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Footnotes
1We concentrate on the individual level in this chapter.
2We do not provide one definition for “entrepreneurial identity” because although people are likely to share common characteristics, we also expect variation, and it is a person’s idea of his or her own entrepreneurial identity that influences psychological well-being.
3People likely have different negative features in their lives, create different associative connections between these features, and, thus, have different experiences with and timing of hitting rock bottom. Future studies can investigate individual variation in the development, nature , and timing of hitting rock bottom, especially in relation to identity loss.
4In line with the social psychology literature, we use “identity” and “role identity” interchangeably (e.g., Burke 1991; Burke and Tully 1977; Stryker 1968; Stryker and Burke 2000).
© The Author(s) 2018
Dean A. Shepherd and Holger PatzeltEntrepreneurial Cognitionhttps://doi.org/10.1007/978-3-319-71782-1_6
6. Emotion and Entrepreneurial Cognition
Dean A. Shepherd1 and Holger Patzelt2
(1)University of Notre Dame, South Bend, IN, USA
(2)Technical University Munich, München, Bayern, Germany
Entrepreneurship is a highly emotional endeavor; it has often been portrayed as an “emotional rollercoaster” with multiple ups and downs that impact entrepreneurs’ emotional experiences . For example, entrepreneurs may experience passion , joy, satisfaction, flow, enthusiasm, and excitement from work, but also bitter disappointment, distress, worry, anger, and grief (Shepherd et al. 2011; Baron 2008; Cardon et al. 2009; Patzelt and Shepherd 2011; Foo et al. 2009; Boyd and Gumpert 1984; Schindehutte et al. 2006). The psychology literature has long acknowledged that emotions can impact how people think and decide. For example, Affect-as-Information Theory (Frijda 1986; Schwarz and Clore 1983) states that individuals ask themselves (implicitly) how they feel about a particular situation and, based on this information component, make decisions . The Broaden-and-Build Theory (Fredrickson 1998) assumes that positive emotions influence cognition by broadening individuals’ thought-action repertoires. On the other hand, it is also well documented that people can use their cognitive resources to influence emotional experiences (Folkman and Moskowitz 2004; Lazarus and Folkman 1984a, b). We will now explore the association between emotions and cognition in entrepreneurship.
Positive Emotions and Entrepreneurial Cognition
Individuals develop passion for their work when they value their work highly, like performing work-related activities, and do so regularly (Vallerand et al. 2003), thus leading them to incorporate work into their personal identity . For instance, Bill Gates and Steve Jobs were not merely the founders and former CEOs of Microsoft and Apple. Rather, the businesses they founded also partially defined who they were as people, and their work activities became significant parts of their identities . However, managers vary in terms of how much they incorporate work activities into their identity (Cardon et al. 2009; Shepherd and Haynie 2009), which results in either harmonious passion or obsessive passion . While harmonious and obsessive passion are correlated to a degree, both are not the opposite ends of a continuum (Vallerand et al. 2003).
Harmonious Passion and Entrepreneurs’ Opportunity Exploitation
Harmonious passion is an autonomous internalization of an activity in one’s identity that causes the individual to decide to pursue that activity (Vallerand et al. 2003). As a result, people experiencing harmonious work -related passion readily and autonomously undertake work-related activities. For instance, when these entrepreneurs brainstorm new ideas with innovation team members, obtain the resources needed to turn the resulting ideas into products, and create product-development budgets, they engage in these activities with no (or only minimal) obligations attached. In other words, such entrepreneurs’ motivation does not stem from their firm’s goal to reach specific outputs, from social pressure at work, or from the need to feed the family . In addition, while work plays an important role in the development of these individuals’ identity as an entrepreneurial manager, this does not mean that work necessarily dominates other parts of their lives. Rather, these entrepreneurs can balance different elements in their lives when creating their identity . For instance, a harmoniously passionate entrepreneur may incorporate roles as a family member, golfer, and guitar player into his or her overall identity .
