Abstract
Economic theories of entrepreneurship propose elements that enhance or hinder entrepreneurial action on a macroeconomic level, while individual-level approaches seek to explain why some individuals are more likely than others to engage in entrepreneurship. However, recent theorizing by scholars has introduced a more integrated approach to entrepreneurial behavior that relates both external and internal factors to entrepreneurial action by considering how uncertainty and motivation affect entrepreneurial attention and evaluation. In this paper, we consider how environmental uncertainty and complexity differentially affect the motivations of independent entrepreneurs and corporate entrepreneurs to engage in entrepreneurial action. While examining how uncertainty and complexity affect macro-level entrepreneurship, we also explore how individual differences between corporate entrepreneurs and independent entrepreneurs affect entrepreneurial decision-making. By examining the role schemas of entrepreneurs, we construct a theoretical framework to explain why corporate entrepreneurs may behave differently than independent entrepreneurs under the same set of environmental conditions. Important implications are outlined for researchers, entrepreneurs, and policy makers.
Similar content being viewed by others
References
Abelson, R. P. (1981). The psychological status of the script concept. American Psychologist, 36, 715–729.
Aizenman, J., & Marion, N. P. (1993). Policy uncertainty, persistence, and growth. Review of International Economics, 1(2), 145–163.
Alvarez, L., Kanniainen, V., & Södersten, J. (1998). Tax policy uncertainty and corporate investment: A theory of tax-induced investment spurts. Journal of Public Economics, 69, 17–48.
Ardichvilli, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18(1), 105–123.
Baker, T., Miner, A., & Eesley, D. (2003). Improvising firms: Bricolage, account giving, and improvisational competency in the founding process. Research Policy, 32, 255–276.
Bandura, A. (1977). Social learning theory. Englewood Cliffs, NJ: Prentice Hall.
Bandura, A. (1986). Social foundations of thought and action. Englewood Cliffs, NJ: Prentice-Hall.
Bandura, A. (1997). Self-efficacy: The exercise of control. New York: W.H. Freeman.
Baron, R. A. (1998). Cognitive mechanisms in entrepreneurship: Why and when entrepreneurs think differently than other people. Journal of Business Venturing, 13(4), 275–294.
Baron, R. A., & Markman, G. D. (2003). Beyond social capital: The role of entrepreneurs’ social competence in their financial success. Journal of Business Venturing, 18, 41–60.
Bhide, A. V. (2000). The origin and evolution of new businesses. Oxford: Oxford University Press.
Billet, S. (1996). Situated learning: Bridging sociocultural and cognitive theorizing. Learning and Instruction, 6(3), 263–280.
Brendl, C. M., Higgins, E. T., & Lemm, K. M. (1995). Sensitivity to varying gains and losses: The role of self-discrepancy and event framing. Journal of Personality and Social Psychology, 69, 1028–1051.
Brockhaus, R., & Horowitz, P. (1986). The psychology of the entrepreneur. In D. Sexton & R. Smilor (Eds.), The art and science of entrepreneurship (pp. 25–48). Cambridge, MA: Ballinger.
Brockner, J., Higgins, E. T., & Low, M. B. (2004). Regulatory focus theory and the entrepreneurial process. Journal of Business Venturing, 19(2), 203–220.
Bruce, D. & Deskins, J. (2006). State tax policy and entrepreneurial activity. Small Business Research Summary, (November 2006).
Burgelman, R. A. (1984). Designs for corporate entrepreneurship in established firms. California Management Review, 26(3), 154–166.
Burns, T., & Stalker, G. M. (1961). The management of innovation. London: Tavistock Publications Ltd.
Burt, R. S. (1992). Structural holes: The social structure of competition. Cambridge, MA: Harvard University Press.
Busenitz, L., & Barney, J. (1997). Differences between entrepreneurs and managers in organizations: Biases and heuristics in strategic decision-making. Journal of Business Venturing, 12(1), 9–30.
Chandler, G. N., Honig, B., & Wiklund, J. (2005). Antecedents, moderators, and performance consequences of membership change in new venture teams. Journal of Business Venturing, 20, 705–725.
Christmann, P. (2000). Effects of best practices of environmental on cost advantage: The role of complementary assets. Academy of Management Journal, 43(4), 663–680.
Cooper, A. C., & Dunkelberg, W. C. (1987). Entrepreneurial research: Ole questions, new answers, and methodological issues. American Journal of Small Business, 11(3), 1–20.
Cooper, A. C., Woo, C., & Dunkelberg, W. C. (1988). Entrepreneurs’ perceived chances for success. Journal of Business Venturing, 3, 97–108.
Corbett, A. C. (2005). Experiential learning within the process of opportunity identification and exploitation. Entrepreneurship Theory and Practice, 29(4), 473–492.
Corbett, A. C. (2007). Learning asymmetries and the discovery of entrepreneurial opportunities. Journal of Business Venturing, 22(1), 97–118.
Corbett, A. C., & Hmieleski, K. M. (2007). The conflicting cognitions of corporate entrepreneurs. Entrepreneurship Theory and Practice, 31(1), 103–121.
Crossan, M. M., Lane, H. W., & White, R. E. (1999). An organizational learning framework: From intuition to institution. Academy of Management Review, 24(3), 522–537.
