The social construction of reality (ontology)

What is reality? This is a question that has been posed for as long as human thought has existed and also dominates debate in social constructionism (Parker, 1998). Berger and Luckmann's (1967)‘The social construction of reality’ is one attempt to present assumptions about reality that are social constructionist. In this view, reality is multifaceted, there are ‘multiple realities’: dreams, the imagined future, sensations, observed materiality, unobserved materiality, heuristics and language are a few. All these forms of ‘reality’ pose important questions, and understanding of them inevitably leads to different forms and types of knowledge. ‘Common-sense’ reality is the form of reality that imposes itself on our everyday activity (Berger & Luckmann, 1967). We apprehend this reality in everything we do. It is inescapable because it is what we encounter as we interpret it. The materiality of it is there in our experience, accessible through our senses and the meaning ascribed to it is categorized for us by our language. This is what can be described as ‘common-sense’ reality; it is that which is experienced, however subjectively, that has an already constructed meaning that may be ‘taken for granted’. This everyday reality is described as ‘common-sense’ reality because the reality experienced in everyday life is ordered.

Social constructionism accepts a degree of realism but only in the sense that objectification (assumed realism) exists in the very nature of experience and that such reality is based on its historical construction, which predates an individual’s experience. The point being that language is inherited and provides a continuous and ever-changing link between the objects, contexts and people one experiences and one’s own consciousness. Objectifications (or concepts) embedded in language and that are learnt through the course of human interaction enable an individual to make sense and order their everyday existence. The experiences of the individual, for which the objectifications are central, enable an individual to construct their existing perceptions of social reality. As such, an individual’s subjective consciousness is interacting constantly with the objectifications and experiences that make up their objective reality. The social construction of reality is thus based on three core principles:

• i) All individuals have a ‘subjective’ reality because they must interpret their own social and physical context.
• ii) There is an ‘objective’ reality existing outside the individual human being comprised of objects (materiality), other people and one’s own physical being (embodiment). Understanding of this ‘objective’ reality is a relative process depending on the senses and sensual experience.
• iii) Humans also share reality through the use of verbal and non-verbal communication, symbols and behavior. Such sharing enables the existence of a sense of both relativist and realist qualities because language can be common to all, ordering and structuring experience and interpretive, being dependent on the individual’s interpretation.

Clearly, this ontology cannot be described as simply being either relativist or realist. When comparing societies and groups it is also evident that this ‘common-sense reality’, while ‘real’ to the individual, is not necessarily ‘real’ to other individuals who do not share the same ‘common-sense’ reality. In other words, there are multiple common-sense realities (Berger & Luckmann, 1967, p. 35). As a consequence, this form of social constructionism leads to relativist epistemology that has features of realism for those experiencing particular ‘common-sense’ realities. This occurs because both the subjective and objective dimensions of reality are dependent on the shared dimension. Such social relativity suggests that the total ‘reality’ of one individual is different from the total ‘reality’ of another. For example, when one meets a group of people who work together and they discuss work in one’s presence there are always words, euphemisms and abbreviations that are understood by the group but not by the individual who is not a member of the group. The individual often misses the meaning and the reality behind what is being discussed. Words and abbreviations are constructed by groups to enable them to share efficiently the phenomena they seek to discuss and they work in much the same way that language works. Thus, if one does not understand the language of the group, one will find it difficult to understand the meaning.

There are two further dimensions that influence the relativity of what is ‘real’ to groups and individuals: the temporal and the spatial dimensions of the social context (Bird, 1988; Bird & West, 1997; Fischer, Reuber, Hababou, Johnson, & Lee, 1997; Shackle, 1955; West & Meyer, 1997).

