Finally, while much of individuals’ attention is automatically allocated to stimuli to inform their decisions , this automaticity can create some problems, especially when thinking about novel tasks and/or working in novel environments. Metacognition is thinking about one’s thinking, which enables a more conscious consideration of the current task (similarities and differences) vis-à-vis other decision situations that require one to choose among alternate decision strategies and monitor progress in exploiting that decision strategy. While we speculate that a metacognitive approach is likely to be most useful in novel contexts and when decision speed is not critical, empirical evidence is needed to explore this claim. For example, scholars may explore the potential benefits and downsides of metacognition for entrepreneurs acting in industries with varying degrees of dynamism and technological change.
Identity and Entrepreneurial Cognition
In Chap. 5, we discussed entrepreneurial identity . Identity has a number of important implications in the entrepreneurial context. We described how people who pursue an entrepreneurial career are able to satisfy their need for distinctiveness but also acknowledged that people have the need to belong and that satisfying such a need is both distinctive to and a challenge for entrepreneurs. Indeed, many entrepreneurs report feeling lonely. In Chap. 5, we also discussed how entrepreneurs can develop an identity with the optimal level of distinctiveness by combining their work identity with their non-work identity in a way that maximizes psychological well-being. Of course, we realize (partly from our own experiences ) that it is not always easy to “manage” one’s work and non-work identities because they conflict at times. Therefore, we discussed alternate identity-management strategies—compartmentalization and integration —and the conditions under which one is more likely to be successful than the other (see Shepherd and Haynie 2009). Going forward, research may explore how entrepreneurs successfully implement these strategies in their daily lives and what aspects of their work- and non-work-related identities they need to manage most actively to resolve identity conflict . Perhaps some industries (e.g., those that are highly competitive) make identity management more challenging than other industries, and perhaps entrepreneurs with some specific personalities are more successful in resolving identity conflict than other entrepreneurs. We believe that there is ample room for research to build on our arguments about entrepreneurs’ identity-management strategies.
We also explained how identities are sometimes lost and how the pursuit of a potential opportunity and/or entrepreneurial career can help individuals find, develop, and refine a new work identity. In the case of identity loss from a traumatic event, the first step toward creating a new identity is to build an identity foundation . An identity foundation requires the individual to rebuild fundamental assumptions about the world, humanity, and the self . Without this foundation, identity work will likely fail. Importantly, these individuals (i.e., those who have lost their identity due to a traumatic event) can develop a motivation for an entrepreneurial career (through both pull and push motivations ) and can think creatively about how their past career competencies apply to new possible entrepreneurial careers (Haynie and Shepherd 2011). At the same time, these insights open up various future research opportunities. For example, how does the nature of the traumatic event impact the individual’s motivation to pursue an entrepreneurial career and the type of venture founded? Also, how does the type and strength of the identity lost by the traumatic event impact entrepreneurial motivation ? Perhaps the individual’s personality influences to what extent entrepreneurial motivation impacts his or her recovery from trauma through the pursuit of an entrepreneurial career . Understanding these boundary conditions of entrepreneurial motivation as a response to trauma is important not only for building a new theory of entrepreneurial motivation but also for helping traumatized individuals decide whether an entrepreneurial career is an appropriate way to move on in their lives.
We continued this discussion of creating a new identity by exploring the situation of people hitting rock bottom . Rock bottom provides a context for escape . While some escape through identity play , which provides a basis for exploring a range of potential careers and a pathway to recovery , there is a dark side. The dark side involves escape through cognitive deconstruction , which hinders any progress in creating a new identity and stalls recovery (or worse). Individuals who hit rock bottom after losing a career can be helped if they think about the boundary between fantasy and reality, immersed in the present, and engage identity play (Shepherd and Williams 2018). Again, we expect future research to provide valuable insights for both scholars and those who hit rock bottom by building on our work. For example, there are different antecedents and obstacles to engaging in identity play . For example, those who hit rock bottom have a different “psychological space” for identity play (see also Petriglieri and Petriglieri 2010). It would be interesting to study under what conditions entrepreneurs who hit rock bottom have more or less psychological space for identity play and when they are more likely to use this psychological space for identity play as a basis for recovery from hitting rock bottom . In addition, we know little about what tools help people recover with identity play (e.g., scenario planning (Brown and Starkey 2000)). Finally, those who hit rock bottom may create different types of positive identities during recovery . For example, how do different types of identity play as well as different ways of carrying out identity play create new (entrepreneurial) identities, such as those that are positive but may also represent downgrades in some respect (Newman 1988)? Also, what role does culture play in enabling or hindering successful recovery from hitting rock bottom as well as in engaging in identity play?
Furthermore, as discussed in the chapter, an entrepreneur can have multiple identities, and these identities can come into conflict. Such identity conflict is particularly salient in the family business context. Indeed, we discussed the conflict between the family identity and the owner identity in family businesses and the ways this identity conflict can slow entrepreneurial decision making. We also offered some suggestions for how to manage potential identity conflict to speed entrepreneurial decision making. However, we also note here that the nature of both the family and the family business may influence the generation of and escape from identity conflict . These issues warrant further research. For instance, families differ in the extent to which they are involved in the family business. As such, does the conflict between a person’s owner and family identities evolve differently if more members of a family are involved in the business? How does conflict among family members (either involved in the business or not) influence the identity conflict that emerges? Further, is this conflict resolved more or less easily (or resolved in a different manner) when the family business has existed for more generations or when it is run by an outside CEO rather than a family CEO? How do non-economic goals often pursued by family members (Chrisman et al. 2014) influence their identity conflict ? Future research can make important contributions by exploring these and other questions regarding the family- and business-related factors behind the emergence and resolution of identity conflict for family owner-managers.
