Academic journal article Entrepreneurship: Theory and Practice

Entrepreneurial Processes as Virtuous and Vicious Spirals in a Changing Opportunity Structure: A Paradoxical Perspective

Academic journal article Entrepreneurship: Theory and Practice

Entrepreneurial Processes as Virtuous and Vicious Spirals in a Changing Opportunity Structure: A Paradoxical Perspective

Article excerpt

Those such as Stevenson, Roberts, and Grousbeck (1989) and Stewart (1989, 1991) have conceptualized entrepreneurship as a process by which individuals - either on their own or inside organizations - pursue opportunities without regard to the resources which they currently control. For us, this conceptualization captures some very important aspects of entrepreneurship that serve as the building blocks for this article. For openers, in keeping with the underlying perspective in the article's title, we believe it is paradoxical indeed that the above authors' conceptualization emphasizes process, while much of the rest of the literature (e.g., Covin & Slevin, 1991) continues to treat entrepreneurship as a linear cause-and-effect phenomenon with an emphasis on several components.

Going beyond this, we consider the notion of paradox as an overall perspective useful in breathing life into the holistic and nonlinear process aspects of the just-mentioned conception of entrepreneurship. We also are interested in operationalizing these process aspects and in examining the "pursuing opportunities" emphasis in that conception.

More specifically, we examine the emergence of entrepreneurship in two banks responding in a dramatically different manner to the changing opportunity structure (as defined shortly) across time brought about by the deregulation of the Finnish banking industry. We use paradox as the major perspective within which the changing opportunity structure faced by the two banks is nested, and which, in turn, nests virtuous and vicious spirals as a way of operationalizing the emerging entrepreneurial process that we observed in the banks. We use the changing opportunity structure to help ground the entrepreneurial theory developed as we apply an approach to the two cases emphasizing our use of processual grounded theory (cf. Hunt & Ropo, in press; Ropo, 1989; Ropo & Hunt, 1994).

It is interesting to note that the entrepreneurial process within the two very different banks is really a form of intrapreneurship, which is now an increasingly "hot topic." Pinchot (1985, p. ix), describes intrapreneurs as the "dreamers who do" or "those who take hands-on responsibility for creating innovation of any kind within an organization." As we shall see, while Pinchot's orientation appears to emphasize individuals more than does ours, the two are quite consistent in their emphasis on exploiting the changing opportunity structure and being sensitive to obtaining resources within bureaucratic organizations. Thus, our approach appears useful in studying both entrepreneurship and intrapreneurship. Let us now develop our key concepts in more detail before focusing on the background and empirical aspects of our study.


A dictionary definition of paradox is ". . . a statement which seems to be at variance with common sense, or to contradict some previously ascertained truth, though when properly investigated it may be perfectly well founded" (Thatcher, 1971, p. 600). Similarly, van Heigenoort (1972, p. 45, cited in Poole & Van de Ven, 1989, p. 563) describes a paradox as consisting of "two contrary or even contradictory propositions to which one is led by apparently sound arguments Separately each is incontestable but together they seem inconsistent or incompatible."

Poole and Ven de Ven go on to argue that there are four ways to address paradoxes separately or in combination: (1) keep propositions A and B separate but appreciate their contrasts; (2) situate A and B at two different locations in the social world (e.g., stability at the micro level but dynamic change at the macro level); (3) separate A and B temporally in the same location (e. g., stable at time 1 but dynamic at time 2); or (4) find a new conception that eliminates the opposition and provides a synthesis.

Westenholtz (1993) conceives of a paradox where no choice needs to be made or is possible between the contradictions constituting the paradox (apparently similar to Poole and Ven de Ven's point 4, above). …

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