Academic journal article Global Business and Management Research: An International Journal

Physiological Emotions and Entrepreneurial Decisions

Academic journal article Global Business and Management Research: An International Journal

Physiological Emotions and Entrepreneurial Decisions

Article excerpt

Introduction

In order to create a new venture the opportunity has to be discovered and the entrepreneur has to make a choice whether to exploit it or not (Shane and Venkatraman, 2000). While entrepreneurial processes begin with intent to start a new business (Krueger, 1993; Krueger and Brazeal, 1994), it has been suggested that the crux of the entrepreneurial process, is the opportunity recognition and development ability of entrepreneurs which differentiates them from non-entrepreneurs (Venkataraman, 1997). The creation of successful businesses only follows a successful opportunity development process (Ardichvilli, Cardazo and Ray, 2003). Understanding how the Opportunity Recognition process occurs will help extend current theory and provide entrepreneurs with insights regarding their decision making abilities increasing the likelihood of repeated success.

The Opportunity Recognition process has thus far been elucidated by examining cognitive factors with the strongest evidence being for prior knowledge and experience. Prior knowledge and experience can however, create mental ruts making it more difficult for entrepreneurs to recognize innovative opportunities (Shepherd and Detienne, 2005). Further the entrepreneur's passion and perception of the business as his or her own baby (Cardon, Zeitsma, Saparito, Matherne, Davis, 2005), and motivation (Karp, 2006) also contribute to the development of the opportunity. This would mean that the development of a business opportunity depends a lot on whether the entrepreneur likes the idea or not. Entrepreneurship is thus, a recurring pattern of both thoughts and feelings that shape entrepreneurial reality and therefore action and value creation (Karp, 2006). Emotions undoubtedly provide evaluative information and supply energy for motivational behavior in the entrepreneur (Ford, 1999). Considering that the neural systems of emotions interact extensively with their underlying cognitive processes (Gray, Schefer, Brower and Most, 2005) there is a definite need to include the study of affect in the field of entrepreneurship (Baron, 2007) in order to fully understand the venture creation process. Since the most significant evidence has been for prior knowledge and prior experience the research question is: Given that someone has prior knowledge and prior experience, will the same individuals be affected differently if they experience changes in blood pressure and heart rate due to positive versus negative emotions in a particular situation to the point that their decision to develop is different?

Even though many cognitive and emotional factors have different brain regions, there are certain regions of the brain that have definitely been shown to cater to both cognitive and emotional mechanisms namely the individual's ability to make personal judgments in decision making and the expression of feelings (Bechara, Damasio and Baron, 2007; Damasio, 2003). This highlights the importance of the role of emotions in the decision making stage of the opportunity recognition process. Emotions may be categorized as physiological, secondary or core emotions (Damasio, 2003; Russell and Barrett, 1999). The first type of emotional response however, is most relevant to this study since it is an immediate bodily (physiological) reaction that tells the individual whether they like the object or do not like it (Chauduri, 2006) and since we are measuring the decision made at a moment in time, the primary reaction that will impact the decision is the immediate physiological response.

The long term objective of this research is to contribute to an understanding of the role of all types and levels of emotions in each stage of the opportunity recognition process, however for the purpose of this study only the decision to develop stage and the impact of the first emotional response is investigated. Keeping this aspect in mind the study builds a theoretical framework from the literature in entrepreneurship, cognition and emotions to demonstrate the potential significant impact of physiological responses on the decision to develop a business opportunity. …

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