Entrepreneurs as Parallel Processors: An Examination of a Cognitive Model of New Venture Opportunity Evaluation

By Kim, Jeong-Nam; Clelland, Iain et al. | Academy of Entrepreneurship Journal, July 1, 2010 | Go to article overview

Entrepreneurs as Parallel Processors: An Examination of a Cognitive Model of New Venture Opportunity Evaluation


Kim, Jeong-Nam, Clelland, Iain, Bach, Seung, Academy of Entrepreneurship Journal


ABSTRACT

This study (N = 276) tested the role of individual and situational variables on an inexperienced, pre-nascent entrepreneur's likelihood of pursuing an entrepreneurial opportunity. We identified self- efficacy and cognitive multilateralism as psychological traits that explained activation of different types of entrepreneurial cognitive structures. These cognitive structures then affect risk and opportunity perceptions and new venture opportunity evaluation decisions. The tests supported most of our conceptual hypotheses and parallel cognitive processes about new venture opportunity evaluation. We suggest theoretical and practical implications for future entrepreneurship studies.

INTRODUCTION

One of the central concerns of the entrepreneurship field is new venture opportunity, particularly the related processes of discovery, evaluation, and exploitation (Shane & Venkataraman, 2000). While entrepreneurial opportunities are usually created by external factors, the resulting opportunities can only be transformed into an enterprise through the processes of discovery and exploitation by individuals (Venkararaman, 1997). Furthermore, only some individuals are able to discover and successfully pursue the entrepreneurial opportunities (Baron, 2004; Corbett, 2007). For this reason, the study of the individual-situation nexus is a meaningful endeavor to further understand new venture opportunities (Baron, 2004). In addition, individual mental processes or cognitive properties have been regarded as critical factors in explaining the variability of entrepreneurial behaviors (e.g., Shaver & Scott, 1991; Venkataraman, 1997; Shane & Venkataraman, 2000; Mitchell, et al., 2007; Baron, 2004; Corbett, 2007).

Entrepreneurial cognition has been defined as: "the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation and venture creation and growth" (Mitchell et al, 2002, p. 91). These same authors more recently noted that the central question for research on entrepreneurial cognition is "How do entrepreneurs think?" (Mitchell et al, 2007) because this would provide much greater understanding of their subsequent decisions and actions. Given there are no optimization processes or simplistic mechanisms in discovering complex entrepreneurial opportunities (see Venkataraman, 1997 and Shane & Venkataraman, 2000 for further review), individuals' different cognitive structures play a critical role in identifying entrepreneurial opportunities. Furthermore, Busenitz et al (2003) posed a question, "...why, faced with an identified opportunity, entrepreneurs will act and nonentrepreneurs will not? (p. 299)" To answer this question, we need to look more closely at the cognitive processes which entrepreneurs and non-entrepreneurs go through in their evaluations of new venture opportunities. While the field of entrepreneurship has made much progress in this cognition-based research, there are still many unanswered 'why' and 'what' questions regarding individual differences, particularly in opportunity discovery, evaluation, and exploitation (Baron, 2004; Shane & Venkataraman, 2000).

The purpose of our study is to contribute to this stream of research by examining types of cognitive properties that foster entrepreneurial thinking; situational factors such as motivation and types of knowledge that are influential; and to test how these individual level differences and situational factors jointly influence the likelihood of entrepreneurial choice. By exploring the key factors and the cognitive processes through which ordinary people or nascent entrepreneurs make decisions when new venture opportunities are present, we hoped to better understand the whole picture of entrepreneurial processes and develop the ways to nurture entrepreneurial initiations among would-be-entrepreneurs. Also, we suggest countermeasures to remove (cognitive) barriers that hamper and inhibit entrepreneurial thinking. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Entrepreneurs as Parallel Processors: An Examination of a Cognitive Model of New Venture Opportunity Evaluation
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.