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Weekly UpdatesThis research revealed the significant role of two distinct cognitive styles as a determinant of perceived entrepreneurial self-efficacy regarding the different stages of the new venture process. The study found that individuals' cognitive preference for analysis or intuition influences their perception and assessment of their entrepreneurial self- efficacy in their intentions to create a new venture. Individuals with the intuitive cognitive style were more confident in their ability to identify and recognize opportunities, without much confidence in their capacity of assessment, evaluation, planning, and marshalling of resources. Conversely, individuals with the analytic cognitive style were more confident in their abilities to assess, evaluate, plan, and marshal resources, but felt less confident in their abilities to search for and recognize new opportunities.
Introduction
Within the last three decades, research has indicated that intentions are a reliable--and for many the most effective--predictor of actual behavior (Ajzen, 1991; Ajzen & Fishbein, 1980; Krueger & Carsrud, 1993; Shaver & Scott, 1991). Intentions are heavily influenced by individuals' perceptions of their own abilities regarding skill sets (i.e., self-efficacy, Bird, 1988; Krueger, Reilly, & Carsrud, 2000). Over the years, entrepreneurship scholars have focused on the decision to pursue an entrepreneurial career, demonstrating the connection between entrepreneurial self-efficacy and career intention. However, little has been done to examine the role of cognitive style in the development of entrepreneurial self-efficacy within the context of the new venture creation process.
Cognitive style is widely recognized as an important determinant of individual behavior in the psychology literature (Sadler-Smith & Badger, 1998) and has been conceptualized as "a high-order heuristic that individuals employ when they approach, frame, and solve problems" (Brigham, De Castro, & Shepherd, 2007, p. 31). As individuals approach the possibility of becoming entrepreneurs and think about the different skills required to create a new venture, their cognitive styles may indeed foster some self- perceptions and inhibit others, enhancing different types of self-efficacy.
New venture creation is typically conceptualized in terms of broad stages (e.g., Timmons, 2005) such as searching for opportunities, planning for the new venture, marshalling resources, and implementation. These stages can be nonlinear and iterative, being perceived by aspiring entrepreneurs through the lens of different cognitive styles.
Little is known about the ways in which cognitive styles facilitate or inhibit an individual's ability or entrepreneurial self-efficacy when confronting the challenges associated with the different stages of the venture creation process.
Thus, our goal in the present study is to assess the role of cognitive style in the relationship between entrepreneurial self-efficacy and intentions to be an entrepreneur, taking into account the diverse set of activities that must be carried out during the new venture creation process. This study adds to the literature on entrepreneurial intentions in two fundamental ways:
1. Each stage of the new venture process has unique demands that call on specific cognitive skills or abilities; this research further investigates the ways in which the cognitive styles of individuals influence their perceived entrepreneurial self- efficacy regarding particular stages in the new venture creation process.
2. Based on our findings, recommendations are offered for further research and to inform practice with regard to the effective creation of new business ventures.
Cognitive Style and Entrepreneurial Cognition Cognitive style refers to an individual's preferred and habitual approach to organizing, representing, and processing information (Streufert & Nogami, 1989). According to Brigham et al. (2007, p. 31), research has shown that: (1) Cognitive style is a pervasive dimension that can be assessed using psychometric techniques; (2) it is stable over time; (3) it is bipolar; and (4) it describes different rather than better thinking processes.
Entrepreneurial cognitions are defined as "... the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth" (Mitchell et al., 2002, p. 97). These cognitions are formed through an individual's perception and interpretation of information, which, in the context of entrepreneurship, refer to any information (about the marketplace, the technology, social, political, regulatory, and economic changes, etc.) that ultimately enable the discovery and exploitation of new business opportunities (Shane & Vankataraman, 2000). Researchers have postulated that cognition has the potential to make a significant contribution to the study of entrepreneurship (e.g., Allinson & Hayes, 1996; Allinson, Chell, & Hayes, 2000; Baron, 1998; Busenitz & Barney, 1997; Mitchell et al.).
An individual's cognitive style may influence the preference for different types of learning, knowledge gathering, information processing, and decision making, many of the critical behaviors with which an entrepreneur is confronted on a daily basis. In addition, it can lead individuals to direct their attention to specific areas of knowledge and certain tasks, and reduce the extent to which they focus on other, similarly important, knowledge and tasks.