Time has an impact in two ways. First, time impacts on an individual’s ability to understand past human society and human interaction (Clark, 1985; Giddens, 1984). By separating an individual’s experience from the context, the relativity to the individual of the historic past is increased. Second, time has an impact on an individual’s present reality (Bird, 1992; Butler, 1995; Clark, 1985). Individuals exist only in the present and thus ‘knowledge’ accrued from the past is important in constructing one’s current view of ‘reality’. Individuals also interpret the ‘knowledge’ they gather, select, reject and accept some of it, forget much of it and unconsciously use ‘knowledge’ they sought to reject. The imprecise nature of this process indicates that every individual’s subjective reality is unique to some degree. As a consequence, therefore, reality for any individual is inextricably bound with the ‘now’ of their social context, their personal history and their access to common knowledge through language. The spatial dimension of reality also plays a similar role (Berger & Luckmann, 1967; Giddens, 1976). The relativity of ‘common-sense’ reality is increased because individuals experience everyday life only at the ‘here’ of the space surrounding their body. It is only possible for an individual to directly experience one space at one time; although clearly technology can play a part in widening a person’s access beyond their immediate spatial context.

The reality of everyday life, however, is not limited purely by these spatial and temporal contexts but embraces phenomena that are not present ‘here and now’. The shared dimension of reality enables us to transfer understanding and escape the spatial and temporal constraints of the subjective dimension. For example, language enables a person to transfer to another ideas and concepts about reality. People are able to understand and share this knowledge because they share an understanding of the symbols used. The implication is that we use language and symbols to escape the temporal and spatial features of our subjective reality. In doing so, however, an individual’s remoteness to a reality in which they were not directly involved is increased. In other words, experience in everyday life has different degrees of closeness and remoteness to different social realities (Butler, 1995). To conclude, there are a number propositions that define the social construction of reality.

• i) There are three dimensions of reality, the subjective reality, the objective reality and the shared reality (Berger & Luckmann, 1967).
• ii) An individual’s subjective reality is completely unique because each individual will experience different times and spaces (Butler, 1995).
• iii) There is an objective ‘material’ and ‘embodied’ reality but our understanding of it is limited by our senses (Schutz, 1967).
• iv) There is no objective ‘social’ reality because it is constructed from the objectifications used in language. This means that what appears to be objective in the social world is in fact a symbolic construct used to explain categories created by us to order our experiences (Garfinkel, 1967).
• v) Language, symbols and other mechanisms enable human beings to transcend, to some degree, the spatial and temporal features of subjective reality (Blumer, 1969) leading to some feelings of objectiveness in our ‘common-sense’ reality.
• vi) Remoteness or closeness in time and space to social reality will have an impact on how social situations are interpreted.
• vii) Individual human beings experience many social realities.
• viii) Significant relativity exists between everyday social realities.
• ix) Human groups and societies use language, symbols and other forms of communication to reduce the relativity that exists between everyday social realities (Berger & Luckmann, 1967) by creating collective interpretations.

Social construction of knowledge (epistemology)

The complexity of this position with regard to ‘common-sense’ reality inevitably leads to a relatively complex position regarding epistemology. In the social construction of knowledge, as applied here, the shared dimension of reality is the most important (Berger & Luckmann, 1967; Weick, 1969, 1995). Language is thus considered to be the repository of ‘knowledge’, although knowledge itself maintains its social and historical relativity (Garfinkel, 1967; Schutz, 1967). The first element of language is considered to be typificatory schemes that are shared by groups and can be transferred between generations. The transference of meaning through typifications also enables language to transcend the ‘here and now’ of face-to-face situations. This occurs because the anonymity of a typification increases with its distance from the ‘here and now’, its intimacy to the user and its individualization. For example, a work colleague can be typified as ‘a friend’, ‘a colleague’, ‘a lecturer’, ‘a man’ and ‘a happy type’. Each typification about the same person varies in relation to its anonymity. This creates the mechanism that allows language to escape the purely ‘here and now’ of face-to-face interaction because a person can talk about a ‘man’ and this can refer to a type that does not have to relate to the ‘here and now’ of a current social context. It can also enable language to convey ‘knowledge’ because the typification ‘man’ collects a group of observations together in a label. The label then allows these observations to be shared by the group in a habitual way. In other words, the observations enter into the group’s ‘common-sense’ reality and are accepted as taken for granted (Isabella, 1990). The construction of language is the repository of ‘knowledge’ because it builds increasingly complex typifications that can become more general and more specific. The combining of labels, from which habitual ‘knowledge’ has been acquired, enables language to transfer ‘knowledge’ to individuals who have no experiential ‘knowledge’ of something. As well as the introduction of new forms of typification into language, these labels can change meaning, depart from the common stock of a group’s ‘knowledge’ and have dual meanings and, as such, have a dynamic nature. ‘Knowledge’ about objective reality is thus held in language and learnt habitually by the members of a group or society who use that common language. There are a number of implications of this stance that can be highlighted (Schutz, 1967).

