity construct. While I admire Davidsson's genuine desire to move the field forward and respect his counterpoints, I continue to believe that his desired multi-construct replacement approach (see Davidsson, 2015) will prove more problematic in conceptual and empirical research than the shortcomings identified with use of the opportunity concept as an umbrella construct, one that “embodies an overarching set of paradigmatic understandings in a way that tells the story of the phenomenon” (Wood, 2017: 24). It is from this platform that I provide a response to Davidsson's rejoinder by focusing upon issues of process, validity police and practical relevance serving as key points of discussion. 2. Response to Davidsson's reflections 2.1. Issues of process In his reflections, Davidsson touched on three of my misgivings over dismantling the opportunity construct, but the bulk of his effort centered on what I called “unresolved process clarity” (Wood, 2017: 22). Specifically, Davidsson refutes the argument in Wood (2017) that the definitional diversity that surrounds the opportunity construct (i.e., lack of clarity) is at least in part, a function of the ill-defined process underpinning venture creation as opposed to an inherent characteristic of the construct. The genesis of my argument in the original article was that it is unclear how the multi-prong replacement concepts (Davidsson, 2015) of new venture idea (NVI), external enablers (EE) and opportunity confidence (OC) fit into the fabric of established process models of entrepreneurship, such as Shane and Venkataraman's (2000) approach that delineates opportunity identification, evaluation and exploitation as distinct phases in the process (see Wood, 2017, Fig. 1 for additional examples). As such, principle challenges for scholars who support dismantling the opportunity construct in favor of multiple lower order concepts are (1) reconciling replacement constructs with extant process models of entrepreneurship and (2) developing variables used to operationalize them accordingly. It is
E-mail address: [email protected]. http://dx.doi.org/10.1016/j.jbvi.2017.04.001 Received 13 April 2017; Accepted 19 April 2017 2352-6734/ © 2017 Elsevier Inc. All rights reserved.
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
Table 1 Reconciling multi-concept replacements with existing process models of entrepreneurship. Approach
Construct (s)
Definition (s)
Umbrella construct
Entrepreneurial opportunity
Introduction of new products, services, or ways of doing business to better serve the needs of consumers in one or more markets (Wood et al., 2014: 254). Contains the possibility for economic gain as well as the possibility for financial loss for the entrepreneur (Lee and Venkataraman, 2006: 110).
Existence is unproven in the present (Dimov, 2011). Yet, ex-post summative nature engenders coherence between range of concepts and dynamics that unfold in each phase and encapsulates the entirety of the process.
Multi-construct replacement
New venture idea
An “imagined future venture”; i.e., an imaginary combination of product/ service offering, markets, and means of bringing the offering into existence (Davidsson, 2015: 683). Single, distinct, external circumstance, which has the potential of playing an essential role in eliciting and/or enabling a variety of entrepreneurial endeavors by several (potential) actors (Davidsson, 2015: 683). The result of an actor's evaluation of a stimulus (External Enabler or New Venture Idea) as a basis for the creation of new economic activity (Davidsson, 2015: 683).
● Identification: NVI required to start the process and thus appears to be the same as dynamics in opportunity identification. Yet, EE can trigger NVI so is EE the start of the process? If so, how is this different than “alertness” that has been central to identification research? ● Evaluation: NVI is needed for evaluation with OC as the outcome, but EE can moderate OC and in some cases trigger change in NVI. Is the target of OC an NVI, EE or both? Does a change in NVI take us back to the start of the process? How is OC different than “opportunity beliefs or attractiveness” that permeate literature on evaluation? Is OC essentially a redefinition of opportunity evaluation phase? ● Exploitation: Requires presence of all three constructs to explain dynamics, but constructs act on each other rendering cause and effect process perspective untenable. Further, if NVI and OC “refer to the venture creation process” (Davidsson, 2017a: 66) how can they explain post venture creation in the exploitation phase?
