Journal of Management
The Concept of ''Opportunity'' in Entrepreneurship Research: Past
Accomplishments and Future Challenges
Jeremy C. Short, David J. Ketchen, Jr, Christopher L. Shook and R. Duane Ireland
Journal of Management 2010 36: 40 originally published online 19 October 2009
DOI: 10.1177/0149206309342746
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The Concept of “Opportunity” in
Entrepreneurship Research: Past
Accomplishments and Future Challenges
Jeremy C. Short
Texas Tech University
David J. Ketchen, Jr.
Christopher L. Shook
Auburn University
R. Duane Ireland
Texas A&M University
Opportunity is a central concept within the entrepreneurship field, and there is now a critical
mass of literature centered on the concept. The authors seek to make two main contributions to
this literature. First, we provide a detailed review of research on the opportunity concept and
the processes surrounding it, highlighting extant insights and future needs. Second, we describe
ways that the entrepreneurship literature’s insights about the opportunity concept could be
enhanced by research in other fields, both inside and outside business-related domains.
Keywords: entrepreneurship; ideas; opportunity; opportunities; exploration; exploitation
A wise man will make more opportunities than he finds.
—Francis Bacon
Without an opportunity, there is no entrepreneurship. A potential entrepreneur can be
immensely creative and hardworking, but without an opportunity to target with these
Acknowledgments: David J. Ketchen, Jr. and Christopher L. Shook wish to acknowledge the research support of
the Lowder Center for Family Business and Entrepreneurship at Auburn University.
Corresponding author; Jeremy C. Short, Texas Tech University, Jerry S. Rawls College of Business, Lubbock,
Texas, 79409, USA
E-mail: [email protected]
Journal of Management, Vol. 36 No. 1, January 2010 40-65
DOI: 10.1177/0149206309342746
© 2010 Southern Management Association. All rights reserved.
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 41
characteristics, entrepreneurial activities cannot take place. Recognizing this reality has
meant that whereas historically entrepreneurship research has tended to center on entrepreneurs and their behaviors in creating new ventures, the role opportunities play has received
increased scholarly attention in recent years. As Eckhardt and Shane (2003) note,
Researchers have recently shifted attention away from approaches that focus on identifying
those people in society who prefer to become entrepreneurs towards understanding the nexus of
enterprising individuals and valuable opportunities . . . This new focus has required scholars to
explain the role of opportunities in the entrepreneurial process. (p. 333)
Indeed, opportunities are one of the key concepts that define the boundary and exchange
conditions of the entrepreneurship field. (Busenitz, West, Shepherd, Nelson, Chandler, &
Zacharakis, 2003).
Despite the emergence of opportunity as a central concept for entrepreneurship researchers,
little agreement exists about the definition and nature of opportunities (Hansen & Shrader,
2007). Our opening quote by Francis Bacon alludes to two popular schools of thought—one
contending that opportunities are discovered and another contending that they are created
(Alvarez & Barney, 2007). Others view opportunities as products of a creative process that is
more gradual, involving a synthesis of ideas over time (Dimov, 2007a). Whereas some definitions focus on the chance to introduce innovative goods, services, or processes (e.g., Gaglio,
2004), others are primarily concerned with the role of opportunities in creating new ventures
(e.g., Baron, 2008).
Given the importance of the opportunity concept to scholars and organizations, there is a need
to summarize extant knowledge about this concept as the foundation for setting the stage for
further advances. We seek to offer two contributions in light of this need. First, we conduct a
detailed review of insights about opportunity and the processes surrounding it appearing in
entrepreneurship research. This review is intended to consolidate past accomplishments and to
set the stage for future developments. More broadly, we believe that insights about opportunities
appearing within the entrepreneurship literature could be enhanced by relevant research in other
fields, including accounting, anthropology, economics, finance, organizational behavior, human
resource management, marketing, operations management, political science, psychology, sociology, and strategic management. Because few collaborative bridges have been built, our second
intended contribution is developing ideas that leverage insights about opportunities offered
within other fields to inform entrepreneurship questions and scholarly work.
Research on Entrepreneurial Opportunities
Overview of Review Approach
To further our understanding of entrepreneurial opportunities, we reviewed relevant insights
appearing in highly regarded entrepreneurship journals as well as highly regarded broad audience journals. We began our search within the set of journals used in Busenitz et al.’s (2003)
review of entrepreneurship research. This list included major management journals and three
leading entrepreneurship journals. Following Busenitz et al.’s (2003) procedure, we used the
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42 Journal of Management / January 2010
ABI/Inform database and searched for articles, regardless of time period, in which “opportunity” or “opportunities” were used in the title, keywords, or abstract. Journals publishing
relevant works included Academy of Management Journal, Academy of Management Review,
Entrepreneurship Theory and Practice, Journal of Business Venturing, Journal of Management, Management Science, Organization Science, and Strategic Management Journal. As we
discovered relevant works, we examined their reference sections to identify other potentially
relevant articles. This additional search process revealed other published works in Journal of
Management Studies, Organization Studies, and Strategic Entrepreneurship Journal. We then
examined each article to assess whether the terms opportunity and opportunities were used in
relevant ways. Our search yielded 40 conceptual and 28 empirical efforts.
The majority of articles were found in three entrepreneurship journals—Journal of Business
Venturing (20 out of 64 articles; 31%), Entrepreneurship Theory and Practice (13 articles;
19%), and Strategic Entrepreneurship Journal (13 articles; 19%). Overall, these three outlets
accounted for 46 out of 68 (68%) works on the opportunity concept. Other outlets publishing
research that is relevant to our objectives included Journal of Management Studies (8 articles;
12%), Academy of Management Review (4 articles; 6%), Journal of Management (4 articles;
6%), and Management Science (2 articles; 3%). Academy of Management Journal, Organization
Science, Organization Studies, and Strategic Management Journal each contributed one article. We did not find relevant articles in Administrative Science Quarterly, the Journal of Applied
Psychology, the Journal of Organizational Behavior, Organizational Behavior and Human
Decision Processes, or Personnel Psychology. One interpretation of this distribution is that
entrepreneurial opportunities have been of much greater interest to entrepreneurship scholars as
compared to the management field in general.
Theories and Methods in Opportunity Research
We summarize the key features of each conceptual and empirical article in Tables 1 and 2,
respectively. When reviewing conceptual articles, we examined the theoretical/literature
base as well as capturing an understanding of how the work contributes to knowledge about
the opportunity concept. Research in entrepreneurship has been criticized for lacking adequate theoretical bases (Shane & Venkataraman, 2000); however, we found that research
surrounding the opportunity construct has been theoretically rich, embracing a multitude of
theories, including coherence theory, creation theory, discovery theory, organizational learning, research on affect, social cognitive theory, and structuration theory.