• i) ‘Common-sense knowledge’ is dependent on a group’s shared typifactory schemes, which are a form of ‘intersubjective’ reality.
• ii) These schemes are dynamic, undergo constant change and are dependent on the group’s usage (Isabella, 1990).
• iii) The vast majority of human ‘knowledge’ about objective reality is deposited in these typifactory schema (Blumer, 1969).
• iv) Most ‘knowledge’ is acquired in this habitual way. In using particular typifications, an individual acquires the human groups past observations and ideas without needing to be consciously aware of it.
• v) Typifactory schema allow human ‘knowledge’ to transcend the ‘here and now’ of an individual’s experience.
• vi) The complexity of typifactory schemes allows new ‘knowledge’ to be created from a combination of labels in a new way.

The second element of language that contributes to the construction of knowledge is the use of objects to signify the subjective state (Chell & Pittaway, 1998). The fact that an internal state can be objectified and communicated to others is also important; such objectifications can become signs. For example, the signs hot and irritable allow a person to communicate knowledge about their subjective state and these signs are detachable from the ‘here and now’ of their current context. Such signs and groups of signs, therefore, enable the internal state of an individual to be shared. A number further implications can be highlighted.

• i) Humans use objects to symbolize the subjective state (Blumer, 1969).
• ii) These objectifications have allowed the development of signs and symbols that represent the inner feelings, beliefs and thoughts of individuals (Pfeffer, 1993).
• iii) By developing such symbols humans have been able to detach individual internal ‘knowledge’ from its immediate context. Thus enabling ‘knowledge’ from an individual’s subjective reality to be available to others in the social group (Berger & Luckmann, 1967).
• iv) This detachment also enables an individual’s unique ‘knowledge’ to be capable of transcending their immediate social situation (Bougon et al., 1977).

In the social construction of knowledge these two principles allow knowledge to flow between the objective, subjective and shared realities and across time and space. First, typifications are observations of the external (objective) world that are grouped into types, categories and labels, and that transfer habitual knowledge between individuals and across generations. Second, significations are signs that communicate internal (subjective) feelings, emotions, ideas, beliefs and thoughts, and that enable an individual’s subjective reality to be available to others and across time and space. These two types allow ‘knowledge’ about objective and subjective reality to be shared and, therefore, the assumption made by the social construction of knowledge is that knowledge resides in language, in the construction of language and in its use (Weick, 1969, 1995).

This assumption suggests that knowledge is both relative and universal (real). Knowledge is relative for two reasons. First, all individuals will have experienced different spatial and temporal contexts and will have drawn knowledge from these contexts differently. This knowledge and experience is processed by individuals, which adds further relativity, and is shared with the human group (the process of communication also adds a degree of relativity). Second, knowledge is relative because the typifications and significations used by a human group will be unique to that group.¹ To a degree, knowledge is also universal because typifications and significations enable us to share knowledge habitually (and consciously). ‘Knowledge’ that resides in language (habitual knowledge), therefore, is automatically available to all members of a social group who share the same language and hence universal to the members of that community.

The social construction of human behavior

As a consequence of assumptions made about reality and knowledge, a number of principles about the social construction of human behavior can be identified. Such assumptions about behavior can be developed from work on the social construction of personality (Hampson, 1982), ideas about the nature of choice (Shackle, 1979) and implications from other works on social constructionism (Berger & Luckmann, 1967;Fischer et al., 1997; Garfinkel, 1967; Giddens, 1976; Isabella, 1990; Nightingale & Cromby, 1999; Parker, 1998; Pfeffer, 1993; Schutz, 1967; Weick, 1995).