External enabler
Opportunity confidence
Process
Conundrum (s)
my position that, as researchers attempt to do so, conceptual and empirical conundrums emerge with such replacement concepts. Table 1 illustrates why. First, as researchers map replacement constructs to phases in existing process models, they are confronted with a lack clarity in terms of when and how each replacement construct operates in the process. That is, intuitively an NVI is required for what we currently call opportunity evaluation but an EE can either trigger an NVI (antecedent to evaluation) or influence opportunity confidence (outcome of evaluation). The exploitation phase proves even more problematic because one will need to use NVI, EE and OC together to explain what was once encapsulated by “opportunity” as a single umbrella construct. In theory, this is a viable path, but note that Davidsson's three replacement constructs act on each other as illustrated in Fig. 1 and Fig. 2 in Davidsson's (2015) Journal of Business Venturing article. This creates endogeneity that makes it all but impossible to untangle cause and effect via a process lens. Davidsson (2017a: 66) is right that under his approach, “changes that occur during the process are a matter of changing variable values” but because the value of one influences the value of another, changes compound as one moves further along in the process. Untangling the relationships between these variables will be extremely difficult and thus does not represent an improvement over the opportunity as an umbrella construct approach. Second, there is a high degree of overlap between definitions of replacement concepts (Davidsson, 2015) and those of the phases 78
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
in the process or the operationalization of them. Opportunity evaluation, for example, has been defined as “assessing the attractiveness (for me or my firm) of introducing new goods, services, or business models to one or more markets” (Williams and Wood, 2015: 219) and has been operationalized using assessments of attractiveness or opportunity beliefs. Considering these alongside the proposed replacement constructs it easy to see how the concept of opportunity confidence, for example, is indicative of dynamics previously conceptualized as opportunity evaluation and operationalized as opportunity beliefs. Overlap along these lines creates conundrums when reconciling replacement concepts with literature using the phase model approach as outlined in Table 1. These conundrums may be resolvable, but at present, serve as a source of continued misgiving over the notion of dismantling the opportunity construct in favor of replacement concepts which seemingly raise even more complex challenges for research. Together, these two points expand on the process clarity problem identified in the original article, but there is a deeper issue here. In his rejoinder, Davidsson largely ignored my points about mapping onto existing process models in favor of supplanting my discussion with his own on how changes in the process over time render the opportunity construct untenable from a definitional standpoint. This is a fundamentally different conversation and uses the term “process” in a very different way than what was advanced in Wood (2017). Having said this, I do agree with Davidsson that changes in the process [or what Wood et al. (2012) call “inflection points”] present challenges for proper use of the opportunity construct. However, I firmly disagree that such changes invalidate opportunity as an umbrella construct capable of representing the dynamics identified in Davidsson (2017a: 66, Table 1) and point out that such claims are based on “selective logic” that ignores key aspects of the opportunity literature. Let me explain. A close examination of Table 1 in Davidsson (2017a: 66) reveals that one of the approaches outlined involves basing the opportunity definition on “focal agent's perception expressed in word or action.”1 Using this basis for definition, Davidsson claims there are two inflection points (i.e., situations indicative of process changes) where the definition does not hold: 1) “focal agent's evaluation turns negative” and 2) “start-up attempt terminates as a failure.” This, however, overlooks significant developments (some recent) in our understanding of the opportunity concept that falsify such claims. First, the notion that when a focal agent's evaluation turns negative (i.e., loses faith) or when the endeavor fails it invalidates the opportunity concept is misplaced because it overlooks the role of actor perspective (see McMullen and Shepherd, 2006; Wood et al., 2014). It is well established in the literature that one could discern a new introduction under consideration is not worth pursuing for me personally (1st person perspective) but could be for someone else (3rd person perspective). This means an actor may lose faith in the perceived opportunity for “me” but not for hypothetical others. Here, the actor still believes that an opportunity exists (Shane and Venkataraman, 2000) or could be enacted (Wood and McKinley, 2010) by someone with the right motivation, skills, resources and so on. Under this approach there is no need to change the definition or relabel the construct as Davidsson claims, because the potential to introduce the envisioned new good or service is believed to remain, even though the focal actor does not have enough faith to pursue it. Second, recent theory by Ramoglou and Tsang (2016) advances when one loses faith in a potential new introduction (evaluation turns negative) or the pursuit of a new introduction ceases after venture launch (terminates as failure), the focal actor may simply consider it a “non-opportunity.” A non-opportunity recognizes that entrepreneurship requires complicit cooperation of others to succeed (McMullen and Dimov, 2013) and while individual action can influence this there are “limits to what an entrepreneur can achieve” (Ramoglou and Tsang, 2017: in press). If the entrepreneur understands this, and losses faith in pursuing a new introduction, then he/she simply considers it a non-opportunity – a belief that there is no chance for success. Add to this Wood and McKinley (2017: 24) recently addressed the post venture launch period where the losing faith dynamic is indicative of “opportunity de-objectification” where the entity the entrepreneur has been pursuing “becomes increasingly subjective, and the entrepreneur becomes doubtful that the opportunity exists as an external reality outside his/her mind.” While Davidsson is skeptical of the notion of non-opportunity (Davidsson, 2017b), and may or may not have concerns over opportunity de-objectification, it does not change the reality that recent scholarship addresses the very issues he claims invalidate the use of the construct throughout the process. This necessitates a revised assessment of the stability of the opportunity construct in so far as the opportunity definition used is based on focal agent perceptions and this is provided in Table 2. 2.2. Validity police A second issue of reflection on Wood (2017) involved expressed concerns over how a push toward dismantling the opportunity construct might manifest in journal review process. Davidsson took issue with my point that advocating for dismantling the opportunity construct will result in new sources of uncertainty in the journal review process as authors confront the ‘validity police’ – those who feel the opportunity construct is untenable as a focus of scholarly inquiry. Davidsson (2017a, p.65) countered this with, “it is neither a bad nor a novel idea that editors and reviewers demand that researchers define their central concepts and then use them accordingly.” I absolutely agree. I never argued that researchers should not define their constructs or be held accountable for internal consistency. Rather, I articulate that history demonstrates a new approach can be “evangelized” (Astley, 1985) such that it manifests in the journal review process as reasons to reject manuscripts. This is problematic when the new approach is based on description of phenomenological domains that can be explored with replacement concepts, rather than empirical validation of them as superior representations. Despite challenges with the opportunity construct, there is a solid body of research underpinning it. What we know is that the ex-post nature of the opportunity concept allows 1 This is the approach I consider “proper use of opportunity construct” as reflected in my conceptual and empirical contributions (e.g., Wood and Williams, 2014; Wood and McKinley, 2010, 2017) and thus the one I focus on in my response.