Our review of conceptual works suggests the opportunity construct holds great promise as
a basis for theory building. For example, Ardichvili et al. (2003) use Dubin’s (1978) theory
building framework to develop a theory of opportunity identification and development. Such
approaches could be used to build theory on other opportunity-related processes, such as
opportunity creation, discovery, recognition, exploration, and exploitation. Looking to the
future, other forms of theory building can be used to move this research stream forward. For
example, given the different definitions of opportunity in the literature (i.e., created vs. discovered vs. recognized), use of configurations and typologies may be an appropriate approach
to creating new theory (e.g., Doty & Glick, 1994; Short, Payne, & Ketchen, 2008).
(Text continues on p. 46)
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 43
Table 1
Review of Conceptual Articles on Opportunities
Literature/Theory Base
Contribution to Understanding the
“Opportunity” Concept
Jones & Butler (1992)
Information and agency
Agencies problems between managers and
entrepreneurs exist in the corporate context due to differing risk preferences
regarding opportunism, which can discourage entrepreneurial efforts
Shane & Venkataraman (2000)
The entrepreneurship field should be
defined by the individuals and processes
that lead to the discovery, evaluation,
and exploitation of opportunities
Aldrich & Cliff (2003)
Research on family firms
Transformations in the degree of family
embeddedness may lead to the emergence and recognition of new entrepreneurial opportunities
Ardichvili, Cardozo,
& Ray (2003)
Dubin’s (1978) theory building framework
Personality traits, social networks, and
prior knowledge are antecedents to the
entrepreneurial alertness needed to recognize, evaluate, and develop opportunities
Denrell, Fang, & Winter (2003)
Resource-based theory and
research in economics
Develops a framework for analyzing strategic factor market inefficiencies, which
suggests that strategic opportunities represent a situation when prices fail to
reflect the value that represents a
resource’s best use
Eckhardt & Shane (2003)
Disequilibrium framework
Presents a typology wherein opportunities
manifest themselves along three dimensions: changes in the product/service
markets, different sources of opportunity, and by what actors initiate change
in opportunities
Ireland, Hitt, & Sirmon (2003)
Strategic entrepreneurship
Gaglio (2004)
Social cognition
Small firms are generally better at indentifying opportunities but less adept at
appropriating value by developing competitive advantages
The processes of mental simulation and
counterfactual thinking provide the
mechanisms by which opportunities are
identified and developed
Chiasson & Saunders (2005)
Structuration theory
Opportunity recognition and formation are
complementary, rather than contrasting
explanations for the existence of entrepreneurial opportunities
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44 Journal of Management / January 2010
Table 1 (continued)
Literature/Theory Base
Contribution to Understanding the
“Opportunity” Concept
Corbett (2005)
Experiential learning theory
Individuals with different learning modes
will perform better in regard to different
parts of the opportunity identification
and exploitation process
Dutta & Crossan (2005)
Organizational learning
4 I’s (Intuiting, Interpreting, Integrating,
and Institutionalizing) are all part of the
processes that comprise the life cycle of
entrepreneurial opportunities
Lumpkin & Lichtenstein (2005)
Organizational learning
Builds on three approaches to organizational learning (behavioral, cognitive,
and action learning) to develop a creativity-based model of opportunity recognition that includes the discovery and
formation phases
Oviatt & McDougall (2005)
Research on international
Entrepreneurial opportunities are the starting point that drives a model of international entrepreneurship that determines
the speed of internationalization
De Carolis & Saparito (2006)
Social cognitive theory
Develops a model suggesting that the interplay of social capital and cognitive biases
explains why some people exploit opportunities whereas others do not
Lee & Venkataraman (2006)
Opportunities are created when disequilibrium exists between an individual’s
level of aspiration and her/his appraised
value in the labor market
McMullen & Shepherd (2006)
Opportunities are exploited when individuals are willing to bear the uncertainty
needed to take entrepreneurial action
Sarason, Dean, & Dillard
Structuration theory
Offers a structuration view of entrepreneurship, which suggests that opportunities do not exist independently but
rather arises via coevolution among the
entrepreneur and social systems
Zahra, Yavuz, & Ucbasaran
Research on trust
The existence of trust in established companies can have both positive and negative effects on the opportunity
recognition, evaluation, and framing
Alvarez & Barney (2007)
Discovery theory and creation
Discovery theory and creation theory provide competing explanations for how
entrepreneurial opportunities are formed
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 45
Table 1 (continued)
Literature/Theory Base
Contribution to Understanding the
“Opportunity” Concept
Chiles, Bluedorn, & Gupta
Austrian economics
Entrepreneurs engage in a process of creative imagination in which opportunities
are exploited by continuously combining and recombining intermediate goods
to produce consumer goods
Cohen & Winn (2007)
Sustainable entrepreneurship
Market imperfections lead to opportunities
for the creation of new technologies and
business models
Dean & McMullen (2007)
Research on environmental
Environmental market failures represent
opportunities for achieving profitability
while also reducing environmentally
degrading behaviors
Dimov (2007a)
Research on creativity
The generation of opportunities is a
function of contextual and social
influences rather than the insights of a
single individual
Fiet (2007)
Systematic search is a more effective
method to discovering opportunities
than alertness
Hjorth (2007)
Narrative approach
The opportunity construct should be
broadened to include the timing of
opportunity creation
Hsieh, Nickerson,
& Zenger (2007)
Behavioral theory of the firm
Opportunity discovery is a problem-solving
process where an organized search leads
to answers about unsolved problems
Lee, Peng, & Barney (2007)
Real options theory
Entrepreneurial friendly bankruptcy laws
encourage the exploitation of opportunities at the societal level
Mahnke, Venzin,
& Zahra (2007)
Research on multinational
Structural differences influence solutions to
communicative, behavioral, and value
uncertainties in recognizing and selecting
opportunities for multinational enterprises
Miller (2007)
Entrepreneurial risk
Unique conceptualizations of risk and
rationality are associated with opportunity recognition, discovery, and creation
Shepherd, McMullen, &
Jennings (2007)
Coherence theory
Presents a theoretical framework wherein
opportunities evolve from third-person
opportunity beliefs (i.e., an opportunity
exists for “someone”) to become firstperson opportunity beliefs (i.e., an
opportunity exists for “me”)
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46 Journal of Management / January 2010
Table 1 (continued)
Contribution to Understanding the
“Opportunity” Concept
Literature/Theory Base
Van de Ven, Sapienza,
& Villanueva (2007)
Entrepreneurs who consider both collective and self-interests are more likely to
recognize and/or create opportunities
Witt (2007)
Research on vision and strategic choice
The entrepreneurial choice between firms
and markets serves as a core element of
the entrepreneurial pursuit to capitalize
on certain business opportunities
Baron (2008)
Research on affect
Affect (individual’s moods and feelings)
influences entrepreneur’s cognitions,
and thus, shapes entrepreneurial processes such as opportunity recognition
Choi, Lévesque, & Shepherd
“Timing of exploitation”
