Resilience as a Capability or Capabilities

Resilience Capabilities in Entrepreneurship Research

The capabilities approach to resilience has been utilized in several studies of entrepreneurial resilience. Using this perspective, some have chosen to examine entrepreneurial resilience and its role in weathering adversity. In this vein, Bullough, Renko, and Myatt (2014) defined resilience as “an ability to go on with life or to continue living a purposeful life after hardship or adversity” (p. 474). It is through this lens that they studied the relationship between resilience, entrepreneurial self-efficacy, and entrepreneurial intentions among potential entrepreneurs in Afghanistan. This context can be considered one of severe adversity for entrepreneurs, due to the poor infrastructure and prevalence of crime and violence. The authors argued that because resilient individuals have a propensity to work proactively to solve challenges, resilient individuals facing such severe adversity should be more likely to start a new venture to alleviate some of the constraints imposed upon them by that context. Indeed, Bullough et al. (2014) found that resilience is positively related to entrepreneurial intentions and that resilience also positively moderates the relationship between entrepreneurial self-efficacy and entrepreneurial intentions. They operationalized resilience using the Brief Resilience Coping Scale (Sinclair & Wallston, 2004), which asks respondents how various means of coping align with what they typically do when experiencing a difficulty or loss. In other words, this scale, consistent with the authors’ definition, measures the potential for resilience.

In a similar study of entrepreneurs’ ability to weather adversity, Chadwick and Raver (2018) conceived of resilience as a psychological resource or individual capacity. Their study explored the impact of resilience over time in a set of nascent entrepreneurs involved in a start-up program. They hypothesized and found that, because resilient individuals have a tendency to appraise adversity as a challenge that they have the skills to overcome, and because they are more likely to take proactive measures to solve business problems, they should also have higher venture survival rates. They operationalized resilience using part of the Resilience Scale (Wagnild & Young, 1993) which measures behavioral and psychological tendencies such as whether the respondent generally “has self-discipline” and “takes things in stride.” This is also consistent with the definition of resilience as a set of capabilities. In sum, the study demonstrates that the ventures of entrepreneurs who generally display resilient behaviors and cognitions are more likely to survive (Chadwick & Raver, 2018).

An additional article has examined entrepreneurs’ resilience in the face of business failure using the capabilities approach. Hayward et al. (2010) constructed a theoretical model suggesting that confident entrepreneurs will be more likely to start another business after experiencing a failure because of their resilience resources. They proposed that confident individuals experience positive emotions even in the face of failure. These positive emotions help them build resilience resources, including emotional, cognitive, financial, and social resources. These resilience resources make confident entrepreneurs better able to found a subsequent venture, and therefore more likely to do so (Hayward et al., 2010). Although Hayward et al. (2010) did not operationalize resilience in any particular way, as their model is theoretical, they argued that confidence helps to build the capabilities and resources that comprise emotional, social, and financial resilience, and that these capabilities and resources, in turn, influence the ability and likelihood of such entrepreneurs to start again.

In summary, the capabilities approach to resilience has been adopted in empirical and theoretical investigations of entrepreneurial resilience. This has yielded important insights, such as the fact that resilience is positively related to entrepreneurial intentions in conditions of adversity and that entrepreneurial resilience can even foster business survival. Although the capabilities approach focuses on behavioral and cognitive tendencies associated with resilience, it may be especially useful in empirical research as it provides a convenient way to assess resilience, even in the absence of present adversity. This approach may also be useful to those studies seeking a better understanding of the antecedents and consequences, both good and bad, of such resilience-related tendencies.

In the future, research on entrepreneurial resilience could identify other capabilities that are associated with resilience. For example, Fisher, Stevenson, Burnell, Neubert, and Kuratko (2020) developed the concept of “entrepreneurial hustle,” which they defined as “an entrepreneur’s urgent, unorthodox actions that are intended to be useful in addressing immediate challenges and opportunities under conditions of uncertainty” (p. 1012). It seems plausible that a capacity for this type of behavior would be essential in helping an entrepreneur to move forward from a challenge or setback. This could be one among several possible capabilities associated with entrepreneurial resilience that are yet to be theoretically defined and empirically explored.