79
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
Table 2 Process changes, opportunity definition based on agent perception, and revised assessment of the stability of opportunity construct. Davidsson claim (2017)
Revised assessment
Basis for definition Process change Focal agent's evaluation turns negative
Opportunity definition based on focal agent's perception expressed in word or action The entity is no longer an “opportunity” OR the definition of opportunity needs to change
External circumstances change so the entity no longer meets researcher-specified “opportunity” criteria The contents of the idea changes so it no longer meets researcher-specified criteria Relevant stakeholders gain/lose faith that what the entrepreneur is pursuing is an “opportunity” The start-up attempt terminates as a failure
The entity remains an opportunity and the definition of opportunity need not change
Opportunity definition based on focal agent's perception expressed in word or action Entity is classified in the mind of the entrepreneur as: 1. Not an opportunity for ‘me’ but remains for someone in general (McMullen and Shepherd, 2006). 2. A “non-opportunity” (Ramoglou and Tsang, 2015, 2017) Definition of opportunity need not change No revision needed
The entity remains an opportunity and the definition of opportunity need not change The entity remains an opportunity and the definition of opportunity need not change
No revision needed
The entity is no longer an “opportunity” OR the definition of opportunity needs to change
Entity is classified in the mind of the entrepreneur as: 1. Not an opportunity for ‘me’ but remains for someone in general (McMullen and Shepherd, 2006). 2. A “non-opportunity” (Ramoglou and Tsang, 2015) or “de-objectified opportunity” (Wood and McKinley, 2017). Definition of opportunity need not change No revision needed. Though Wood and McKinley (2017) consider a venture a mechanism for opportunity propagation such that objectified opportunity remains the target for action. Change in the focal agent's evaluation do not make it impossible to use the same definition throughout the process.
The emerging venture becomes a Successfully launched business
The entity is no longer an opportunity (but an established business). The definition of opportunity need not change
Conclusion
Change in the focal agent's evaluation may make it impossible to use the same definition throughout the process
No revision needed
it to encapsulate a host of diverse relationships as the process unfolds (McMullen and Dimov, 2013) and has led to significant advances in our understanding of entrepreneurship. Hence, I caution reviewers and editors against validity policing appropriate and rigorous use of the opportunity construct until there is robust empirical evidence to support Davidsson's claim that the approach he prefers is superior.2
2.3. Language and practical relevance A final point of reflection focused on my assertion that opportunity as an umbrella construct has an advantage over potential replacements because it reflects the language entrepreneurs use in the field. Davidsson argued that we should not be too concerned that replacement constructs of new venture ideas, external enablers and opportunity confidence (Davidsson, 2015) do not sync with the language entrepreneurs use to describe their activities because scholars are tasked with moving to a deeper level of inquiry where the language of the natives is likely insufficient. While I agree with Davidsson that practitioners do not provide researchers with all the language needed, his point dismisses the fact that the academy is continually up in arms about how to make research more relevant to practice (Rynes et al., 2001; Van, 2007) and that many onlookers feel that business schools have lost their way because so little research is “grounded in actual business practices” (Bennis and O’Toole, 2005). So, when Davidsson waves off Wood's (2017: 23) point that entrepreneurs regularly describe their activities “as sensing and pursuing opportunities” he is essentially advocating that we enact our own irrelevance. That is, without the shared understanding that common language provides (Weick et al., 2005), knowledge generated from scholarly research is viewed by practitioners as overly-complex, tacit knowledge confined to the ivory tower. Entrepreneurs use the opportunity concept with ease and effect. They know that success is uncertain and that the term “opportunity” reflects “conditions making possible the outcomes that motivate entrepreneurial efforts” (Ramoglou and Tsang, 2017: in-press). As such, it is inconceivable that moving away from the language of natives would improve the accuracy of phenomenological representation in scholarly research, not to mention be at odds with what practitioners’ value. While Davidsson (2017, p.65) is correct that critics have not “suggested that opportunity be abolished from our conversations with students and practitioners,” it is logical to conclude that removing the concept from our research will serve to undermine the substance and meaning of such conversations with these audiences.
2 Davidsson (2015) is right in his assessment that some have misused the opportunity construct by either not defining it at all or by failing to operationalize the construct consistent with the definition provided. In no way am I suggesting that reviewers and editors ignore such deficiencies.