The three dimensions of reality highlighted have a differential impact on assumptions about human behavior. The subjective dimension leads to assumptions from psychology and economic psychology about the nature of internal processes, including modes of thought, the acquisition of belief systems and the processes involved in individual choice. The objective dimension leads to assumptions about how individuals observe and interpret the external world including theories about the senses. The shared dimension leads to assumptions derived from social psychology, sociology, ethnography and linguistics and includes views about how individuals interact within groups, how they construct language and how language transfers meaning. A theory of the social construction of human behavior, therefore, is likely to be extremely complex and so here we introduce only some of the key assumptions.

Every individual’s subjective reality, which exists inside them, in social constructionism is clearly considered to be unique. Individuals have experienced different times and spaces, have drawn different information from these social contexts and have interpreted that information in different ways. An individual’s unique past experiences (or stock of experience), therefore, will have an impact on their values, beliefs and motivations. It will also mean that how individuals assess social situations, how they choose to draw information from these social situations and how they interpret and store this information will have an impact on their future behavior. In other words, the influences behind an individual’s internal values, beliefs and knowledge lead to ‘limitations’ on the number of possible choices in any given situation. The sheer complexity of the influences, the number of possible behavioral strategies that they lead to and the fact that these are unique for each individual effectively result in social constructionism of an assumption of ‘non-determinant’ behavior (Chell, 1997, 2008; Hampson, 1982).

Such non-determinism has an impact on an individual’s capacity to interpret the objective world, as well as their social environment. Understanding of the external environment is dependent on the typificatory schemes used by social groups. These typifications will only transfer habitual knowledge that has become accepted within the group. The behavioral strategies and choices open to an individual, therefore, may be dependent on the residual knowledge of the communities of which they are a part. In other words, one cannot act to make profit if no concept of profit exists within the residual knowledge of the community within which one lives (unless the concept is gained from a different community). Even if a concept exists an individual’s past experience may influence their ‘ranking’ of the ‘pursuit of profit’ as a potential behavioral strategy and influence their choice. Thus, what an individual perceives as the potential outcomes of certain behaviors will have weight in their choice of behavior. There are, therefore, some identifiable assumptions within the social construction of human behavior.

• i) An individual’s past experiences may influence the strategies of behavior they believe are open to them.
• ii) An individual’s ‘knowledge’ or information about the external social environment may depend on the methods they use to accumulate and interpret external stimuli.
• iii) Individuals may have many but not an unlimited number of possible behavioral strategies in any given situation.
• iv) The influences on an individual’s choice of behavior may be unique to each individual and the social context in which behavior occurs.
• v) An individual’s habitual knowledge may be dependent on the communities of which he/she is a member and this may restrict the behavioral strategies and choices available.
• vi) Individuals have access to many behavioral strategies known within the community of which they are apart
• vii) The community’s ‘culture’ (i.e. how certain behaviors are rewarded or discouraged) may have an impact on how an individual considers the value of possible choices.
• viii) The individual’s perception of outcomes may enter into their choice of behavior.

Social reality is constructed by groups during interaction and is passed across generations by the use of a community’s language. The coordinates for life within a social group, particularly expectations about appropriate and inappropriate behaviors in social constructionism, reside in language (Chell, 1997, 2008). Language and the stories used by a community communicate the community’s expectations about accepted behaviors. These expectations are also fairly complex because most individuals interact with many communities and many levels of community. As a result, individuals may choose to adapt their behaviors and choices in different communities dependent on those community’s expectations (Biddle & Edwin, 1966) or rebel against a community’s expectations because they are aware (or can imagine) other approaches. It is also evident that individuals can choose to pursue behaviors deemed unacceptable in their community even when not influenced by expectations from somewhere else.