Timing is a critical factor when transitioning between the opportunity exploration
and exploitation processes
Eckhardt & Ciuchta (2008)
Population ecology
The individual opportunity selection process leads to a multistage selection
model at the population level
Fiet & Patel (2008)
The value of opportunities can be maximized by forgiving business models
where the risk is disproportionally
shifted to stakeholders outside of the
principal entrepreneur/investors
Foss & Foss (2008)
Resource-based view/
economics of property rights
Property rights and transaction costs are
antecedents of opportunity discovery
Klein (2008)
Work of Austrian economists
Cantillon, Knight, and
Opportunities as subjective phenomena
(judgments) that are imagined, rather
than created or discovered
Zahra (2008)
Certain technology contexts may be more
conducive to discovering opportunities,
whereas others encourage both creation
and discovery
Schindehutte & Morris (2009)
Complexity science
Strategic entrepreneurship involves
both exploration and exploitation of
Adding to existing conceptual frameworks to develop more complex theoretical models is
another fruitful avenue for future research. For example, Baron (2008) outlines how individuals’ affect leads to cognitive processes such as judgments and perceptions that in turn
drive key aspects of the entrepreneurial process such as opportunity recognition. This model
could be extended to include key organizational outcomes such as new venture creation and
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 47
start-up performance. Another possibility is considering how organizational characteristics
(e.g., resource availability) and environmental conditions (e.g., industry munificence and
dynamism) could moderate such relationships. A third possibility is building theoretical ties
to other streams of entrepreneurship research, such as social entrepreneurship (Short, Moss,
& Lumpkin, 2009) and entrepreneurship within informal economies (Webb, Tihanyi, Ireland,
& Sirmon, 2009). For example, some entrepreneurial opportunities appear to arise as a
response to social injustice. Given this reactionary nature, perhaps definitions of opportunities focused on discovery are more relevant in this context than those that center on
When reviewing empirical works, we examined study design, the assessment/measurement
of “opportunity,” literature/theory base, and findings. In terms of study designs, surveys were
used twice as often as all other options combined. Although survey designs enable the efficient
generation of large samples (e.g., 637 business founders/owners—Ucbasaran et al., 2009;
400 firms—Davidsson, 1991), surveys are limited as to the type of relationships they can accurately assess and are commonly prone to common method variance issues. The vast majority of
the studies using surveys were cross-sectional in nature. Such designs are less than ideal, given
that opportunity creation, recognition, exploration, and exploitation are dynamic processes.
Wiklund and Shepherd’s (2003) design decision to survey small business managers at two
points in time 3 years apart is an exception to the cross-sectional trend. Their design is notable
for separating the measurement of cause (e.g., aspirations, resources, and opportunities) and
effect (e.g., growth).
Encouragingly, recent research features designs such as quasi-experiments, experiments,
and field studies, all of which are better suited than surveys for examining dynamic processes
such as those involving opportunities. For example, Mullins and Forlani (2005) used an
experimental design to study the effects of entrepreneurs’ risk preferences on their choice of
new venture opportunities. More generally, entrepreneurship researchers are identifying a
variety of novel and powerful approaches that promise to enhance the rigor of future research
(Short, Ketchen, Combs, & Ireland, in press).
In terms of analytical techniques, ordinary least squares (OLS) regression has been the
most prevalent approach within studies of opportunities. Using OLS regression is problematic because it assumes normally distributed static data, but opportunities are rarely normally
distributed or static (Eckhardt & Shane, 2003). An exemplar is offered by Shane (2001), who
used multiple years of historical data and event history analysis to investigate firm formations across several years after patents were filed for inventions. Had OLS regression been
used instead, one arbitrary time period for measuring firm creation would have been imposed
on the phenomenon, and a much less accurate picture may have been painted.
Going forward, quantitative techniques for analyzing individual judgments could prove to
be very helpful in understanding opportunities. Decomposition methods focus on extracting
an individual’s decision rule by comparing an individual’s choices when faced with multiple
scenarios. For example, Choi and Shepherd (2004) used conjoint analysis to develop a mental
model of when entrepreneurs are more likely to exploit opportunities. Decomposition methods may be particularly valuable to opportunity researchers because they allow them to
examine how respondents process decision making contingencies (e.g., risk) without relying
on respondents’ introspection, which is often inaccurate (Priem & Harrison, 1994).
(Text continues on p. 53)
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Table 2
Review of Empirical Articles on Opportunities
Overview of Study
Depiction of Opportunity
Jennings &
Seaman (1990)
Archival data on 80 Texas
savings and loan
Opportunities are created by industry deregulation and are exploited
by new business activities
Firms with prospector strategies and
organic structures pursue more opportunities than do firms with defender strategies and mechanistic structures
Davidsson (1991)
Survey data on 400
Swedish small firms
Objective opportunities and perceived opportunities are distinct
Katona’s notion of willingness and ability as
determinants of economic behavior
Industry characteristics, geographic dispersion, and competitors determine objective opportunities, whereas objective
opportunities, perceived external obstacles, entry barriers, and room for growth
determine perceived opportunities
Kaish & Gilad
Survey data from 51
company founders and
36 financial corporation
Entrepreneurs search for opportunities differently than do business
Theory of entrepreneurial Entrepreneurs discover opportunities
through more search activities and different analysis of data vis-à-vis nonentrepreneurs
Patterson (1993)
Archival data for 151
firms in 6 industries
Opportunities are fleeting
Game theory
The ability to exploit opportunities
decreases with industry age
Amit, Muller, &
Cockburn (1995)
Survey data on 352 new
entrepreneurs, acquired
from Canadian Labor
Market Activity Survey
Exploiting opportunities involves
self-employment and entails costs
Game theory
Opportunity costs are negatively related to
opportunity exploitation
Zahra (1996)
Archival and survey data
of 138 Fortune 500
Opportunities arise due to differences across industries in their
technological innovations and
research and development
Agency theory
The level of perceived technological
opportunities moderates the relationships
between corporate governance and
institutional ownership with corporate
Thakur (1999)
50 case studies of Indian
Opportunities exist as a result of
demand and supply gaps, price
differences, technology substitution, or innovation
Grounded theory
Access to resources limits range of opportunity choice
Literature/Theory Base
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Table 2 (continued)
Overview of Study
Depiction of Opportunity
Literature/Theory Base
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49 Shane (2000)
Detailed case studies of
eight new ventures
exploiting a single MIT
Technological change creates new
processes, products, markets, and
new ways of organizing only if
entrepreneurs discover ways to
exploit these opportunities
Austrian Economics
People are not equally likely to discover
opportunities from technological change.