Cognitive style is generally thought of as a phenomenon with multiple dimensions, including decision making, learning, personality, and awareness (Leonard, Beauvais, & Scholl, 2005). One dimension, awareness--of people, ideas, objects, and incidents--is considered to be especially important (Allinson & Hayes, 1996; Leonard, Scholl, & Kowalski, 1999). This dimension can be conceptualized as a continuum ranging from intuitive to analytic, and has been frequently used to represent the whole construct of cognitive style (see, e.g., Brigham et al., 2007, who also used the label "decision-making style").
Early on, Ornstein (1977) referred to two modes of awareness that reflect the analytic and intuitive sides of an individual. Intuitive individuals are likely to discover opportunities by observing cues or signals through unfamiliar and unorganized information that is processed in a synthetic and holistic manner (Olson, 1985). This can help individuals identify an opportunity and motivate them to take action, as evidenced by the work of Miner (1997) who found intuition to be an important thinking mode of expert idea generators. Therefore, the intuitive cognitive style may be useful in the searching stage (i.e., opportunity identification) of the new venture creation process.
Olson (1985) also described the analytic process, when individuals rely on linear, sequential processing of information that enables them to evaluate and plan for the new venture. Individuals with the analytic cognitive style may display competency in judging and evaluating information, and selecting actions to implement--skills that are needed in later stages of the new venture creation process (Olson).
Empirical studies have demonstrated that cognitive style influences individual choice, is closely connected to workplace behaviors, and can facilitate the understanding of strategic decisions in organizations (Hough & Ogilvie, 2005; Sadler-Smith, 1998). Moreover, cognitive style has proved to be a useful indicator to assess person- organization fit of owner-managers in small high-technology firms, helping to predict satisfaction, intentions to exit, and actual turnover of the entrepreneurs that owned and managed such firms (Brigham et al., 2007).
Perceptions of Entrepreneurial Self-Efficacy and Entrepreneurial Intentions
Entrepreneurial self-efficacy may play an important role in uncovering the essential skill set needed throughout the various stages of the new venture development process. In many cases, perceptions of self-efficacy are even more important than actual skills as a determinant of behavior (Krueger & Dickson, 1994). The construct of self- efficacy has been widely applied in psychology as an individual difference variable. Self- efficacy relates to one' s choice of activities, one' s effort and persistence to perform these activities, and one's thought processes and emotional reactions when confronted with obstacles (Bandura, 1997; Lent, Brown, & Hackett, 1994). Self-efficacy is defined by Bandura as people's judgments of their capabilities to organize and execute courses of actions required to attain designated types of performance. Self-efficacy is concerned not with the skills one has, but with one's judgments of what one can do with whatever skills one possesses.
An extensive amount of research has been conducted to explicitly investigate the relationship of entrepreneurial self-efficacy and entrepreneurial intentions. The dominant model of intentions was and remains Ajzen's Theory of Planned Behavior (Ajzen, 1991; Krueger & Carsrud, 1993; Krueger et al., 2000). There is sufficient robust research to assert the relationship between self-efficacy and intentionality: Individuals with higher entrepreneurial self-efficacy tend to have higher entrepreneurial intentions (Chen, Greene, & Crick, 1998; De Noble, Jung, & Ehrlich, 1999; Jung, Ehrlick, De Noble, & Baik, 2001; Krueger et al.; Scott & Twomey, 1988). Researchers have suggested that educators and policy makers may boost students' entrepreneurial intentions by (1) enhancing students' confidence to succeed in an entrepreneurial career and (2) enhancing students' perceptions and expectations of strong positive outcomes resulting from an entrepreneurial career (Segal, Borgia, & Schoenfeld, 2002). Of course, enhancing students' confidence and perceptions does not assure that they will succeed--it only increases the likelihood that they will consider and try an entrepreneurial career. In essence, those with higher self- efficacy are more likely to believe they also have an actionable idea, even though they may not. Research has also shown that an increase in perceived self-efficacy leads to an increase in risk taking, by affecting perceptions of opportunities and threats (Krueger & Dickson, 1994).
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