In social constructionism, an individual’s remoteness or closeness in time and space to social reality also impacts on their choice of sustained behavior (Fischer et al., 1997; West & Meyer, 1997). Closeness or remoteness can impact on the objectives that an individual deems as achievable and desirable as they have more awareness of behaviors that need to be employed to gain their desired outcomes (Shackle, 1955). This awareness may be dependent on the individual’s ability to accumulate and interpret information from their social environment, their ability to imagine new outcomes and the availability of information in their social environment (Shackle, 1955). For example, in the modern world an individual’s opportunities are likely to be wider than in the past because improved communication technologies make more people aware of a greater number of possible objectives of sustained behavior. Such awareness can lead to greater choice. Choice of outcomes is further increased by an individual’s ability to imagine new outcomes (Shackle, 1979). Imagination and intuition are important in the process because individuals can put together their unique internal ‘knowledge’ in new ways and externalize these thoughts to others. In doing so, new ‘knowledge’ can be created because of the uniqueness of each person’s subjective reality, the mental processes being exercised on this ‘knowledge’ and the ability to share this ‘knowledge’ with others. A number of further principles guiding the social construction of behavior can, therefore, be illustrated.

• i) The expectations of a community often reside in its language, metaphors and stories.
• ii) Individuals experience many communities and levels of community and, as a result, may experience conflicting expectations that lead to many possible behavioral strategies. As a consequence individuals can choose from many potential options in any social context.
• iii) Knowing about a behavioral strategy also allows an individual to rebel against and choose not to follow an expected community norm.
• iv) An individual’s awareness of the prior outcomes from options pursued by others may influence their confidence of their success if they pursue the same option.
• v) An increase in the availability of information from other communities increases an individual’s awareness of options and their perception of outcomes.
• vi) Imagination allows individuals the ability to identify ‘new’ potential objectives for sustained behavior that fall outside those currently available to their immediate social group (Shackle, 1979).
• vii) Individual thought processes, the uniqueness of each individual’s subjective reality and the ability to externalize this ‘knowledge’ via language contribute to a community’s ability to produce entirely ‘new’ options for behavior never before considered by the community of which the individual is a part.

The principles underlying the social construction of human behavior present a complex situation of non-deterministic behavior. In this view, behavior is essentially about choice, although at the same time this is not an assumption of ‘free will’, where an individual has no restrictions placed on what they can choose. In social constructionism, individuals can make choices about their actions but these choices are bounded by certain restrictions. Choice of a particular action is dependent on an individual’s awareness that such an action is possible. It is restricted by the weight an individual gives to a particular course of action, which is informed by perceptions of its appropriateness derived by community acceptance. Choice is also restricted by an individual’s ability to interpret their social environment; their specific social context at the time of the decision; the culture of the groups they interact with; their own cognitive skills; the habitual knowledge available in the communities in which they live and their capacity to imagine new choice options beyond those available in their immediate social context. These restrictions may limit an individual’s awareness of possible objectives for behavior and restrict their knowledge of behavioral strategies and as such behavior is deemed to be socially constructed. Even with these restrictions, however, there are many behavioral strategies open to an individual in any social context. The individual may choose a desired outcome for behavior and choose a strategy of behavior that they believe will achieve the outcome they desire. As a consequence, therefore, an understanding about the nature of choice becomes essential when explaining ‘entrepreneurial’ behavior (Shackle, 1979) and so next we will explore social constructionist approaches in entrepreneurship.

The debate: origins

For Kirzner (1971, 1973), opportunities exist in the market, and the role of the entrepreneur is to discover them. For Shackle (1979), opportunities are ‘imagined,’ that is, opportunities are constructed in the entrepreneur’s imagination, they are created, and thus cannot exist independent of the entrepreneur. Given entrepreneurship theories’ strong roots in economics, these two thoughts are a logical extension of competing views over uncertainty, a central concept in economics. White (1976, p. 91) summarized this issue as follows:

More than four decades later, the entrepreneurship community is still strongly divided between discovery theorists who, following Kirzner, view opportunities as objective phenomena (Carsson, 1982; Shane & Venkataraman, 2000), and creation theorists who, akin to Shackle, view opportunities as subjective and inter-subjective, or the product of a process of social construction (Alvarez & Barney, 2007, 2010; Baker & Nelson, 2005; Fletcher, 2006; Wood & McKinley, 2010). The debate is thus primarily ontological, based on a disagreement over the very nature of opportunities. The objectivist position holds that opportunities exist in the “real” world (Suddaby, Bruton, & Xi, 2015). The subjectivist view links the existence of opportunities to the entrepreneurs’ perception or imagination of a possible or envisioned future (Venkataraman et al., 2012; Wood & McKinley, 2010).