Entrepreneurs discover rather than search
for opportunities. Prior distribution of
knowledge determines who discovers
Shane (2001)
Event history analysis of
1,397 MIT patents
Technological innovations can create opportunities that may be
exploited by new firm creation
Research on technological Technological inventions that are more
innovation and industry
radical, more important, and have a
broader scope of patent protection are
more likely to be commercialized
through the creation of new firms
Randoy & Goel
Archival data collected on
68 Norwegian SMEs
Opportunity exploitation requires
Agency theory
Firms with founder leaders face different
agency contexts than firms with nonfounder leaders
Wiklund &
Shepherd (2003)
Multiwave survey of 326
CEOs of Swedish small
Environmental dynamism is
implied to be related to opportunities
Theory of planned
Environmental dynamism enhances the
effect of a small business manager’s
growth aspirations on the level of small
business growth
Choi & Shepherd
Conjoint analysis experiment using 55 entrepreneurs housed in
Opportunities exist when there is
customer demand for a new product and are exploited by venture
Resource-based view
Entrepreneurs are more likely to exploit
opportunities when they perceive more
knowledge of customer demand for the
new product, more fully developed necessary technologies, greater managerial
capability, and greater stakeholder
Mullins & Forlani
Two experiments involving 75 founder CEOs of
the fastest growing public firms
Opportunities involve the creation
of new firms that vary in terms of
Research on individual
differences and risk
The likelihood and the magnitude of loss/
gain influence an entrepreneur’s choice
of new venture opportunities
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Shepherd &
DeTienne (2005)
Experiment involving 78
MBA students
Differences in knowledge allow
individuals to identify
Austrian Economics and
cognitive psychology
Prior knowledge of customer problems not
only directly affects the quantity and
quality of opportunities identified, but
also moderates the effect of financial
reward on opportunity identification
Baron & Ensley
Survey of 88 experienced
and 106 novice entrepreneurs
Opportunities involve new products
or new services that lead to the
creation of new businesses
Pattern recognition
The cognitive representations of
opportunities of experienced
entrepreneurs differ from those of novice
entrepreneurs. Pattern recognition is a
key component of opportunity
Cliff, Jennings,
& Greenwood
Survey of 60 law firm
founders in Vancouver
Opportunities involve the creation
of new firms that vary in terms of
their innovativeness
Institutional theory
Founders with extensive experience in the
industry’s core firms establish imitative
firms, whereas founders with greater
experience in the industry’s periphery
establish innovative firms
Eisenhardt, &
Furr (2007)
Interviews and secondary
data on 67 country
entries by 12 entrepreneurial firms in 4 global
technology industries
Abundant opportunities imply
opportunities are discovered and
Organizational learning
Past experiences result in decision-making
heuristics, which allow opportunity
capture and improve subsequent
DeTienne &
Chandler (2007)
Quasi experiment involving 95 undergraduate
business students and a
survey of 189 entrepreneurs in 2 high-technology industries
Opportunity identification includes
both recognized and created
opportunities for creating a new
Human capital theory and Although men and women use unique
social feminist theory
stocks of human capital and exhibit
different processes of opportunity
identification, the innovativeness of the
opportunities identified by each gender
exhibited no differences
Table 2 (continued)
Overview of Study
Depiction of Opportunity
Literature/Theory Base
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Dimov (2007b)
Online experiment
involving 95 MBA and
undergraduate students
Opportunities begin as ideas; they
are intuited and interpreted by
Experiential learning
Intention to exploit an opportunity is
driven not only by the interaction of how
much knowledge individuals have of the
opportunity domain but also on whether
their learning style matches the situation
at hand
Gruber (2007)
Online survey of 142
founders of venture
capitalist–backed firms
Opportunities are exploited by the
creation of new firms
and decision-making
Planning is beneficial to the success of
opportunity exploitation
Ozgen & Baron
Survey of 201 IT
company founders
Opportunities involve the creation
of new firms. Individuals vary in
their “alertness” to such
Social psychology
Mentors, informal industry networks and
participation in professional forums are
positively related to opportunity
Dyer, Gregersen,
& Christenson
Survey of 72
entrepreneurs and 310
Starting an innovative business
involves recognizing,
discovering, or creating
Inductive theory building
and network theory
One’s ability to generate novel ideas for
innovative new businesses is a function
of questioning, observing, experimenting,
and idea networking behaviors
& Sarathy
Survey of 74 family firms
Opportunities result from
technological innovation, and
industries vary in opportunity
Resource-based view
The positive relationship between
reciprocal altruism and family firm
performance is stronger in
environments rich with technological
Gartner, Shaver,
& Liao (2008)
Open-ended questions
from the Panel Study of
Opportunities are perceived as
positive situations that are
Strategic issue literatures
and attribution theory
Entrepreneurs attributed the
opportunities they exploited to their
abilities and efforts
51 52
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Hmieleski &
Baron (2008)
Survey of 201 lead
The opportunity discovery context
is characterized by risk, while the
opportunity creation context is
characterized by uncertainty
Regulatory focus theory
Mitchell, &
Smith (2008)
Survey and interview data
from 220 entrepreneurs
Opportunities are created
Cognitive psychology
Shepherd, &
Westhead, &
Wright (2009)
Conjoint analysis
experiment using 73
Opportunities are evaluated based
on future value
Resource-based view
Survey of 637 British
business founders or
Opportunities involve creation or
purchase of a business
Cognitive psychology
An entrepreneur’s self-regulatory mode
has implications for the success of
opportunity exploitation in dynamic
environments. In dynamic
environments, a promotion focus
enhances performance, whereas a
prevention focus reduces performance
Past failure positively influences the
new transaction commitment mindset
and keeps opportunity formation
processes flexible while commitment
Entrepreneurs are attracted to
opportunities that are complementary
to their existing knowledge resources
Experienced entrepreneurs identified
more opportunities and exploited
more innovative opportunities with
greater wealth creation potential. An
inverse U-shaped relationship was
detected between the proportion of
failed businesses and the number of
opportunities identified
Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 53
Measurement within opportunity research has evolved over time toward greater sophistication. Early studies tended to assume the existence of opportunities from environmental
contexts (e.g., a recently deregulated savings and loan industry—Jennings & Seaman, 1990;
dynamic industries—Wiklund & Shepherd, 2003). More recently, scales and indices have
been used to measure opportunities and an individual’s interaction with them. Technological
innovation as the source of opportunities was the focus of an index developed by Zahra
(1996) and used by Eddleston et al. (2008). A scale to measure the interaction of individuals
with opportunities was adapted from a six-item scale from Singh, Hills, Hybels, and Lumpkin
(1999) by Ozgen and Baron (2007). This scale was designed to measure both the ability to
recognize opportunities (e.g., “I can recognize new venture opportunities in industries where
I have no personal experience”) and alertness to opportunities (e.g., “I have a special alertness or sensitivity toward new venture opportunities”).
