Scale, scope, speed, and customization (pick two): Resourcing drives trade-offs in local compassion venturing effectiveness

Abstract

Adverse events such as natural disasters create a sudden need for resource-intensive entrepreneurial action to alleviate suffering. Because individuals in the affected region have first-hand knowledge of their community’s needs and capabilities, they are potentially well-placed to develop effective solutions. However, it is challenging for locals to mobilize resources in the aftermath of an adverse event because the event itself abruptly depletes resources in the focal community. Building on previous work explaining why some individuals respond entrepreneurially in the face of an adverse event, we focus on the post-launch phase of venturing to theorize about how locals’ heterogenous resourcing approaches influence the effectiveness of their new ventures. Our resourcing framework of local compassion venturing effectiveness outlines four pathways through which locals navigate the conditions imposed by the adverse event to develop effective entrepreneurial responses. We offer four propositions explaining how locals’ varying perspectives on resourcing lead them to engage in resource acquisition and deployment in ways that produce different tradeoffs between the four formative dimensions of response effectiveness (scale, scope, speed, and customization). By explaining these tradeoffs, our theorizing contributes to the entrepreneurship literature by providing new insights into why and how compassion ventures differ in effectiveness and highlighting situations in which the aggregate effectiveness of individual ventures may not accurately reflect the community-level impact of compassion venturing.