Emotion and Entrepreneurial Cognition
In Chap. 6, we discussed the role of emotion in entrepreneurship. We highlighted that an entrepreneurial career can generate both high positive emotions and high negative emotions . First, we described passion and distinguished between harmonious and obsessive passion and how they influence the decision to exploit a new potential opportunity. We also explained how another positive emotion —excitement —moderates the relationship between passion and the decision to exploit a potential opportunity. However, here, we also note that passion and excitement are only two out of many positive emotions that might play a role in entrepreneurial decision making. For example, Welpe et al. (2012) found that joy can increase the positive impact of opportunity evaluation on exploitation , and Baron (2008) argued that positive emotions generally facilitate opportun
ity recognition . Therefore, there is good reason to believe that additional positive emotions , such as enthusiasm, happiness, pride, or boldness, might play an important role in opportunity recognition and exploitation . Further, in addition to experiencing these emotions, anticipating such emotions might influence the entrepreneurial process. For example, entrepreneurs who anticipate pride about successfully founding a venture might be more driven toward opportunity recognition and exploitation than those who tend to experience little pride in general. Moreover, a few studies have addressed the issue of negative emotions in the entrepreneurial process. These studies have shown, for example, that entrepreneurs tend to experience fewer negative emotions than non-entrepreneurs (Patzelt and Shepherd 2011), but they have also highlighted the important role of specific negative emotions (e.g., fear and anger) (Welpe et al. 2012; Mitchell and Shepherd 2010) for opportunity evaluation and exploitation . We expect that the study of positive and negative emotions’ role in the entrepreneurial process will receive significant scholarly attention in the future.
Second, given that emotions play a key role in an individual’s entrepreneurial cognition, we explained how managers’ displays of emotions can influence employees’ willingness to act entrepreneurially. Specifically, we highlighted our study with a colleague (Brundin et al. 2008) focusing on mangers’ confidence , positive emotion of satisfaction, and negative emotions of frustration, worry, bewilderment, and strain and their impact on employees’ willingness to act entrepreneurially; employees evaluated all these emotions as being influential for their entrepreneurial motivation . In addition, my (Holger) work with my colleagues (Breugst et al. 2012) found that employees’ perceptions of entrepreneurial passion influence their commitment to new ventures but differently for different types of passion : while passion for innovation and venture development increases commitment, passion for founding has a negative effect. These studies reveal considerable potential for contribution when scholars explore not only entrepreneurs’ emotions but also how individuals in their environment react to entrepreneurs’ emotional displays. Indeed, the literature is almost silent on how employees perceive their work environment within startups, including entrepreneurs’ emotional expressions. Further, there is initial evidence that entrepreneurs’ passionate displays can trigger investors’ funding decisions (Chen et al. 2009), which indicates that a variety of stakeholders (in addition to employees and investors including customers, suppliers, alliance partners) might be influenced by entrepreneurs’ emotional displays. Scholars have plenty of opportunities to investigate how entrepreneurs’ emotions and emotional displays influence their social environments and thereby ventures’ access to resources and—ultimately—success.
We also detailed how employees often become attached to their projects and experience a negative emotional reaction—grief (Shepherd 2003)—when their projects (Shepherd et al. 2009a, 2011) or businesses fail (Byrne and Shepherd 2015; Shepherd 2003, 2009). These entrepreneurs often feel grief because they have lost something important to them—something that satisfied their needs for competence , autonomy , and belonging (Shepherd and Cardon 2009). These negative emotions can obstruct individuals’ ability to learn from failure experiences and move on (Shepherd 2003; Shepherd et al. 2011). At the individual level, entrepreneurs (corporate or independent) can oscillate between a loss orientation and a restoration orientation as a means of “managing” negative emotions , which is superior to simply normalizing failure (i.e., taking emotion out of the entrepreneurial process altogether). These individuals can also show themselves self-compassion —self-kindness , common humanity , and mindfulness —which helps stop the escalation of negative emotions and facilitates learning from the experience . We also discussed implications of managing grief over project failure at the organizational level. As such, our work raises interesting questions that future research can explore . For example, how do organizational environment, culture, and leadership facilitate the oscillation between loss and restoration orientations ? Further, how do different individuals achieve the best “balance” between these orientations based on their personality characteristics and the nature of their failure experience? We hope that we inspired research along these lines by summarizing what we know about the role of negative emotions in the context of entrepreneurial failure.
Conclusion
In conclusion, entrepreneurial cognition is a fascinating topic that has triggered our curiosity and inspired our research for more than a decade. While scholars have made considerable progress on studying this topic, this final chapter has shown that every research question addressed thus far has opened up more questions that are just as fascinating. The goal of this book was to both summarize what our work has contributed to current knowledge and identify the opportunities for research it has opened up for future scholarship. We hope you enjoyed our book and were able to glean some new insights into entrepreneurial cognition. Even more, we hope we triggered your motivation to join us on the exciting road ahead.
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