Ideally, researchers should use multiple measures of opportunity to achieve triangulation and
enhance confidence that the concept is being captured. For example, Bingham, Eisenhardt, and
Furr (2007) measured “opportunity capture” with three measures that were each collected in different manners (archival, survey, and interview data). In Zahra (1996), the results of analyses
using a four-item measure of technological opportunities were replicated with the industries’
3-year average research and development expenditures. In both studies, confidence in the findings
was enhanced because results were consistent across measures. Although desirable, triangulation
is not always feasible. Multiple sources of corroborating data do not always exist nor is the data
always readily available. Furthermore, time and budget constraints may limit a researcher’s ability to obtain an alternative measurement. However, given the importance of the opportunity
construct to the field, we encourage researchers to assess opportunity via triangulation when feasible. Triangulation is particularly important when using self-report measures, given that such
measures are subject to bias (e.g., an individual’s abilities or thinking processes).
Themes in the Opportunity Literature
Following Raisch and Birkinshaw (2008), we organize our review to examine antecedents, outcomes, and moderators of opportunities and/or opportunity-related processes (e.g.,
opportunity exploration/exploitation, opportunity recognition). To provide a foundation for
discussing these themes, we first begin by reviewing works that shed light on the nature of
opportunities. Second, we discuss the antecedents, or “drivers” of opportunities. The third
theme concerns the outcomes that follow opportunities or opportunity-related processes. The
fourth theme related to factors that moderate our understanding of opportunities, as well as
conceptual and empirical variables that serve as moderators.
The nature of opportunities. Strategy and policy resemble power in political science. They are
catch-all concepts that denote anything and so they mean nothing and they cannot be operationalized.
Yet they form the core around which a field has organized itself. (Meyer, 1991: 831)
The above characterization was offered in response to Meyer (1991) asking a respected colleague what is distinctive about the strategic management field. Given the rallying of the entrepreneurship field around the opportunity concept, entrepreneurship scholars should be careful
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54 Journal of Management / January 2010
that the term opportunity does not also become a catchall phrase and thereby lose substance and
meaning (Gartner, Carter, & Hills, 2003). Our review revealed that the increase of opportunity
research has been accompanied by a number of different processes associated with the term
opportunity (i.e., creation, discovery, recognition). In addition, numerous terms describing types
of opportunities, or ideas similar to the concept of opportunity, are found in the literature, such
as “aha!” (Lumpkin & Lichtenstein, 2005) or “eureka” moments (Fiet, 2007).
Variance in using the term opportunity may be a function of differences in theoretical perspectives. Grounded in earlier contributions from Casson (1982) and Shane and Venkataraman
(2000), Eckhardt and Shane (2003: 336) define opportunities as “situations in which new goods,
services, raw materials, markets and organizing methods can be introduced through the formation
of new means, ends, or means-ends relationships.” This characterization reflects the dominant
view, one that is fairly instrumental and rational in its orientation.
To date, presenting opportunities as either concrete realities or as an enactment of an
entrepreneur’s unique vision have shaped the two dominant views of the opportunity construct (Alvarez & Barney, 2007). The first view positions opportunities as discovered—that
is, opportunities are viewed as a function of a tangible reality. Opportunities exist “out there”
waiting to be found. The other dominant view posits that opportunities are created—a function of enacted actions that occur during entrepreneurial processes. For example, Ardichvili
et al. (2003: 106) contend that “opportunities are made, not found.” A reasonable middle
ground position is that some opportunities are discovered whereas others are created. Our
expectation is that the literature will move toward this position in the near future. We believe
this position surfaces intriguing contextual questions for scholars to explore regarding when
and how opportunities are found or created.
The critical role that timing plays in developing opportunities dates to Schumpeter’s
(1954) early notions that creative destruction processes occur when new opportunities displace existing business models. Thus, to fully understand the opportunity process, one must
understand the temporal dynamics of opportunities. As the creative process unfolds, ex ante
possibilities can only become ex post opportunities as the feasibility of particular possibilities is evaluated (Dimov, 2007a). Incorporating the role of time answers the call of scholars
such as Ford (2002, p. 645), who argues that “making time a more central aspect of our
theoretical language will promote better process descriptions that are likely to reflect the
experiences of organizational members more directly.”
Delineation of the opportunity concept requires consideration of two related concepts,
both of which may or may not evolve into opportunities. Ideas are a function of creativity
and learning; however, ideas lead to potential opportunities only if carefully vetted and
developed (Dimov, 2007b; Hsieh et al., 2007). Dreams are aspirations whose connection to
bona fide opportunities remains undefined (Ardichvili et al., 2003). Entrepreneurial dreams
often center on noneconomic goals, such as gaining autonomy, improving society, and creative expression (Rindova, Barry, & Ketchen, 2009). In these cases, ambiguity surrounds the
ability of a dream to become economically viable.
The argument that ideas and dreams are a precursor to entrepreneurial opportunities is
consistent with Kirzner’s (1997) suggestion that alert individuals come upon opportunities
by surprise. These surprises are not inherently opportunities but rather they become opportunities via evaluative processes such as the assessment of risk and uncertainty. Such a view
is consistent with Denrell et al.’s (2003) assertion that a successful opportunity
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 55
[Is] a consequence of effort and luck joined by alertness and flexibility, where the effort was not
initially directed to the specific end realized, alertness is required to recognize the lucky appearance of a new possibility, and flexibility is displayed by redirecting the effort. (p. 985)
Overall, the literature addressing the nature of opportunities calls attention to three main
issues: the discovery versus the creation of opportunities, temporal dynamics surrounding
opportunities, and the evolution of ideas and dreams into opportunities. To capture all three,
we offer the following definition of an opportunity:
An opportunity is an idea or dream that is discovered or created by an entrepreneurial entity and
that is revealed through analysis over time to be potentially lucrative.
Antecedents to opportunities. Considerable effort has been taken to understand the cognitive and learning processes associated with opportunity creation, discovery, and recognition.
A number of works explicitly examine the role that cognitive processes, as well as elements
associated with thinking and learning, play in understanding the development of opportunities. For example, Gaglio (2004) discusses the mental simulations inherent in many entrepreneurial processes (e.g., rehearsing a sales pitch) and highlights how people characterized
as “opportunity finders” think more deeply about issues contrary to existing facts than nonfinders. A key implication of this work is that the decision biases that affect individuals in
general (see Fiske & Taylor, 1984) and strategic decision makers in particular (Barnes, 1984)
may also factor into the ability to successfully detect opportunities. The pairing of such
cognitions with the availability of social capital allows some entrepreneurs to more successfully exploit opportunities than others (De Carolis & Saparito, 2006).
