Summary

Unexpected events are common and critical, but scholarly understanding of how entrepreneurs cognitively cope with them is relatively limited. “Entrepreneurial re-action” is a cognitive mechanism that entrepreneurs use to navigate the unexpected. It is used to reflect changes in the entrepreneur’s mental frame, such that the direction of action and, in some cases, the target for action are recast. Triggering these changes are variations in unexpected events as a distinct set of new developments linked to entrepreneurs’ projects. Specifically, unexpected events vary in their source, valence, magnitude, and duration, which serve as elements that call into question entrepreneurs’ assessments of the desirability and feasibility of their endeavors and influence the likelihood of entrepreneurial reaction. From this base, three cognitive pathways—assimilation, accommodation, and replacement—are central to the concept of entrepreneurial reaction. Assimilation involves integrating new information into existing mental frameworks with minimal change. Accommodation requires a more substantial restructuring of these frameworks to incorporate new realities. Replacement is the most drastic form of reaction, involving the abandonment of the original framework and the creation of a new one. Each path influences the action trajectories that entrepreneurs plan and/or execute. Conceptualizing entrepreneurial reaction as a distinct process provides a basis for understanding how entrepreneurs manage uncertainty and complexity in their environments.