David Gras’s research while affiliated with The University of Tennessee Medical Center at Knoxville and other places

We explain how the nature of "wicked" social and environmental problems affects the way in which beliefs about opportunities to solve them are formed, and why these beliefs often prevent prospective entrepreneurs from correctly judging not only the feasibility of acting on them, but whether such an opportunity exists at all. We argue that, in the context of wicked problems, prospective entrepreneurs are prone to succumb to the reductive tendency; a cognitive process through which individuals learning about and interpreting complex phenomena overly simplify their understandings of the phenomena. This undue simplification drives the formation of non-opportunity beliefs (Type I errors). We further offer knowledge as an attenuating factor in the manifestation of the reductive tendency and, by extension, the formation of non-opportunity beliefs. Our theorizing has implications for the literature on entrepreneurial opportunities, knowledge, social entrepreneurship, and the entrepreneurship literature more broadly. Executive Summary Wicked problems persistently cause human suffering, endanger wildlife, and degrade the environment. They are notoriously difficult to solve because of interrelated and mutually reinforcing characteristics that they all share. We explain how the nature of wicked problems affects the way in which beliefs about opportunities to solve them are formed, and why these beliefs often prevent prospective entrepreneurs from correctly judging not only the feasibility of acting on them, but whether such an opportunity exists at all. Drawing on this research context we also help explain how unfounded entrepreneurial opportunity beliefs are formed more broadly. That is, prospective entrepreneurs making the Type I error of falsely identifying an opportunity when there is none. We draw on the 'reductive tendency', a process through which individuals simplify complex systems into cognitively manageable representations. While simplified representations offer benefits, such as quicker decision-making, such representations are often inaccurate as they overlook the complexities of the problem at hand. We argue that the reductive tendency can make wicked problems appear easier to solve than they are in reality, leading to the formation of what we call non-opportunity beliefs; the conviction that one can solve a problem, when in fact the objective conditions required to do so are absent. We further argue that prior experiential knowledge makes an entrepreneur less susceptible to the reductive tendency and, consequentially, less likely to form a non-opportunity belief. Our work offers contributions to both theory and practice. We extend the critical realist perspective on non-opportunities by explicating the mechanisms through which non-opportunity beliefs are formed. We further introduce and conceptualize problem uncertainty as a specific form of state uncertainty where the exact definition, boundary conditions, and causes of a problem are unknown or unknowable. This offers a more focused conceptualization of the uncertainty inherent to wicked problems that also specifically identifies problems as the starting point of all entrepreneurial opportunity. Our theorizing is also of practical importance since, in the context of socially/environmentally focused entrepreneurship, ill-conceived attempts to address wicked problems can have serious negative consequences for people and ecosystems that are already among the most vulnerable.

We explain how the nature of "wicked" social and environmental problems affects the way in which beliefs about opportunities to solve them are formed, and why these beliefs often prevent prospective entrepreneurs from correctly judging not only the feasibility of acting on them, but whether such an opportunity exists at all. We argue that, in the context of wicked problems, prospective entrepreneurs are prone to succumb to the reductive tendency; a cognitive process through which individuals learning about and interpreting complex phenomena overly simplify their understandings of the phenomena. This undue simplification drives the formation of non-opportunity beliefs (Type I errors). We further offer knowledge as an attenuating factor in the manifestation of the reductive tendency and, by extension, the formation of non-opportunity beliefs. Our theorizing has implications for the literature on entrepreneurial opportunities, knowledge, social entrepreneurship, and the entrepreneurship literature more broadly. Executive Summary Wicked problems persistently cause human suffering, endanger wildlife, and degrade the environment. They are notoriously difficult to solve because of interrelated and mutually reinforcing characteristics that they all share. We explain how the nature of wicked problems affects the way in which beliefs about opportunities to solve them are formed, and why these beliefs often prevent prospective entrepreneurs from correctly judging not only the feasibility of acting on them, but whether such an opportunity exists at all. Drawing on this research context we also help explain how unfounded entrepreneurial opportunity beliefs are formed more broadly. That is, prospective entrepreneurs making the Type I error of falsely identifying an opportunity when there is none. We draw on the 'reductive tendency', a process through which individuals simplify complex systems into cognitively manageable representations. While simplified representations offer benefits, such as quicker decision-making, such representations are often inaccurate as they overlook the complexities of the problem at hand. We argue that the reductive tendency can make wicked problems appear easier to solve than they are in reality, leading to the formation of what we call non-opportunity beliefs; the conviction that one can solve a problem, when in fact the objective conditions required to do so are absent. We further argue that prior experiential knowledge makes an entrepreneur less susceptible to the reductive tendency and, consequentially, less likely to form a non-opportunity belief. Our work offers contributions to both theory and practice. We extend the critical realist perspective on non-opportunities by explicating the mechanisms through which non-opportunity beliefs are formed. We further introduce and conceptualize problem uncertainty as a specific form of state uncertainty where the exact definition, boundary conditions, and causes of a problem are unknown or unknowable. This offers a more focused conceptualization of the uncertainty inherent to wicked problems that also specifically identifies problems as the starting point of all entrepreneurial opportunity. Our theorizing is also of practical importance since, in the context of socially/environmentally focused entrepreneurship, ill-conceived attempts to address wicked problems can have serious negative consequences for people and ecosystems that are already among the most vulnerable.