A number of contributions highlight how insights from learning theories aid in understanding
how opportunities are developed. For instance, Lumpkin and Lichtenstein (2005) argue that
engagement in behavioral, cognitive, and action learning increases the effectiveness of the
discovery and formation phases of the opportunity recognition process. From an organizational
learning perspective, Bingham et al. (2007) demonstrate that past experiences result in decision
making heuristics that allow opportunity capture. Corbett (2005) suggests that experiential learning can facilitate the opportunity recognition process and argues that each of Kolb’s (1984)
learning styles has unique strengths that facilitate opportunity identification and exploitation
processes. For example, “assimilators” who learn by reflective observation and concrete experience should excel at bringing together seemingly separate activities to identify new opportunities.
Dutta and Crossan (2005) note that intuiting, interpreting, integrating, and institutionalizing are
organizational learning processes that are necessary for discovering, developing, and implementing entrepreneurial opportunities. Although learning is often viewed in organizational research as
a key outcome (e.g., Vera & Crossan, 2004), within opportunity research it serves as a key driver
of the effectiveness of opportunity development.
In his autobiography, Mark Twain lamented, “I was seldom able to see an opportunity until it
had ceased to be one.” Inherent in this quote is the idea that thoughtful, or fortunate, timing is
crucial to identifying opportunities. The essential characteristics of opportunities can be fully
understood only after the passage of some length of time has occurred because opportunities
simply are, according to Dimov (2007a), creative ideas that have been vetted through an evaluative process. In a general sense, the entrepreneurial process is an evolutionary one where the pool
of opportunities is constantly changing over time (Eckhardt & Ciuchta, 2008). As such, the ability
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56 Journal of Management / January 2010
to understand the role of time has implications for entrepreneurs as well as related stakeholders.
For example, the transition point at which entrepreneurs cease to explore opportunities and begin
exploiting them may have significant implications for the performance of particular projects
(Choi et al., 2008; Ireland & Webb, in press). In particular, Choi et al. (2008) argue that the transition from exploration to exploitation should come sooner rather than later for projects with a low
degree of novelty because the need to act quickly is paramount for such opportunities.
Empirical attention on the drivers of opportunities has focused primarily on the individuals
who recognize opportunities. In general, studies have centered on either the knowledge stocks or
the behaviors of entrepreneurs. Shane (2001) demonstrates that prior distribution of knowledge
determines who discovers opportunities. Shepherd and DeTienne (2005) find that the prior
knowledge of customer problems directly affects the quantity and quality of opportunities identified. Building on human capital theory and social feminist theory, DeTienne and Chandler
(2007) found that although men and women use unique stocks of human capital and exhibit different processes of opportunity identification, the innovativeness of the opportunities did not
differ. Finally, building on ideas from cognitive psychology, Mitchell et al. (2008) demonstrated
that past failures keep opportunity formation processes flexible while commitment emerges.
Researchers have also examined the behaviors of those discovering the opportunities.
Building on the theory of entrepreneurial alertness, which posits that awareness of opportunities comes from readiness to recognize market disequilibrium (Kirzner, 1973), Kaish and
Gilad (1991) suggest that entrepreneurs discover opportunities through more search activities and different analysis of data vis-à-vis nonentrepreneurs. Baron and Ensley (2006)
highlight the role of experience by finding that the cognitive representations of opportunities
of experienced entrepreneurs differ from those of novice entrepreneurs. Further, they found
that pattern recognition is a key component of opportunity recognition. Most recently, using
network theory, Dyer et al. (2008) found that one’s ability to generate novel ideas for innovative new businesses is a function of questioning, observing, experimenting, and idea
networking behaviors. Viewed collectively, the work on individuals and their behaviors illustrate the importance of knowledge, learning, and experience. Although the image of the
novice who devises a path-breaking opportunity is a romantic one, the results achieved from
extant inquiries suggest that experts are far more likely to be novel.
In summary, considerable efforts have been made to understand the antecedents of opportunities. Previous work has drawn from a variety of theoretical perspectives focusing
primarily on opportunity processes at the individual level of analysis. Future efforts could
build on this work by examining team processes, as well as organizational characteristics,
that serve as effective antecedents in creating, discovering, and/ or recognizing opportunities.
Outcomes of opportunities. Much of the importance of the opportunity concept stems from the
outcomes that follow opportunity development, including new firm creation (Shane, 2001), new
venture growth (Thakur, 1999), and small firm growth (Davidsson, 1991). The focus on novel
creation stemming from opportunity-related processes is consistent with the greater body of
entrepreneurship scholarship inspired by Austrian Economics. The contention that equilibrium
processes (the basis of neoclassical economics) fail to capture key market processes, that all not
opportunities can be identified, and that information about opportunities serves as the basis on
which individuals become entrepreneurs are key tenets of Austrian Economics (Shane, 2000).
In particular, the Austrian Economics’ work of Schumpeter and Kirzner has been influential in
aiding understanding of the opportunity creation process (Shane, 2000).
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 57
Schumpeter (1934) posed a process of “creative destruction” where new opportunities are
introduced to the market at the expense of existing ones. The gradual replacement of record
and tape players with digital music devices is an example of such destruction. Kirzner (1973)
conceived of entrepreneurs as brokers with superior alertness to opportunities that can
resolve market inefficiencies. For example, the London Science Museum recently featured
an exhibit of innovations such as portable televisions and radio alarm clocks developed in
the 1950s and 1960s that were inspired by the Dan Dare comics that began in 1950. Under
Kirzner’s view, the innovators who brought these products to market did not create such
opportunities, but merely discovered that they could fill market gaps.
More recently, Lachmann’s radical subjectivist approach has been identified as an overlooked
perspective from within Austrian Economics that offers the potential to yield new insights concerning the opportunity creation process (Chiles et al., 2007). In contrast to the work of
Schumpeter and Kirzner, Lachmann (1986) depicts a process of creative imagination wherein
entrepreneurs leverage ideas and inventions from outside consumer markets to create opportunities within consumer markets. For example, the Global Positioning System was invented for
military purposes, but it indirectly created an opportunity for firms such as Garmin to sell automobile navigation devices. Overall, the creative destruction process appears to create opportunities in ways that cannot be foreseen. If so, creativity and insight within the entrepreneurial context
may be as much about diagnosing and responding to change as they are about creating change.