Opportunity research thus covers the full spectrum of ontological and epistemological domains ranging from the positivist-realist to the subjectivist-constructivist positions (Dimov, 2011). As such, opportunity research builds on a multitude of – often competing – assumptions, informed by numerous philosophical roots. Recent conversations have taken place that seek to better bring to the fore those assumptions and their implications on predictions about entrepreneurial opportunities and effectiveness (Alvarez & Barney, 2007; Dimov, 2011; Fletcher, 2006; Sarasvathy, Dew, Velamuri, & Venkataraman, 2003; Venkataraman et al., 2012). This thread of conversation has served not only to draw our attention to the multitude of scientific roots informing entrepreneurship research in general, and entrepreneurial opportunities research in particular, but also to better identify and account for the assumptions they build upon. As Lindgren and Packendorff (2009, p. 25) further noted, these have the notable result to “exclude and include different research questions and phenomena.” This effort is critical to developing a more comprehensive research stream. More specifically, it has led to the acknowledgment that the variety of predictions over opportunity formation and emergence is a product of the different assumptions discovery and creation theories build upon (Alvarez & Barney, 2010, 2013; Dimov, 2011; Sarasvathy et al., 2003; Shane, 2012; Suddaby et al., 2015; Venkataraman et al., 2012). For instance, when Alvarez and Barney (2007) compare the objectivist-discovery view to the evolutionary realist-creation perspective, they identify three major assumptive tensions: the nature of opportunities, the nature of entrepreneurs, and the nature of decision-making. The authors further describe how these different assumptions impact predictions about the effectiveness of seven major entrepreneurial actions – leadership, decision making, human resource practices, strategy, finance, marketing, and sustaining competitive advantages (Alvarez & Barney, 2007, p. 136). On a similar vein, Wood and McKinley (2010) show that when opportunity research builds on a social constructivist-creation vs. an objectivist-discovery perspective, consensus building stands as a central factor in the formation and exploitation of opportunities. There is agreement, though, that while discovery and creation theory are strikingly different, they do converge in their efforts to explain the same dependent variable, namely the actions entrepreneurs take and the results of these actions on opportunity formation and exploitation (Alvarez & Barney, 2007). Next, we explain how a social constructionist-creation perspective diverges from the objectivist-discovery position, and the implications of these different views on three main opportunity research domains – the relationship between entrepreneurs and their environment, the nature of opportunities, and the actions of entrepreneurs and researchers.

Opportunity discovery vs. creation: assumptions and implications

Positivism assumes realist ontology of a world ‘out there’ which exists independent of those who observe it. Objects have inherent meanings which are there to be discovered. Under this view, reality is external, objective and independent of social actors. Conversely, constructionism views reality as subjective, socially constructed, multiple and changing. Of note and as previously highlighted, constructionism does not deny the existence of a reality ‘out there’; it does, however, question the existence of social reality independent of actors. Indeed, the meaning given to reality, under the constructionist view, is argued to be subjectively and inter-subjectively constructed. The ontological claim of reality as ‘truth’ is thus challenged as reality is viewed, instead, as multiple because constructed by actors according to their own worldviews. Reality is also changing as it is shaped by the constant interactions of actors with their environment. We identify and discuss three main domains where these different views about reality become reified, and result in strikingly different predictions.