Research Summary Our study generalizes and extends a cumulative body of research on diversification into the contexts of social entrepreneurship. We examine the extent to which internationalization and program diversification affect a coveted, yet understudied, outcome for social organizations—revenue diversification—and investigate efficiency as a boundary condition of those relationships. Our longitudinal analyses, based on roughly 53,000 observations of Canadian nonprofits that engage in social entrepreneurship, indicate that program diversification is positively related to nonprofits' revenue diversification, but internationalization is not. Further, we found that efficiency compliments these relationships. Our findings are partially in line with research from the for‐profit literature, but also extend this line of research by suggesting that different types of diversification are associated with revenue diversification in the context of social entrepreneurship. Managerial Summary Founders, executives, and managers of social organizations often strategically design and implement programs and internationalization strategies to achieve better organizational outcomes. Our results reveal that pursuing program diversification opportunities are related to revenue diversification and that highly efficient nonprofits are more likely to increase their revenue diversification as they pursue more program diversification and internationalization opportunities. Social entrepreneurs and their organizations may therefore learn from, build upon, and to some degree tailor theories and strategies of for‐profit organizations to better serve their social and environmental mission and ensure long‐term financial stability.

We use a mixed methods design to investigate the relationship between scope and performance within nonprofits and under varying conditions of environmental dynamism, munificence, and complexity. Prior strategy research on for-profit organizations suggests that relatively high levels of environmental dynamism and complexity attenuate the negative relationship between scope and performance, while greater munificence reinforces it. Our longitudinal quantitative study of approximately 63,000 Canadian nonprofits suggests the opposite: greater dynamism reinforces the negative relationship, and munificence bears no definitive effect, indicating that certain task environment effects on the scope-performance relationship manifest uniquely for organizations pursuing social over economic value creation. We then conduct qualitative interviews with nonprofit executives to explore in greater detail the probable mechanisms that underpin these relationships, highlighting three-nature of mission, scarcity of human capital, and competitive tension in collaboration. We offer several contributions to theory and practice regarding the relationship between nonprofit scope and performance.

We examine whether and when socially oriented shareholder activists use firms’ corporate social performance (CSP) to identify them as attractive targets for their activism. We build on the research in social movements theory and stakeholder theory to theorize how firms’ engagement with primary and secondary stakeholders reflected in their technical and institutional CSP respectively allows socially oriented shareholder activists to identify targets. We develop a theoretical model by identifying corporate targets’ degree of (1) receptivity to and (2) need to comply with activist demands as two key dimensions of their corporate opportunity structure that explains the variance in firms’ attractiveness as targets for activist demands. We show that a firm’s technical and institutional CSP independently affect the likelihood of activists targeting the firm. We also show that our model has greater explanatory power at firms with high resource slack and from activists not identifying as socially responsible investment funds. Analysis of CSP and shareholder proposals data of 992 U.S. public firms over an 8-year window of observation largely supports our theory.