This introductory chapter discusses the nature of explanation. It first distinguishes between the epistemic versus ontic conceptions of explanation; the former deems that explanations explain by subsuming a phenomenon under a general proposition while the latter regards explanations as physical entities residing and participating in the causal structure of the world. Using the example of entrepreneurial opportunities, the chapter describes how an ontological position plays a role in shaping an explanation. Explanation promotes understanding. However, tautological explanations, such as Barney’s (1991) explanation of competitive advantage based on firm resources, do not increase our understanding of the phenomenon in question. Then the chapter discusses the contrastive approach to explanation, showing that an explanation is necessarily incomplete. The discussion is followed by examining whether causal explanations have to be general and whether good explanations have to be interesting. The chapter ends with a brief description of the subsequent chapters of the book.

The principle of sufficient reason (PSR) says that every contingent truth has an explanation. It is widely thought that if one strengthens "explanation" to "contrastive explanation," then the PSR entails modal fatalism – the view that no proposition is contingent. In a theistic context, this would force full theological determinism: of creaturely behavior by God and of divine behavior by the divine nature. I discuss about a dozen accounts of what could be meant by “contrastive explanation.” Some of them support these arguments and some do not. I argue, however, that we should not extend the PSR to contrastive explanation in any of the senses given.