Entrepreneurs and their environment

Discovery theory is strongly rooted in a deterministic view whereby individuals and environments exist independently of each other (Fletcher, 2006; Lindgren & Packendorff, 2009). The external environment is not only distinct from, but more importantly, more agentic than the entrepreneur (Suddaby et al., 2015; Wood & McKinley, 2010). Under this view, opportunities sit in the environment, and the only agentic process attributed to entrepreneurs is their ability to discover and exploit opportunities (Shane & Venkataraman, 2000). Conversely, the main tenet of – and insight from – social constructionism is that the environment and the entrepreneur are inter- and co-dependent. Following Berger and Luckmann’s (1967) and Giddens’ (1984) theories, entrepreneurs shape and are shaped by their environment, and as such, their co-evolution and co-existence is the result of these iterative relationships (Alvarez & Barney, 2007; Fletcher, 2006; Gaglio & Katz, 2001; Gartner, Carter, & Hills, 2003). The environment, under this view, is less concrete and inflexible and more amenable to being reconstructed (Fletcher, 2006; Suddaby et al., 2015). Importantly, the boundary between entrepreneurs and their environment is less distinct and the degree of agency between entrepreneurs and environment is more evenly distributed than under the discovery view (Suddaby et al., 2015). This perspective is thus particularly useful to illuminate our understanding of how entrepreneurs create opportunities.

These different assumptions about the relationship between entrepreneurs and their environment have sweeping implications not only on the direction of the relation between entrepreneurs and opportunities, but also, by extension, on the task of the researcher – a point we will later elaborate upon. Indeed, if opportunities wait to be discovered, the relationship of interest is that which brings the entrepreneur to the opportunity, a unilateral relationship described by Weick (1979) as “bringing agency to opportunities.” This is because the entrepreneur, under this view, is “a detector to an external phenomenon that would exist whether or not the entrepreneur was present to record it” (Wood & McKinley, 2010, p. 79). Under the constructionist assumption that the relationship between entrepreneurs and their environment is not only bilateral, but more importantly iterative, the direction of interest goes both from the entrepreneur to the environment and from the environment to the entrepreneur. The latter is best defined by Wood and McKinley (2010, p. 79), who view the entrepreneur as “an influence agent, seeking to generalize an idea about an opportunity by creating consensus about its viability.” When the directional arrow goes from the entrepreneur to the environment, it is generally to stress how entrepreneurs are conditioned by their institutionalized beliefs (Dimov, 2007).

The origins of opportunity

Disagreement over the very nature of the relationship between entrepreneurs and their environment results in another tension over the origin of opportunities. In discovery theory, opportunities are exogenous, originating from markets imperfections (Alvarez & Barney, 2007; Fletcher, 2006; Foss & Klein, 2017; Kirzner, 1973; Suddaby et al., 2015). Because agency is placed on the environment, it is only from changes in the environment that opportunities will emerge, notably changes in technology, consumer preferences, and, more generally, in the political, social, or economic context within which markets exist.

This view is strongly challenged by social constructionists, as changes in the environment are posited as acted and influenced by individuals and groups themselves (Berger & Luckmann, 1967; Giddens, 1984). Furthermore, because entrepreneurs and environment are co-evolving, claims about the exogenous nature of opportunities are strongly questioned. If, as posited by creation theory, opportunities do not exist without the entrepreneur (Wood & McKinley, 2010), opportunities are thus endogenous; they are the product of entrepreneurs’ interpretations of their environment, as well as of negotiations between entrepreneurs and their environment as they seek to enact their imagined opportunities (Baker & Nelson, 2005; Bhide, 1999; Fletcher, 2006; Sarasvathy, 2001). In sum, entrepreneurs, under this view, “do not wait for exogenous shocks to form opportunities and then provide agency to those opportunities, they act” (Alvarez & Barney, 2007, p. 17). For instance, Hargadon and Douglas (2001) chronicle the ways Edison socially constructed the conditions for consumer acceptance of the electric light bulb.

