How Do Entrepreneurs Respond to a Crisis? Approach-Avoidance and Broaden-and-Build Perspective

Abstract

In the face of a crisis, some entrepreneurs seek opportunities to thrive, whereas others strive to protect themselves from threats to survival. Curiously, there has been little examination of when and how entrepreneurs respond differently to an entrepreneurial crisis, defined as an unanticipated, impactful, and urgent event in an entrepreneur’s business operations. We posit that entrepreneurs respond in either a positive manner through creatively combining resources at hand (i.e., bricolage) or a negative manner through violating ethical values to protect the venture’s short-term interest (i.e., unethical pro-organizational behavior or UPB). Drawing upon approach-avoidance motivation and broaden-and-build theory, we examine when and how an entrepreneurial crisis leads to these different responses. We conducted a five-month longitudinal study of 100 entrepreneurs (482 observations). We found that when entrepreneur’s approach motivation was high rather than low, entrepreneurial crisis was related to an increase in bricolage and a decrease in intention to quit via increased interest. On the other hand, when entrepreneur’s avoidance motivation was high rather than low, entrepreneurial crisis was related to an increase in UPB and intention to quit via increased anger. Our study advances research on entrepreneurial responses to crisis by showing when entrepreneurs respond creatively or unethically and the associated mechanisms of these responses.