Several studies shed light on when entrepreneurs are able to harness change and exploit
the resultant opportunities in order to reach outcomes such as new venture creation and
growth. Entrepreneurs’ access to resources was found to shape their range of opportunity
choice (Thakur, 1999). Entrepreneurs are more likely to exploit opportunities when they
perceive they have more knowledge of customer demand, have more fully developed necessary technologies, greater managerial capability, and greater stakeholder support (Choi &
Shepherd, 2004). Finally, entrepreneurial experience was demonstrated to be linked to the
exploitation of more innovative opportunities with greater wealth potential (Ucbasaran et al.,
2009). At this point in time, studies that simultaneously consider arrays of these features are
needed. Which factors dominate if, for example, an entrepreneur lacks resources and stakeholder support but possesses good technology and managerial skills?
Moderators of opportunities. Contextually, considerable efforts have been made to examine moderators of opportunity-related processes. In general, the links between opportunities
and their antecedents and outcomes are shaped by internal processes involving individuals
as well as external processes emanating from the greater social environment. For example,
De Carolis and Saparito (2006) highlight how opportunities are influenced by individuals’
cognitions as well as their ability to develop social capital. When examining the opportunity
creation process from the vantage point of individuals nested within their environments,
structuration theory has also been a useful conceptual lens (Chiasson & Saunders, 2005;
Sarason et al., 2006). Structuration theory, developed by Giddens (1984), suggests that the
actions of individuals are inherently and iteratively intertwined with preexisting social structures. When applied to research in opportunities, this suggests that key contextual characteristics play a role in determining the creation, discovery, and/or exploitation of opportunities.
In turn, pursuing these opportunities reshapes the context that surrounds firms.
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58 Journal of Management / January 2010
A wide array of contextual influences has been identified. The trend of decreasing family size
has led to opportunities for providing consumables in smaller sizes, for example, and the rise of
dual family couples has led to growth in childcare services (Aldrich & Cliff, 2003). Likewise,
suspicion that the global climate is changing serves as a catalyst for environmentally oriented
products and processes (Cohen & Winn, 2007). Research based on game theory has found that
opportunities are more likely to be exploited when the industry is young (Patterson, 1993) and
when entrepreneurs encounter low opportunity costs (Amit et al., 1995).
Risk and uncertainty also have emerged as key moderators. Research on opportunities often
references Knight’s (1921/1985) classic definitions of risk and uncertainty. Knight uses risk to
refer to situations wherein probabilities are quantifiable and uncertainty to refer to situations
wherein probabilities are not quantifiable (Miller, 2007). With regard to opportunity recognition
(where known products are matched with existing demand), risk is perceived as being an unpredictable “statistical probability.” For opportunity discovery (where a known supply services an
unknown demand), risk is conceptualized as unknowable (to match the qualities of a genuine
discovery). For opportunity creation (where the entrepreneur creates both supply and demand),
risk is uncontrollable because creative acts are a source of irreducible uncertainty.
One implication of this work is that each perspective results in a different understanding
of the rationality of pursuing a particular opportunity. McMullen and Shepherd (2006) outline different types of uncertainty stemming from uncertainty concerning characteristics of
the environment (state uncertainty), uncertainty regarding the ability to predict changes in
the environment that may impact organizations (effect uncertainty), and uncertainty related
to potential choices (response uncertainty). They argue that entrepreneurs’ decisions to purse
an opportunity can be generally classified by the ability to perceive or willingness to bear
uncertainty. Looking to the future, applying real options theory may be fruitful. This theory
centers on how managers create and then exercise or do not exercise certain options as uncertainty is resolved (Kogut & Kulatilaka, 2001). Each of these options is, in essence, an
opportunity. As such, real options theory offers promise for revealing how risk and uncertainty shape the likelihood that opportunities will be pursued.
Finally, strategic entrepreneurship is an emerging “hot” concept that sheds new light on
opportunities. Research on strategic entrepreneurship suggests that firms face a dual challenge—
firms must continually exploit existing opportunities while also identifying new opportunities
(Ireland, Hitt, Camp, & Sexton, 2001). The former is typically viewed as the domain of the strategic management field, whereas the latter lies at the core of the entrepreneurship field (Ketchen,
Ireland, & Snow, 2007). One implication is that conceptual frameworks from both fields are
insufficient to capture firms’ dealings with opportunities. Instead, frameworks that integrate
ideas from the two fields are needed.
A focus on strategic entrepreneurship also highlights that the skills firms need in order to
exploit opportunities are much different than the skills needed to identify opportunities (Hitt,
Ireland, Camp, & Sexton, 2001). This leads us to expect that firms’ relative ability to meet
the dual challenges of strategic entrepreneurship is a key moderator of the links between
opportunities and organizational outcomes. Specifically, the better a firm is at maintaining
the delicate balance of exploiting old and identifying new opportunities, the better the firm
will be at translating opportunities into above-average financial returns. Meanwhile, firms
skilled only at exploitation or only at identification will experience weaker outcomes flowing
from opportunities, and may ultimately cease to remain competitive with rivals.
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 59
Table 3
Examples of Potential Future Research Involving Opportunities
General Focus of Research on
Possible Research Questions
Information disclosure and auditing during the IPO process
How does the relative attractiveness of a firm’s opportunities shape how information is framed during
The relationship between cultures
and entrepreneurship
How is the concept of opportunity conceived of in different cultures and different languages? How do
these different conceptions shape subsequent entrepreneurial behavior?
The relationship of institutions
and economic growth with
How do opportunities at the national level of analysis
shape opportunities at the firm level?
The relationship between financial
capital and entrepreneurship
Is the relationship between the attractiveness of an
opportunity and the investment funds available to
support the opportunity linear, exponential, or of
some other form?
Diagnosing the cognitions and
behaviors of entrepreneurs and
their employees
Does an individual’s tendency to interpret trends as
threats or opportunities predict his or her success as
an entrepreneur?
Human resource
Staffing of entrepreneurial firms
How do applicants assess their own and the firm’s
future opportunities when deciding whether to join
the firm?
The relationship between market
Does an “opportunity orientation” exist and if so does
orientation and entrepreneurship
it interact with market orientation?
The internal processes of entrepre- Are certain types of supply chains better structured to
neurial firms
capitalize on opportunities than others?
Political science
The influence of public policy on
What public policy approaches create opportunities?
Under what conditions should additional emphasis
be given to these approaches?
Understanding entrepreneurs’
To what extent do key personality features such as
locus of control and tolerance for ambiguity influence the tendency to detect and enact opportunities?
Understanding the societal context
within which entrepreneurship
takes place
How does the concept of opportunity differ across time
and across different types of social systems?
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60 Journal of Management / January 2010
Toward a Cross-Disciplinary Approach to
Research on Opportunities
Following the lead of Ireland and Webb (2007), we examine the implications for entrepreneurship research of ideas about the opportunity concept developed in other social sciences.