80
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
3. Final thoughts As I noted in my original article, great advances in scientific discovery do not come from changing the conversation when the going gets tough. While Davidsson's approach is not an easy path by any stretch, it does represent an effort to change the focus and therein potentially pull attention away from ongoing advances in developing the opportunity concept. Having said this, Davidsson has been a leader in the field for many years because of his keen ability to provide deeply informed and well-reasoned perspectives on a range of issues. In this regard, I appreciate his willingness to provide his reflections on the “misgivings” article and I look forward to continuing the conversation with him, and many others, as we collectively strive to move the field forward in a way that maximizes scholarly impact. Acknowledgements I am grateful for the time and talent devoted by David Williams, Steve Bradley and David Scheaf to providing valuable feedback and insightful ideas that greatly enhanced the quality of this article. References Astley, W.G., 1985. Administrative science as socially constructed truth. Adm. Sci. Q. 497–513. Bennis, W.G., O’Toole, J., 2005. How business schools lost their way. Harv. Bus. Rev. 83 (5), 96–104. Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: a re-conceptualization. J. Bus. Ventur. 30 (5), 674–695. Davidsson, P., 2017a. Reflections on misgivings about “dismantling” the opportunity construct. J. Bus. Ventur. Insights 7, 65–67. Davidsson, P., 2017b. Entrepreneurial opportunities as propensities: Do Ramoglou & Tsang move the field forward? J. Bus. Ventur. Insights. http://dx.doi.org/10. 1016/j.jbvi.2016.02.002i. Dimov, D., 2011. Grappling with the unbearable elusiveness of entrepreneurial opportunities. Entrep. Theory Pract. 35 (1), 57–81. Dubin, R., 1978. Theory Building. Free Press, New York. Hirsch, P.M., Levin, D.Z., 1999. Umbrella advocates versus validity police: a life-cycle model. Organ. Sci. 10 (2), 199–212. Lee, J.H., Venkataraman, S., 2006. Aspirations, market offerings, and the pursuit of entrepreneurial opportunities. J. Bus. Ventur. 21 (1), 107–123. McKinley, W., Mone, M.A., 1998. The re-construction of organization studies: wrestling with incommensurability. Organization 5 (2), 169–189. McMullen, J.S., Dimov, D., 2013. Time and the entrepreneurial journey: the problems and promise of studying entrepreneurship as a process. J. Manag. Stud. 50 (8), 1481–1512. Ramoglou, S., Tsang, E., 2016. A realist perspective of entrepreneurship: opportunities as propensities. Acad. Manag. Rev. 41 (3), 410–434. Ramoglou, S., Tsang, E., 2017. In defense of common sense in entrepreneurship theory: beyond philosophical extremities and linguistic abuses. Acad. Manag. Rev. Rynes, S., Bartunek, J., Daft, R., 2001. Across the great divide: knowledge creation and transfer between practitioners and academics. Acad. Manag. J. 44, 340–355. Shane, S., Venkataraman, S., 2000. The promise of entrepreneurship as a field of research. Acad. Manag. Rev. 25 (1), 217–226. Van, de Ven, A., 2007. Engaged Sholarship: A Guide for Organizational and Social Research. Oxford University Press, Oxford. Weick, K.E., Sutcliffe, K.M., Obstfeld, D., 2005. Organizing and the process of sensemaking. Organ. Sci. 16 (4), 409–421. Williams, D.W., Wood, M.S., 2015. Rule-based reasoning for understanding opportunity evaluation. Acad. Manag. Perspect. 29 (2), 218–236. Wood, M., Williams, D., Grégoire, D., 2012. The road to riches? An integrated model of cognitive processes underpinning entrepreneurial action. In: Corbett, A., Katz, J. (Eds.), Entrepreneurial Action: Advances in Entrepreneurship, Firm Emergence and Growth 14. Emerald, Bingley, pp. 207–252. Wood, M., McKelvie, A., Haynie, J.M., 2014. Making it personal: opportunity individuation and the shaping of opportunity beliefs. J. Bus. Ventur. 29 (2), 252–272. Wood, M.S., 2017. Misgivings about dismantling the opportunity construct. J. Bus. Ventur. Insights 7, 21–25. Wood, M.S., McKinley, W., 2010. The production of entrepreneurial opportunity: a constructivist perspective. Strateg. Entrep. J. 4, 66–84. Wood, M.S., Williams, D.W., 2014. Opportunity evaluation as rule‐based decision making. J. Manag. Stud. 51 (4), 573–602. Wood, M.S., McKinley, W., 2017. After the venture: the reproduction and destruction of entrepreneurial opportunity. Strateg. Entrep. J. 11 (1), 18–35.