Resilience as a Process

Resilience Processes in Entrepreneurship Research

Shepherd, Saade, and Wincent (2020) conducted a qualitative study of entrepreneurship and resilience in conditions of persistent adversity. Their research is notable in that it examines a number of aspects of resilience, including resilience outcomes. However, of particular interest in this section is the fact that Shepherd et al. (2020) discovered that adversity prompts some individuals to act entrepreneurially, and that entrepreneurship, in turn, may lead to resilience outcomes. Therefore, entrepreneurship becomes a part of the process of responding to adversity and serves as a mechanism of resilience. Shepherd et al. (2020) conducted a qualitative study of Palestinian individuals living in Lebanon, both inside and out of refugee camps. Some of these refugees were prompted to start their own businesses because of the vocational constraints placed on them in the country they were forced to flee to. They noted that those refugees who acted entrepreneurially worked to overcome the numerous constraints placed on them and also were often motivated to start and run their business to help fellow refugees. As a result of engaging in entrepreneurship, these individuals were able to realize resilient outcomes such as self-reliance and proactive problem-solving. Entrepreneurship also served as a mechanism of resilience in that it allowed these entrepreneurs to create additional social network connections. This, in turn, also led to resilient outcomes (Shepherd et al., 2020). Again, entrepreneurship was part of the process of responding to adversity, and served as a mechanism of resilience for some refugees. This research exemplifies the idea of resilience as a process because it analyzes qualitative accounts of the actions taken by individuals to overcome a specific type of adversity and also recognizes the recursive nature of resilience processes and outcomes.

Similarly, Williams and Shepherd (2016) studied individuals’ responses to the Black Saturday bushfires in Australia. In particular, they examined how the human capital of survivors impacted their ability to realize resilient outcomes after the disaster. The researchers discovered that only when individuals utilized their human capital to create a new venture to alleviate the suffering of other victims, did their human capital have a positive impact on their post-disaster functioning (i.e., resilience outcome). Here again, engaging in entrepreneurial activity served as a mechanism through which individuals could adapt to adverse circumstances and thereby display resilience in the face of severe challenges. Specifically, Williams and Shepherd (2016) suggested that entrepreneurial activity acts as a mechanism of resilience because it allows individuals to “deploy resource reserves toward future gains” (p. 380). This highlights the potential for entrepreneurship to facilitate the process of adapting to certain challenges and points to entrepreneurial activity as a potential mechanism in the process of realizing individual-level resilience outcomes. This study is an example of resilience as a process because it investigates the subjects before, during, and after a specific instance of adversity and thereby the actions taken to adapt to that adversity.

Each of these studies examines entrepreneurs’ responses to a specific instance or type of adversity and thus analyzes resilience “in action.” Future work in this domain may dig deeper to examine the unfolding psychological process of entrepreneurs’ resilient responses to adversity. This would likely require a case study approach so as to capture the details and sequences of thoughts and behaviors related to entrepreneurial resilience in response to an adverse situation.

Resilience as an Outcome

Resilience has also been characterized as an outcome or set of outcomes that individuals may realize after facing adversity. In the psychology literature, Bonanno et al. (2011) defined resilience as “an outcome pattern following a potentially traumatic event characterized by a stable trajectory of healthy psychological and physical functioning” (p. 513). In this case, resilience can be identified after the fact in the behaviors and cognitions of the individual who has faced a challenge. Indeed, it is the minimal or lack of symptoms that many individuals display after trauma that first inspired research into resilience, or what Masten (2001) called “ordinary magic” (p. 227).