Table 3 displays a series of fields considered in Ireland and Webb (2007),1 describes how
each field addresses entrepreneurship, and offers potential research questions centered on
opportunities that meld ideas from each field and the entrepreneurship field. Below, we detail
what we believe are at present the most compelling prospects for building conceptual and
empirical bridges between entrepreneurship and neighboring fields.
Organizational behavior is a field that contributes to our understanding of the nature of opportunities. For example, the cognitive approaches to opportunities discussed above draw heavily on
organizational behavior. It seems very likely that other aspects of organizational behavior offer
important insights for future revelations. For example, relational trust appears to be critical for
navigating the business creation process, wherein opportunity recognition and evaluation are early
stages (Zahra et al., 2006). Also, Baron (2008) suggests that affect enhances the creativity needed
to contribute to opportunity recognition. Empirical research has found that men and women engage
in different opportunity identification processes (DeTienne & Chandler, 2007). Thus, in general,
individual-level features appear important to processes involving opportunities.
In terms of future research, the organizational behavior field’s focus on individual differences (e.g., the “Big Five” personality traits) could foster further insights concerning the ability
to discover and create opportunities. Such a connection seems likely, given that a meta-analysis
by Zhao, Seibert, and Lumpkin (2009) established that the Big Five are related to entrepreneurial intentions and entrepreneurial performance. An enterprising individual’s personality, beliefs,
values, attitudes, needs, and traits are all potentially antecedents to opportunity search, discovery, and exploitation (Shook, Priem & McGee, 2003). Although a number of conceptual efforts
have built on organizational behavior research to help explain potential catalysts for identifying
or developing opportunities (Baron, 2008; Shook et al., 2003; Zahra et al., 2006), most of these
ideas have yet to be tested. The vast literature in the marketing field on the concept of market
orientation leads us to wonder whether an “opportunity orientation” exists, and if so, what personality traits may be tied to opportunity orientation as well as whether opportunity orientation
moderates the links between opportunities and organizational outcomes.
Human resource management is a second field with the potential to aid our understanding of
the opportunity construct. Ireland and Webb (2007) note that human resource management
research concerned with entrepreneurship often centers on staffing issues within entrepreneurial
firms. An individual considering an offer to join an entrepreneurial firm will likely ponder opportunities at two levels of analysis: his or her own opportunities and those of the firm. A potentially
important research question is, How do applicants assess their own and the firm’s future opportunities when deciding whether to join the firm? Answering such a question could reveal, for
example, under what conditions an excellent personal opportunity within a firm with limited
potential is preferred over a modest personal opportunity within a firm that has great prospects,
and vice versa. Entrepreneurship scholars have theorized that the presentation of limitations by
hiring officers of an individual’s career potential within a given organization could lead individuals to pursue other opportunities in society (Lee & Venkataraman, 2006). This suggests that
human resource management research can inform inquiry into the nature of opportunities, such as
to what extent they are created or discovered.
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Short et al. / The Concept of “Opportunity” in Entrepreneurship Research 61
In reference to a more distant area of study, Ireland and Webb (2007) note that the anthropology research concerned with entrepreneurship centers on the link between culture and
entrepreneurship. We suspect that cultural differences have important implications for the
nature of opportunities as well as representing a contextual factor that can moderate relationships involving opportunities. The Chinese character for “crisis” is composed of the
characters representing “opportunity” and “danger.” Meanwhile, in most Western cultures,
opportunities are seen in a very positive light. This contrast fosters research questions such
as the following: How is the concept of opportunity conceived of in different cultures and
different languages? How do these different conceptions shape subsequent entrepreneurial
Levels of analysis beyond the firm are important in several other fields as well, and these
fields offer important ideas for the study of opportunities. Operations management’s focus on
the supply chain level of analysis calls attention to the need to understand the similarities and
differences in how supply chain partners perceive an opportunity as well as the implications
for the outcomes of their collaborative efforts to pursue the opportunity. Opportunities in the
operations management domain may lead to value-creating process innovations that can be
“in addition to” the firm’s product innovations. Economics’ interest in national growth and
outputs suggests there is value in considering how opportunities at the national level of analysis shape the nature of opportunities at the firm level. The emphasis on government and
institutions within political science encourages attention to how different public policy
approaches serve as antecedents by creating opportunities for entrepreneurs. The importance
of societal context within theories of sociology could be incorporated into investigations of
the opportunity concept by considering how the concept has changed over time. Overall, our
hope is that these questions and others offered in Table 3 will serve as a launching point for
a multidisciplinary view that could add future insights into the antecedents and consequences
of the opportunity construct.
Cross-disciplinary approaches are better suited for some domains than for others.
Entrepreneurship in the informal economy is one domain where such approaches appear to be
very useful, if not essential. The informal economy refers to exchange activities that take place
outside of legal sanctions but within the boundaries of what some groups deem legitimate as
defined by their norms, values, and beliefs. Ticket scalping, music swapping, hiring illegal immigrants, and various other “under the table” transactions are examples of informal economy
activities (Webb et al., 2009). Such exchanges are estimated to account for 17% of economic
activity in developed countries and 40% in developing countries (Schneider, 2002), but little
research attention has been devoted to the informal economy. Webb et al. (2009) develop a conceptual model of opportunity recognition and exploitation in the informal economy; however,
many questions remain, and these questions seemingly require cross-disciplinary thinking. How
entrepreneurs assemble and deploy the monetary resources needed to pursue informal economy
opportunities can be understood in part via finance and accounting research. Issues regarding how
such individuals rationalize pursuing opportunities in the informal economy despite their illegal
nature can be informed by psychological research. Theorizing from sociology and political science might guide investigation of how the nature of opportunities changes as activities move from
the informal economy to the formal economy (such as following the demise of prohibition).
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62 Journal of Management / January 2010
Opportunities are the foundation for developing fascinating research questions in part because
they are transient, difficult to detect or create, and some people are more successful at exploiting
them than others. Herein, our goal has been to advance the state of knowledge about this intriguing concept. We pursued this goal by documenting the past accomplishments of the literature on
opportunity and by laying out future challenges that research on opportunities should tackle. Our
overarching conclusion is that researchers investigating opportunities have much for which to be
commended. The number of studies has increased dramatically over time, theory has been carefully developed and tested, and measurement is becoming more precise. Further progress toward
understanding the nature of opportunities, their causes, and their effects will be made to the extent
that studies include designs that facilitate causal inferences, analytical techniques that allow for
the testing of dynamic processes, and more complex theory building and empirical modeling.
1. Ireland and Webb (2007) examined 10 fields. We adopt their list, but we divide what they labeled as “management” into “organizational behavior” and “human resource management.”
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