81
Contents lists available at ScienceDirect
Journal of Business Venturing Insights journal homepage: www.elsevier.com/locate/jbvi
Continued misgivings: A response to Davidsson on dismantling the opportunity construct
MARK
Matthew S. Wood Department of Entrepreneurship, Hankamer School of Business, Baylor University, One Bear Place, Waco, TX 76798, United States
1. Introduction In a recent article (Wood, 2017; this journal) I advanced that the concept of entrepreneurial opportunity is an umbrella construct that encompasses a range of dynamics that lead up to and include new venture formation. Underpinned by a robust stream of literature on construct development (Hirsch and Levin, 1999; McKinley and Mone, 1998), I argued umbrella constructs exhibit unique advantages over more narrowly-focused, lower-order constructs because they are “summative units” (Dubin, 1978) capable of representing the entirety of a complex phenomenon. From this perspective, I articulated misgivings about the movement to dismantle the opportunity construct by replacing it with alternative concepts or to disband its use entirely. These misgivings centered on failures by prior scholarship to consider that definitional fragmentation results from process clarity issues, that the construct corresponds to language entrepreneurs use in practice and concerns that scholars who research under the opportunity label are likely to increasingly face challenges from the validity police. Davidsson (2017a; this journal) provided a rejoinder that takes issue with these misgivings and as one would expect from a leading scholar in the field, has thoughtfully articulated his reasons why arguments in Wood (2017) do not provide a compelling case to retain the opportunity construct. While I admire Davidsson's genuine desire to move the field forward and respect his counterpoints, I continue to believe that his desired multi-construct replacement approach (see Davidsson, 2015) will prove more problematic in conceptual and empirical research than the shortcomings identified with use of the opportunity concept as an umbrella construct, one that “embodies an overarching set of paradigmatic understandings in a way that tells the story of the phenomenon” (Wood, 2017: 24). It is from this platform that I provide a response to Davidsson's rejoinder by focusing upon issues of process, validity police and practical relevance serving as key points of discussion. 2. Response to Davidsson's reflections 2.1. Issues of process In his reflections, Davidsson touched on three of my misgivings over dismantling the opportunity construct, but the bulk of his effort centered on what I called “unresolved process clarity” (Wood, 2017: 22). Specifically, Davidsson refutes the argument in Wood (2017) that the definitional diversity that surrounds the opportunity construct (i.e., lack of clarity) is at least in part, a function of the ill-defined process underpinning venture creation as opposed to an inherent characteristic of the construct. The genesis of my argument in the original article was that it is unclear how the multi-prong replacement concepts (Davidsson, 2015) of new venture idea (NVI), external enablers (EE) and opportunity confidence (OC) fit into the fabric of established process models of entrepreneurship, such as Shane and Venkataraman's (2000) approach that delineates opportunity identification, evaluation and exploitation as distinct phases in the process (see Wood, 2017, Fig. 1 for additional examples). As such, principle challenges for scholars who support dismantling the opportunity construct in favor of multiple lower order concepts are (1) reconciling replacement constructs with extant process models of entrepreneurship and (2) developing variables used to operationalize them accordingly. It is
E-mail address: [email protected]. http://dx.doi.org/10.1016/j.jbvi.2017.04.001 Received 13 April 2017; Accepted 19 April 2017 2352-6734/ © 2017 Elsevier Inc. All rights reserved.
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
Table 1 Reconciling multi-concept replacements with existing process models of entrepreneurship. Approach
Construct (s)
Definition (s)
Umbrella construct
Entrepreneurial opportunity
Introduction of new products, services, or ways of doing business to better serve the needs of consumers in one or more markets (Wood et al., 2014: 254). Contains the possibility for economic gain as well as the possibility for financial loss for the entrepreneur (Lee and Venkataraman, 2006: 110).
Existence is unproven in the present (Dimov, 2011). Yet, ex-post summative nature engenders coherence between range of concepts and dynamics that unfold in each phase and encapsulates the entirety of the process.
Multi-construct replacement
New venture idea
An “imagined future venture”; i.e., an imaginary combination of product/ service offering, markets, and means of bringing the offering into existence (Davidsson, 2015: 683). Single, distinct, external circumstance, which has the potential of playing an essential role in eliciting and/or enabling a variety of entrepreneurial endeavors by several (potential) actors (Davidsson, 2015: 683). The result of an actor's evaluation of a stimulus (External Enabler or New Venture Idea) as a basis for the creation of new economic activity (Davidsson, 2015: 683).
● Identification: NVI required to start the process and thus appears to be the same as dynamics in opportunity identification. Yet, EE can trigger NVI so is EE the start of the process? If so, how is this different than “alertness” that has been central to identification research? ● Evaluation: NVI is needed for evaluation with OC as the outcome, but EE can moderate OC and in some cases trigger change in NVI. Is the target of OC an NVI, EE or both? Does a change in NVI take us back to the start of the process? How is OC different than “opportunity beliefs or attractiveness” that permeate literature on evaluation? Is OC essentially a redefinition of opportunity evaluation phase? ● Exploitation: Requires presence of all three constructs to explain dynamics, but constructs act on each other rendering cause and effect process perspective untenable. Further, if NVI and OC “refer to the venture creation process” (Davidsson, 2017a: 66) how can they explain post venture creation in the exploitation phase?