Naturally, continued functioning after an adverse event will appear different for different individuals. However, the psychology literature has tended to look at physical and mental health outcomes, including the absence of depression, anxiety, and somatization. Respondents’ satisfaction with their lives and the absence of post-traumatic stress symptoms, have also been considered to constitute resilience outcomes (Seery et al., 2010). For example, Bonanno, Galea, Bucciarelli, and Vlahov (2007) studied the resilience of individuals following the 9/11 terrorist attacks and looked specifically at either zero or one PTSD symptom as an indicator of resilience.

These models in psychology tend to examine outcomes of more general (i.e., not role-specific) and severe instances of adversity. Therefore, it is possible that a set of more relevant resilience outcomes for the role of an entrepreneur may be related more so to their work. In this vein, Britt et al. (2016) developed a theoretical model of employee resilience. In their model, they identified well-being, the presence of healthy relationships, and job performance as resilience outcomes (Britt et al., 2016). These, presumably, also apply to individuals in their role as an entrepreneur. The entrepreneurship literature, however, points to a more specific set of resilience outcomes that entrepreneurs may realize.

Resilience Outcomes in Entrepreneurship Research

Shepherd et al. (2020), also examined the resilience outcomes that refugee entrepreneurs were able to realize. They considered these outcomes to represent “positive functioning in the face of adversity” (Shepherd et al., 2020, p. 8). They noted that most of the refugee entrepreneurs that they interviewed were able to realize resilient outcomes, including proactive problem-solving, establishing a connection with a broader purpose, as well as self-reliance. However, certain refugee entrepreneurs were also able to remain realistically optimistic and to find a sense of belonging in several sociocultural groups. For instance, some refugee entrepreneurs who lived or worked outside the refugee camps were able to establish connections with individuals outside the camps, and thereby developed a sense of identity related to both their home country and the country they had sought refuge in (Shepherd et al., 2020). These outcomes also served to facilitate the entrepreneurial actions of the refugees. Perhaps more so in this study than in other existing studies in the entrepreneurship literature, Shepherd et al. (2020) recognized the recursive relationships of resilience processes, outcomes, and capabilities.

Resilience is also important to entrepreneurs because many will face the failure of one or more ventures (Corner, Singh, & Pavlovich, 2017). Byrne and Shepherd (2015) have noted one potential downfall of resilience as it relates to entrepreneurial failure. In a qualitative study of the emotions and cognitions experienced by business owners following the failure of their venture, the authors labeled those individuals who only experienced primarily positive emotions after the failure as resilient. However, these individuals displayed little ability to actually make sense of the failure of their business and thereby were unable to maximize learning from the failure. As Byrne and Shepherd noted, this suggests a need for future research on how emotions, including those associated with resilience, impact entrepreneurial sensemaking and other important outcomes.

Studies of the outcomes of resilience, like those that utilize the process perspective, necessitate that the researcher identifies a particular instance or type of adversity that the entrepreneur has endured. Future research in this area may be able to pinpoint additional specific outcomes of entrepreneurial resilience; that is to say, what “sustained functioning,” or the “absence of negative symptoms” after facing a challenge, looks like at the level of the individual entrepreneur.

Scholarly Debates on Resilience

It is very likely that debates will continue to surface as to the true nature of resilience—is it a capacity, a process, or an outcome? However, it is also possible that resilience takes all three forms. Some individuals have an innate and/or developed latent potential for resilience (i.e., resilience capabilities). Likewise, resilience is displayed in the cognitions and behaviors that individuals use to respond to and adapt to specific instances of adversity (i.e., resilience processes). Also, it is possible that resilience is reflected in signs of positive adaptation, such as continued functioning, after the fact (i.e., resilience outcomes). Perhaps these three aspects of resilience are simply dependent upon the researchers’ perspective of their subjects, whether it be prospective (before facing adversity), concurrent (during the process of facing adversity), or retrospective (examining outcomes of having faced adversity). It is suggested that researchers, no matter their focus, specify which aspect(s) of resilience they are focusing on, and measure the construct appropriately. For example, the processes of resilience cannot be measured in the absence of actual adversity, because these processes are resilience “in action.”