By autonomously internalizing work into their identities , harmoniously passionate entrepreneurs are able to flexibly perform work activities and believe that they have control over their entrepreneurial endeavors. These feelings of flexibility and control make such entrepreneurs experience positive emotions. They are absorbed by their work and experience flow (Vallerand et al. 2003). For example, some corporate entrepreneurs have reported putting their entire heart into their work (Shepherd et al. 2011). When entrepreneurs have positive affective experiences , they are more likely to pursue new opportunities they identify .
Moreover, harmoniously passionate entrepreneurs tend to use heuristics less but engage more in analytic strategies because positive emotional experiences enhance cognitive flexibility by enabling entrepreneurs to build on or connect cognitive frameworks in a novel manner (Baron 2004; Ward 2004). For instance, a positive affective state indicates that the decision maker can use mental resources to broaden his or her thought-action repertoire (Fredrickson 1998). Thus, harmoniously passionate entrepreneurs experiencing positive emotions will more likely discover non-obvious alternatives to sidestep challenges associated with exploiting new opportunities (cf. Baron 2008), therefore demonstrating firsthand the creativity underlying successful innovation processes (Bharadwaj and Menon 2000).
Additionally, because of their positive emotional state at work, harmoniously passionate entrepreneurs are more likely to believe there are fewer risks associated with exploiting a new opportunity. When individuals experience positive affect, they are more likely to believe they have control over environmental influences (Alloy and Abramson 1979), thus influencing the level of risk and outcome uncertainty these individuals perceive, both of which can be significant barriers to new opportunity exploitation (McMullen and Shepherd 2006; Mullins and Forlani 2005). Entrepreneurs who perceive they are in control over the uncertainties associated with opportunity exploitation will be more likely to act on a novel opportunity (Mullins and Forlani 2005). This association holds although the entrepreneur might possess incomplete information about the context they operate in (Choi and Shepherd 2004). Overall, harmoniously passionate entrepreneurs will also spend less energy gathering and analyzing information, and they are more likely to act on opportunities than less passionate entrepreneurs who feel they have limited control over their context.
Obsessive Passion and Entrepreneurs’ Opportunity Exploitation
Obsessive passion “results from a controlled internalization of the activity into one’s identity ” (Vallerand et al. 2003: 757). Controlled internalization stems from the perception of a duty to undertake an activity due to intrapersonal or interpersonal obligations related to it. For instance, an entrepreneur could be part of an entrepreneurship club that requires members to create a particular amount of new products/services every year in order to be accepted. Alternatively, entrepreneurs’ self-esteem can be connected to the performance of their development projects, causing them to put forth substantial energy into these projects. This intensive dedication to projects is likely to make work an important part of such entrepreneurs’ identities . Entrepreneurs experiencing obsessive passion are generally not able to balance their work, family, and additional roles during identity for
mation well. This is because entrepreneurial activities take up an overly large part of their overall identity , which can lead to conflict with other roles and activities they pursue in their lives (see Vallerand et al. 2003).
Unlike harmonious passion, obsessive passion does not drive people to act based on positive affective experiences ; rather, obsessively passionate individuals have an “internal compulsion” to pursue activities (Vallerand et al. 2003: 757). This felt obligation to work can also lead entrepreneurs to go after new additional opportunities. For instance, entrepreneurs who do not experience obsessive passion about their work may feel that exploiting a certain opportunity would take too much of the venture’s resources or would be too risky, thus making them decide not to pursue the opportunity further. However, entrepreneurs high in obsessive passion will think less about resources and risk. Instead, they will consider whether exploiting the opportunity would lead to acceptance within the venture, among stakeholders (e.g., financiers), and/or in the entrepreneurial community . Furthermore, acting on new opportunities may also enable the obsessively passionate entrepreneur to uphold his or her self-image as “being so entrepreneurial that not opportunity is missed,” which in turn will help maintain self-esteem. Studies have supported these arguments by demonstrating that in environments in which difficult and distant goals (such as developing a new product opportunity to market) are the norm, people often have trouble resisting the urge to concentrate on a proximal reward (e.g., acceptance in the entrepreneurial community ) at the expense of ignoring goals that are more distal (Metcalfe and Mischel 1999).