External enabler
Opportunity confidence
Process
Conundrum (s)
my position that, as researchers attempt to do so, conceptual and empirical conundrums emerge with such replacement concepts. Table 1 illustrates why. First, as researchers map replacement constructs to phases in existing process models, they are confronted with a lack clarity in terms of when and how each replacement construct operates in the process. That is, intuitively an NVI is required for what we currently call opportunity evaluation but an EE can either trigger an NVI (antecedent to evaluation) or influence opportunity confidence (outcome of evaluation). The exploitation phase proves even more problematic because one will need to use NVI, EE and OC together to explain what was once encapsulated by “opportunity” as a single umbrella construct. In theory, this is a viable path, but note that Davidsson's three replacement constructs act on each other as illustrated in Fig. 1 and Fig. 2 in Davidsson's (2015) Journal of Business Venturing article. This creates endogeneity that makes it all but impossible to untangle cause and effect via a process lens. Davidsson (2017a: 66) is right that under his approach, “changes that occur during the process are a matter of changing variable values” but because the value of one influences the value of another, changes compound as one moves further along in the process. Untangling the relationships between these variables will be extremely difficult and thus does not represent an improvement over the opportunity as an umbrella construct approach. Second, there is a high degree of overlap between definitions of replacement concepts (Davidsson, 2015) and those of the phases 78
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
in the process or the operationalization of them. Opportunity evaluation, for example, has been defined as “assessing the attractiveness (for me or my firm) of introducing new goods, services, or business models to one or more markets” (Williams and Wood, 2015: 219) and has been operationalized using assessments of attractiveness or opportunity beliefs. Considering these alongside the proposed replacement constructs it easy to see how the concept of opportunity confidence, for example, is indicative of dynamics previously conceptualized as opportunity evaluation and operationalized as opportunity beliefs. Overlap along these lines creates conundrums when reconciling replacement concepts with literature using the phase model approach as outlined in Table 1. These conundrums may be resolvable, but at present, serve as a source of continued misgiving over the notion of dismantling the opportunity construct in favor of replacement concepts which seemingly raise even more complex challenges for research. Together, these two points expand on the process clarity problem identified in the original article, but there is a deeper issue here. In his rejoinder, Davidsson largely ignored my points about mapping onto existing process models in favor of supplanting my discussion with his own on how changes in the process over time render the opportunity construct untenable from a definitional standpoint. This is a fundamentally different conversation and uses the term “process” in a very different way than what was advanced in Wood (2017). Having said this, I do agree with Davidsson that changes in the process [or what Wood et al. (2012) call “inflection points”] present challenges for proper use of the opportunity construct. However, I firmly disagree that such changes invalidate opportunity as an umbrella construct capable of representing the dynamics identified in Davidsson (2017a: 66, Table 1) and point out that such claims are based on “selective logic” that ignores key aspects of the opportunity literature. Let me explain. A close examination of Table 1 in Davidsson (2017a: 66) reveals that one of the approaches outlined involves basing the opportunity definition on “focal agent's perception expressed in word or action.”1 Using this basis for definition, Davidsson claims there are two inflection points (i.e., situations indicative of process changes) where the definition does not hold: 1) “focal agent's evaluation turns negative” and 2) “start-up attempt terminates as a failure.” This, however, overlooks significant developments (some recent) in our understanding of the opportunity concept that falsify such claims. First, the notion that when a focal agent's evaluation turns negative (i.e., loses faith) or when the endeavor fails it invalidates the opportunity concept is misplaced because it overlooks the role of actor perspective (see McMullen and Shepherd, 2006; Wood et al., 2014). It is well established in the literature that one could discern a new introduction under consideration is not worth pursuing for me personally (1st person perspective) but could be for someone else (3rd person perspective). This means an actor may lose faith in the perceived opportunity for “me” but not for hypothetical others. Here, the actor still believes that an opportunity exists (Shane and Venkataraman, 2000) or could be enacted (Wood and McKinley, 2010) by someone with the right motivation, skills, resources and so on. Under this approach there is no need to change the definition or relabel the construct as Davidsson claims, because the potential to introduce the envisioned new good or service is believed to remain, even though the focal actor does not have enough faith to pursue it. Second, recent theory by Ramoglou and Tsang (2016) advances when one loses faith in a potential new introduction (evaluation turns negative) or the pursuit of a new introduction ceases after venture launch (terminates as failure), the focal actor may simply consider it a “non-opportunity.” A non-opportunity recognizes that entrepreneurship requires complicit cooperation of others to succeed (McMullen and Dimov, 2013) and while individual action can influence this there are “limits to what an entrepreneur can achieve” (Ramoglou and Tsang, 2017: in press). If the entrepreneur understands this, and losses faith in pursuing a new introduction, then he/she simply considers it a non-opportunity – a belief that there is no chance for success. Add to this Wood and McKinley (2017: 24) recently addressed the post venture launch period where the losing faith dynamic is indicative of “opportunity de-objectification” where the entity the entrepreneur has been pursuing “becomes increasingly subjective, and the entrepreneur becomes doubtful that the opportunity exists as an external reality outside his/her mind.” While Davidsson is skeptical of the notion of non-opportunity (Davidsson, 2017b), and may or may not have concerns over opportunity de-objectification, it does not change the reality that recent scholarship addresses the very issues he claims invalidate the use of the construct throughout the process. This necessitates a revised assessment of the stability of the opportunity construct in so far as the opportunity definition used is based on focal agent perceptions and this is provided in Table 2. 2.2. Validity police A second issue of reflection on Wood (2017) involved expressed concerns over how a push toward dismantling the opportunity construct might manifest in journal review process. Davidsson took issue with my point that advocating for dismantling the opportunity construct will result in new sources of uncertainty in the journal review process as authors confront the ‘validity police’ – those who feel the opportunity construct is untenable as a focus of scholarly inquiry. Davidsson (2017a, p.65) countered this with, “it is neither a bad nor a novel idea that editors and reviewers demand that researchers define their central concepts and then use them accordingly.” I absolutely agree. I never argued that researchers should not define their constructs or be held accountable for internal consistency. Rather, I articulate that history demonstrates a new approach can be “evangelized” (Astley, 1985) such that it manifests in the journal review process as reasons to reject manuscripts. This is problematic when the new approach is based on description of phenomenological domains that can be explored with replacement concepts, rather than empirical validation of them as superior representations. Despite challenges with the opportunity construct, there is a solid body of research underpinning it. What we know is that the ex-post nature of the opportunity concept allows 1 This is the approach I consider “proper use of opportunity construct” as reflected in my conceptual and empirical contributions (e.g., Wood and Williams, 2014; Wood and McKinley, 2010, 2017) and thus the one I focus on in my response.
