COMPOSITE DEFINITIONS OF ENTREPRENEURIAL OPPORTUNITY AND THEIR OPERATIONALIZATIONS: TOWARD A TYPOLOGY

ABSTRACT We examined 19 years of conceptual and operational definitions of entrepreneurial opportunity and opportunity-related processes (recognition, discovery, etc.). We found 56 articles in 6 entrepreneurship-focused publications, with 23 conceptual and 6 operational definitions of opportunity as well as 25 conceptual and 24 operational definitions of opportunity-related processes. Among those definitions, we identified 25 distinct definitional elements and 12 operational elements of opportunity as well as 48 definitional elements and 39 operational elements of opportunity-related processes. We used the definitional elements to develop six composite definitions of opportunity and eight composite definitions of opportunity-related processes. Additionally we found a disconnect between conceptual and operational definitions. INTRODUCTION “Opportunity” is a word that has appeared frequently in the entrepreneurship literature, particularly since several seminal articles called attention to its importance in understanding entrepreneurship (Kirzner, 1997; Venkataraman, 1997, Shane & Venkataraman, 2000). However, scholars have approached entrepreneurial opportunity from a variety of diverse perspectives, which has led to inconsistent definitions and operationalizations. Thus much of the work done by scholars on entrepreneurial opportunities and processes of opportunity recognition, identification, creation, etc. (henceforth simply referred to as opportunity-related processes) cannot be generalized to our understanding of the concepts. Theory building is frustrated by the fact that these scholars were not all examining the same theoretic constructs. We aimed to shed some light on the issue by investigating entrepreneurship literature examining entrepreneurial opportunities. Specifically, we systematically examined the various conceptual and operational definitions of entrepreneurial opportunity and the various processes involving opportunity (e.g. recognition, discovery, creation, etc.) and developed a set of composite definitions that may be useful in developing a typology. Given its importance to entrepreneurship, scholars have attempted to understand entrepreneurial opportunity using four distinct approaches. They have looked at it conceptually and empirically for both the opportunity itself and opportunity-related processes. Conceptually, scholars have debated exactly what constitutes an entrepreneurial opportunity and in doing so, they have generated a wide variety of definitions, sometimes ambiguous, sometimes contradictory, resulting in a considerable amount of variance in perspectives (McMullen, et al, 2007). For example, opportunity has been viewed as either simply an idea (Davidsson, et al., 2004), or more specifically as an unexploited project (Casson and Wadeson, 2007), business form, or potential venture (Singh, 1998; DeTienne & Chandler, 2007). Opportunity has also been contrasted as either an objective phenomenon that is distinct from the entrepreneur (Kirzner, 1997; Shane, 2003), or a subjective phenomenon inextricably linked to and stemming from the entrepreneur’s 1Hansen et al.: ENTREPRENEURIAL OPPORTUNITY AND THEIR OPERATIONALIZATIONSFrontiers of Entrepreneurship Research 2009