Entrepreneurial Cognition

by Dean A Shepherd

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  Footnotes

  1This notion of excitement is also in line with how we induced excitement using visual stimuli in this study’s experimental approach. Although there are likely to be differences in how excited entrepreneurs become when viewing excitement-inducing pictures, a strong research stream has validated that such pictures do induce excitement in observers.

  2These orientations are independent of each other such that a person can concentrate on one orientation but not the other, or be high or low in both orientations. In addition, people who are high in both orientations can be high or low in an oscillation orientation. The analyses that follow demonstrate the independence of these orientations.

  © The Author(s) 2018

  Dean A. Shepherd and Holger PatzeltEntrepreneurial Cognitionhttps://doi.org/10.1007/978-3-319-71782-1_7

  7. Conclusion

  Dean A. Shepherd1 and Holger Patzelt2

  (1)University of Notre Dame, South Bend, IN, USA

  (2)Technical University Munich, München, Bayern, Germany

  In this book, we summarized important parts of our prior work targeted toward understanding the cognition of entrepreneurs. Specifically, our focus was on the role of knowledge, motivation , attention, identity, and emotions in the entrepreneurial process. Our work has several implications for scholars and practitioners interested in better understanding entrepreneurial cognition.

  Knowledge and Entrepreneurial Cognition

  In Chap. 2, we outlined the important role of knowledge for individuals’ and teams’ recognition of entrepreneurial opportunities . Specifically, we illustrated that individuals are heterogeneous in their knowledge endowments and that this heterogeneity explains, partly, why some recognize specific types of opportunities (e.g., commercial, sustainable , health-related, international ) while others do not. We also found that knowledge sources internal and external to the entrepreneur can impact opportunity recognition . Finally, we explored the role of structural alignment as a cognitive process that interacts with prior knowledge in opportunity recognition . Our findings have important implications for scholarship and highlight future research possibilities.

  First, entrepreneurship scholars who explore the connection between prior knowledge and opportunity identification should carefully differentiate between types of prior knowledge. For example, prior knowledge can lead individuals to identify more opportunities that are themselves more innovative, but some individuals may become entrenched in mental ruts as they gain more experience . This relationship could be curvilinear such that there is an early rise in the number and innovativeness of opportunities with increasing knowledge followed by a plateau and then a decline. These are just expectations, however; additional research is needed to fully understand these relationships. Moreover, it is likely that the relationship between prior knowledge and opportunity identification is more complicated than a clear-cut main-effect-only explanation. Through our analysis, we argued that the relationship between individuals’ prior knowledge of customer problems and their ability to identify an opportunity varies depending on differences in the financial reward they receive for completing the task (Shepherd and DeTienne 2005; see also Csikszentmihalyi 1975, 2000; Maheswaran and Sternthal 1990). While it is valuable to explain why certain individuals (and not others) recognize opportunities based on their prior knowledge, the mechanisms underlying how prior knowledge facilitates opportunity identification remain largely unclear and wa
rrant attention in future research.

  Second, we found that entrepreneurial knowledge of the natural or communal environment influences individuals’ recognition of opportunities for sustainable development. Specifically, individuals with these knowledge types are more likely than others to recognize opportunities based on changes in the natural and communal environment in which they live. Importantly, we also proposed that the impact these types of knowledge have on opportunity recognition is contingent on entrepreneurial knowledge—that is, knowledge of markets, ways to serve markets, and customer problems (Shane 2000). Specifically, there appears to be a complementary relationship between natural/communal environment knowledge and entrepreneurial knowledge, which implies that interactions between different knowledge types warrant particular attention in future research on the recognition of opportunities that go beyond generating financial gains for entrepreneurs. Interactions between knowledge types in opportunity recognition might also be central to extending businesses from developed economies into developing economies. For example, Hart (2006: 42) argued that “managers, particularly in multinational corporations, are more accustomed to viewing the global market as a single monolithic entity. They focus almost exclusively on the money economy and customers who have achieved a certain level of affluence.” Hart (2006: 41) also described the consequences for the lack of economic development in developing countries:In the past, ignorance and isolation meant that those in the traditional and market economies were largely unaware of their plight. Today, however, the digital revolution is bringing information—and ideas—to growing number of the world’s poor. Such knowledge is potentially empowering, as we will see, creating the potential to reform corrupt regimes, solve environmental problems, and spur more equitable forms of development.