79
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
Table 2 Process changes, opportunity definition based on agent perception, and revised assessment of the stability of opportunity construct. Davidsson claim (2017)
Revised assessment
Basis for definition Process change Focal agent's evaluation turns negative
Opportunity definition based on focal agent's perception expressed in word or action The entity is no longer an “opportunity” OR the definition of opportunity needs to change
External circumstances change so the entity no longer meets researcher-specified “opportunity” criteria The contents of the idea changes so it no longer meets researcher-specified criteria Relevant stakeholders gain/lose faith that what the entrepreneur is pursuing is an “opportunity” The start-up attempt terminates as a failure
The entity remains an opportunity and the definition of opportunity need not change
Opportunity definition based on focal agent's perception expressed in word or action Entity is classified in the mind of the entrepreneur as: 1. Not an opportunity for ‘me’ but remains for someone in general (McMullen and Shepherd, 2006). 2. A “non-opportunity” (Ramoglou and Tsang, 2015, 2017) Definition of opportunity need not change No revision needed
The entity remains an opportunity and the definition of opportunity need not change The entity remains an opportunity and the definition of opportunity need not change
No revision needed
The entity is no longer an “opportunity” OR the definition of opportunity needs to change
Entity is classified in the mind of the entrepreneur as: 1. Not an opportunity for ‘me’ but remains for someone in general (McMullen and Shepherd, 2006). 2. A “non-opportunity” (Ramoglou and Tsang, 2015) or “de-objectified opportunity” (Wood and McKinley, 2017). Definition of opportunity need not change No revision needed. Though Wood and McKinley (2017) consider a venture a mechanism for opportunity propagation such that objectified opportunity remains the target for action. Change in the focal agent's evaluation do not make it impossible to use the same definition throughout the process.
The emerging venture becomes a Successfully launched business
The entity is no longer an opportunity (but an established business). The definition of opportunity need not change
Conclusion
Change in the focal agent's evaluation may make it impossible to use the same definition throughout the process
No revision needed
it to encapsulate a host of diverse relationships as the process unfolds (McMullen and Dimov, 2013) and has led to significant advances in our understanding of entrepreneurship. Hence, I caution reviewers and editors against validity policing appropriate and rigorous use of the opportunity construct until there is robust empirical evidence to support Davidsson's claim that the approach he prefers is superior.2
2.3. Language and practical relevance A final point of reflection focused on my assertion that opportunity as an umbrella construct has an advantage over potential replacements because it reflects the language entrepreneurs use in the field. Davidsson argued that we should not be too concerned that replacement constructs of new venture ideas, external enablers and opportunity confidence (Davidsson, 2015) do not sync with the language entrepreneurs use to describe their activities because scholars are tasked with moving to a deeper level of inquiry where the language of the natives is likely insufficient. While I agree with Davidsson that practitioners do not provide researchers with all the language needed, his point dismisses the fact that the academy is continually up in arms about how to make research more relevant to practice (Rynes et al., 2001; Van, 2007) and that many onlookers feel that business schools have lost their way because so little research is “grounded in actual business practices” (Bennis and O’Toole, 2005). So, when Davidsson waves off Wood's (2017: 23) point that entrepreneurs regularly describe their activities “as sensing and pursuing opportunities” he is essentially advocating that we enact our own irrelevance. That is, without the shared understanding that common language provides (Weick et al., 2005), knowledge generated from scholarly research is viewed by practitioners as overly-complex, tacit knowledge confined to the ivory tower. Entrepreneurs use the opportunity concept with ease and effect. They know that success is uncertain and that the term “opportunity” reflects “conditions making possible the outcomes that motivate entrepreneurial efforts” (Ramoglou and Tsang, 2017: in-press). As such, it is inconceivable that moving away from the language of natives would improve the accuracy of phenomenological representation in scholarly research, not to mention be at odds with what practitioners’ value. While Davidsson (2017, p.65) is correct that critics have not “suggested that opportunity be abolished from our conversations with students and practitioners,” it is logical to conclude that removing the concept from our research will serve to undermine the substance and meaning of such conversations with these audiences.
