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Entrepreneurship and organization theory can both benefit from a mutual exchange to theorize on a number of topics. One such topic is organizational responses to adversity. In this paper, we theorize by abstracting across highly contextualized papers on entrepreneurship’s role in responding to adversity and propose that entrepreneurial action, such as the creation of new ventures, performs a different function depending on whether the adversity is an event or a persistent state. Specifically, we theorize that entrepreneurial action performs the role of an equilibrating mechanism when adversity is an event, such as an earthquake that kills thousands of people and injures many more, business failure, and perhaps the Covid-19 pandemic, and performs the role of a disequilibrating mechanism when adversity is a persistent state, such as for poor farmers in rural India, women in patriarchal communities in Bangladesh, and perhaps the Covid-19 pandemic. We then explore the possibilities of entrepreneurship for both equilibrating and disequilibrating adversity and offer some future research opportunities that we believe can make important contributions to organization theory and the entrepreneurship literature.

Entrepreneurship responding to adversity: Equilibrating Adverse Events and Disequilibrating Persistent Adversity