What entrepreneurs and researchers do in discovery vs. creation theory

In discovery theory, because opportunities exist out there, waiting to be discovered, the main task of the entrepreneur is to discover and exploit them (Alvarez & Barney, 2007; Shane & Venkataraman, 2000). Under this view, then, variance lies in individuals who can be separated into two groups: the entrepreneurs, that is, those who are capable of discovering and exploiting opportunities, and the non-entrepreneurs, that is, those who cannot. This distinction between entrepreneurs and non-entrepreneurs has led to the emergence of the concept of alertness developed by Kirzner (1973) to stress that the role of entrepreneurs lies in their alertness to unnoticed opportunities (see also Yu, 2001, p. 48). Research in the discovery view is thus focused on variance, primarily concerned with uncovering systematic differences between entrepreneurs and non-entrepreneurs (Alvarez & Barney, 2007), notably factors such as individual traits, including degrees of alertness, or differential access to opportunities (Wood & McKinley, 2010). The trait approach (Cole, 1969; McClelland, 1961) has thus dominated entrepreneurship research seeking to solve the question “Who is an entrepreneur?” (Gartner, 1989; McKenzie, Ugbah & Smothers, 2007) and as has been highlighted previously falls into the traps common to trait-based personality theory (Pittaway & Tunstall, 2016).

In creation theory, the task of the entrepreneur is less deterministic and passive as the entrepreneur is portrayed as engaged in an iterative relationship with his/her environment (Alvarez & Barney, 2007; Fletcher, 2006). The iterative nature of this relationship stems from the social constructionist notion that agency is as much on the side of the environment as it is on the side of the entrepreneur (Fletcher, 2006; Suddaby et al., 2015). Under this view, then, the entrepreneur acts and re-acts: as the entrepreneur seeks to enact his/her imagined opportunity, s/he relies on the environment’s responses to his/her actions (Alvarez & Barney, 2007) to move the opportunity from the status of imagined to the status of “real”, that is, objectified and external (Berger & Luckmann, 1967; Fletcher, 2006; Sarasvathy, 2004; Wood & McKinley, 2010).

Research in the creation view is thus concerned with the becomingness of the opportunity, that is, the process through which the imagined opportunity becomes objectified. Process, instead of variance, is privileged in opportunity creation research. The researcher will ask process questions (Lindgren & Packendorff, 2009), such as “How do things go on?” (Fletcher, 2006), “How does action by entrepreneurs create opportunities?” or “How can entrepreneurs use incremental, iterative, and inductive processes to make decisions?” (Alvarez & Barney, 2007, p. 22). Importantly, a focus on processes draws researchers’ attention to the relationship between entrepreneurs and their environment. Given that this relationship is viewed as iterative, research in the creation view can be summarized in three main streams. First, studies may investigate institutionalized belief systems and how those systems influence the development of opportunities (Dimov, 2007). Kostova (1997), for instance, examines several countries’ institutional profiles to show how institutions in these countries constrain or enable entrepreneurship and shape entrepreneurial orientation. This top-down perspective is complemented by a bottom-up view whereby individuals act upon their environment to enact their imagined opportunities. In this second stream, researchers will seek to uncover the “corridors” individuals construct “from their personal experiences to stable economic and sociological institutions” (Sarasvathy, 2004, p. 289), i.e., the actions entrepreneurs develop to link their ideas to existing social structures. Finally, studies in the third stream take a more holistic perspective and are interested in understanding how entrepreneurs and their environment co-evolve. These studies are typically found in the structuration tradition. For instance, Sarason, Dean and Dillard (2006) and Chiasson and Saunders (2005) use Giddens’ (1984) structuration theory to show how opportunities are the result of an ecology of interactions and negotiations between entrepreneurs and their institutional environment.

These differences in research emphasis can thus be summarized as either variance or process research, with the notable implication that the preferred methodological approach and level of analysis will vary accordingly. Indeed, an emphasis on variance – between entrepreneurs and non-entrepreneurs – in the discovery view, generally calls for quantitative analyses, and tends to focus on the micro-level of the entrepreneur. Conversely, interest on process – through which the imagined opportunity becomes objectified – in the creation view, calls for longitudinal, qualitative methods, and is more generally focused on the higher levels of analysis.