2 Davidsson (2015) is right in his assessment that some have misused the opportunity construct by either not defining it at all or by failing to operationalize the construct consistent with the definition provided. In no way am I suggesting that reviewers and editors ignore such deficiencies.
80
Journal of Business Venturing Insights 7 (2017) 77–81
M.S. Wood
3. Final thoughts As I noted in my original article, great advances in scientific discovery do not come from changing the conversation when the going gets tough. While Davidsson's approach is not an easy path by any stretch, it does represent an effort to change the focus and therein potentially pull attention away from ongoing advances in developing the opportunity concept. Having said this, Davidsson has been a leader in the field for many years because of his keen ability to provide deeply informed and well-reasoned perspectives on a range of issues. In this regard, I appreciate his willingness to provide his reflections on the “misgivings” article and I look forward to continuing the conversation with him, and many others, as we collectively strive to move the field forward in a way that maximizes scholarly impact. Acknowledgements I am grateful for the time and talent devoted by David Williams, Steve Bradley and David Scheaf to providing valuable feedback and insightful ideas that greatly enhanced the quality of this article. References Astley, W.G., 1985. Administrative science as socially constructed truth. Adm. Sci. Q. 497–513. Bennis, W.G., O’Toole, J., 2005. How business schools lost their way. Harv. Bus. Rev. 83 (5), 96–104. Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: a re-conceptualization. J. Bus. Ventur. 30 (5), 674–695. Davidsson, P., 2017a. Reflections on misgivings about “dismantling” the opportunity construct. J. Bus. Ventur. Insights 7, 65–67. Davidsson, P., 2017b. Entrepreneurial opportunities as propensities: Do Ramoglou & Tsang move the field forward? J. Bus. Ventur. Insights. http://dx.doi.org/10. 1016/j.jbvi.2016.02.002i. Dimov, D., 2011. Grappling with the unbearable elusiveness of entrepreneurial opportunities. Entrep. Theory Pract. 35 (1), 57–81. Dubin, R., 1978. Theory Building. Free Press, New York. Hirsch, P.M., Levin, D.Z., 1999. Umbrella advocates versus validity police: a life-cycle model. Organ. Sci. 10 (2), 199–212. Lee, J.H., Venkataraman, S., 2006. Aspirations, market offerings, and the pursuit of entrepreneurial opportunities. J. Bus. Ventur. 21 (1), 107–123. McKinley, W., Mone, M.A., 1998. The re-construction of organization studies: wrestling with incommensurability. Organization 5 (2), 169–189. McMullen, J.S., Dimov, D., 2013. Time and the entrepreneurial journey: the problems and promise of studying entrepreneurship as a process. J. Manag. Stud. 50 (8), 1481–1512. Ramoglou, S., Tsang, E., 2016. A realist perspective of entrepreneurship: opportunities as propensities. Acad. Manag. Rev. 41 (3), 410–434. Ramoglou, S., Tsang, E., 2017. In defense of common sense in entrepreneurship theory: beyond philosophical extremities and linguistic abuses. Acad. Manag. Rev. Rynes, S., Bartunek, J., Daft, R., 2001. Across the great divide: knowledge creation and transfer between practitioners and academics. Acad. Manag. J. 44, 340–355. Shane, S., Venkataraman, S., 2000. The promise of entrepreneurship as a field of research. Acad. Manag. Rev. 25 (1), 217–226. Van, de Ven, A., 2007. Engaged Sholarship: A Guide for Organizational and Social Research. Oxford University Press, Oxford. Weick, K.E., Sutcliffe, K.M., Obstfeld, D., 2005. Organizing and the process of sensemaking. Organ. Sci. 16 (4), 409–421. Williams, D.W., Wood, M.S., 2015. Rule-based reasoning for understanding opportunity evaluation. Acad. Manag. Perspect. 29 (2), 218–236. Wood, M., Williams, D., Grégoire, D., 2012. The road to riches? An integrated model of cognitive processes underpinning entrepreneurial action. In: Corbett, A., Katz, J. (Eds.), Entrepreneurial Action: Advances in Entrepreneurship, Firm Emergence and Growth 14. Emerald, Bingley, pp. 207–252. Wood, M., McKelvie, A., Haynie, J.M., 2014. Making it personal: opportunity individuation and the shaping of opportunity beliefs. J. Bus. Ventur. 29 (2), 252–272. Wood, M.S., 2017. Misgivings about dismantling the opportunity construct. J. Bus. Ventur. Insights 7, 21–25. Wood, M.S., McKinley, W., 2010. The production of entrepreneurial opportunity: a constructivist perspective. Strateg. Entrep. J. 4, 66–84. Wood, M.S., Williams, D.W., 2014. Opportunity evaluation as rule‐based decision making. J. Manag. Stud. 51 (4), 573–602. Wood, M.S., McKinley, W., 2017. After the venture: the reproduction and destruction of entrepreneurial opportunity. Strateg. Entrep. J. 11 (1), 18–35.
81