Debates about the construct of resilience extend beyond those mentioned. Many of these debates are rooted in the psychology literature, but they also extend to and thereby influence research on entrepreneurial resilience. Different deliberations are more or less relevant to each of the aspects of resilience under study. Of particular interest to the conceptualization of resilience as a capability is disagreement over whether resilience is an inherent trait, or whether it is a set of skills that are learned and developed.

In the first part of the 21st century, there has been a movement away from the idea of resilience as a completely innate trait, and thus it may be more correct to say that there is a lack of consensus over the degree to which resilience is inherent or learned (Olsson et al., 2015). For example, research shows that resilient individuals are able to find positive meaning in challenges and adversity (Tugade & Fredrickson, 2004). Therefore, it seems likely that those who are naturally optimistic would also be more resilient. Yet research has also demonstrated that those who have weathered a moderate amount of adversity appear to be more resilient to stressors than those who have encountered little or no adversity (Seery et al., 2010). This suggests that the capabilities associated with resilience are developed over time.

The extent to which resilience can be developed is of interest to entrepreneurship scholars because it has implications for efforts to intentionally develop resilience in entrepreneurs. Given the high failure rate of new ventures, the ability to overcome and move forward from failures is absolutely essential to the success of any entrepreneur’s career (Hayward et al., 2010). Future research could focus on the degree to which resilience can be cultivated in entrepreneurs, and more importantly, to understanding how such skills can be learned and developed.

The study of resilience as a process involves examining individuals’ reaction and adjustment to a challenge or stressor. Accordingly, disagreement relevant to this conceptualization of resilience relates to the level of functioning resilient individuals maintain during challenging times. For example, a prevalent definition of resilience in the psychology literature is that provided by Tugade and Fredrickson (2004), which conceptualizes resilience as the ability to bounce back and adapt after experiencing adversity. This implies that resilient individuals may first experience some decline in functioning from which they can recover. Conversely, in the management literature, the definition provided by Williams et al. (2017) suggested that resilient individuals maintain their level of functioning “prior to, during, and following adversity” (p. 742). Similarly, Bonanno et al. (2011) described a trajectory of resilience as one with very little disruption in functioning following a potentially traumatic event. Conversely, in the entrepreneurship literature, Corner et al. (2017) suggested in their qualitative study of failure that a resilient trajectory after an experience of failure can entail at least a mild, temporary, disruption in psychological and emotional functioning. Although it seems likely that even resilient entrepreneurs experience negative effects from an adverse event, future research may be necessary to understand if resilience does indeed entail an initial decline in functioning, and what types of psychological, emotional, and venture-related states exemplify this functioning.

In the study of resilience as an outcome, the focus is the end state of the individual after having encountered adversity. Relatedly, there is some disagreement in the literature as to the nature of the adaptation that resilient individuals undergo and its results. After having adapted to a challenge, do resilient entrepreneurs ultimately (perhaps after some length of time) return only to their pre-adversity level of functioning, or do they experience some growth and enhanced functioning? As noted exemplified in the definition provided by Williams et al. (2017), some scholars only point to the ability of resilient individuals to maintain functioning, not necessarily to grow, following adversity. Indeed, the model in Carver (1998) indicated that resilience is exemplified by only a recovery to the normal level of functioning. Conversely, Richardson (2002), in his model of disruption and reintegration, described a resilient trajectory as one that involves growth and gaining insight. This allows the individual to become more resilient in the future, for having experienced and recovered from adversity in the past (Richardson, 2002). A similar idea was supported in Seery et al. (2010) who found that those who had endured more adversity were also less affected by more recent challenges and negative events. In the entrepreneurship literature, the resilience outcomes identified by Shepherd et al. (2020), which included the ability of refugee entrepreneurs to find multiple sources of belonging, also seem to represent gains. In other words, it is possible that resiliency is reflected in the ability to learn, grow, and become more resilient from facing challenges (Richardson, 2002). Future research could focus on how and if resilient entrepreneurs experience gains through facing adversity.