Crowe, E., & Higgins, E. T. (1997). Regulatory focus and strategic inclinations: Promotion and prevention in decision-making. Organizational Behavior and Human Decision Processes, 69, 117–132.
Daft, R. L., & Weick, K. E. (1984). Toward a model of organizations as interpretive systems. Academy of Management Review, 9(2), 284–295.
Davidson, P. A. (2004). Turbulence: An introduction for scientists and engineers. Oxford: Oxford University Press.
De Carolis, D. M., Litzky, B. E., & Eddleston, K. A. (2009). Why networks enhance the progress of new venture creation: The influence of social capital and cognition. Entrepreneurship Theory and Practice, 33(2), 527–545.
De Carolis, D. M., & Saparito, P. (2006). Social capital, cognition, and entrepreneurial opportunities: A theoretical framework. Entrepreneurship Theory and Practice, 30(1), 41–56.
Dess, G. G., & Beard, D. W. (1984). Dimensions of organizational task environments. Administrative Science Quarterly, 29, 52–73.
Dutta, D. K., & Thornhill, S. (2008). The evolution of growth intentions: Toward a cognition-based model. Journal of Business Venturing, 23, 307–332.
Guth, W., & Ginsberg, A. (1990). Guest editors’ introduction: Corporate entrepreneurship. Strategic Management Journal, 11, 5–15.
Hayes, J., & Allinson, C. W. (1994). Cognitive style and its relevance for management practice. British Journal of Management, 5, 53–71.
Higgins, E. T. (1998). Promotion and prevention: Regulatory focus as a motivational principle. In M. P. Zanna (Ed.), Advances in experimental social psychology (Vol. 30, pp. 1–46). New York: Academic Press.
Hmieleski, K. M., & Baron, R. A. (2009). Entrepreneurs’ optimism and new venture performance: A social cognitive perspective. Academy of Management Journal, 52(3), 473–488.
Hmieleski, K. M., & Corbett, A. C. (2006). Proclivity of improvisation as a predictor of entrepreneurial intentions. Journal of Small Business Management, 41(1), 45–63.
Hornsby, J. S., Kuratko, D. F., Shepherd, A. D., & Bott, P. J. (2009). Managers’ corporate entrepreneurial actions: Examining perception and position. Journal of Business Venturing, 24(3), 236–247.
Ireland, R. D., Kuratko, D. F., & Morris, M. H. (2006). A health audit for corporate entrepreneurship: Innovation at all levels, Part I. Journal of Business Strategy, 27(1), 10–17.
Krueger, N., & Dickson, P. R. (1994). How believing in ourselves increases risk taking: Perceived self-efficacy and opportunity recognition. Decision Sciences, 25(3), 358–400.
Leifer, R., McDermott, C., O’Connor, G., Peters, L., Rice, M., & Veryzer, R. (2000). Radical innovation: How mature companies can outsmart upstarts. Boston: Harvard Business School Press.
Lohrke, F. T., Holloway, B. B., & Woolley, T. W. (2010). Conjoint analysis in entrepreneurship research: A review and research agenda. Organizational Research Methods, 13(1), 16–30.
Lord, R. G., & Maher, K. J. (1990). Alternative information-processing models and their implication for theory, research, and practice. Academy of Management Journal, 15, 9–28.
Low, B., & MacMillan, I. (1988). Entrepreneurship: Past research and future challenges. Journal of Management, 14, 139–161.
Markides, C. C., & Geroski, P. A. (2004). Fast second: How smart companies bypass innovation to enter and dominate new markets. San Francisco: Jossey-Bass.
Markman, G., Balkin, D., & Baron, R. (2002). Inventors and new venture formation: The effects of general self-efficacy and regretful thinking. Entrepreneurship Theory and Practice, 27(2), 149–166.
McAllister, D. J., Kamdar, D., Morrison, E. W., & Turban, D. B. (2007). Disentangling role perceptions: How perceived role breadth, discretion, instrumentality, and efficacy relate to helping and taking charge. Journal of Applied Psychology, 92(5), 1200–1211.
McArthur, A. W., & Nystrom, P. C. (1991). Environmental dynamism, complexity, and munificence as moderators of strategy-performance relationships. Journal of Business Research, 23(4), 349–361.
McMullen, J.S., & Shepherd, D.A. (2002). Regulatory focus and entrepreneurial intention: Action bias in the recognition and evaluation of opportunities. Paper presented at the Babson-Kauffman Entrepreneurship Research Conference, Boulder, CO.
McMullen, J. S., & Shepherd, D. A. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur. Academy of Management Review, 31(1), 132–152.
Meyer, G. D., & Heppard, K. A. (2000). Entrepreneurship as strategy: Competing on the entrepreneurial edge. Thousand Oaks, CA: Sage Publications.
Miles, M. P., & Covin, J. G. (2002). Exploring the practice of corporate venturing: Some common forms and their organizational implications. Entrepreneurship Theory and Practice, 26(3), 21–40.
Miller, D., & Friesen, P. H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1–25.
Milliken, F. J. (1987). Three types of perceived uncertainty about the environment: State, effect, and response uncertainty. Academy of Management Review, 12(1), 133–143.
Mitchell, R., Busenitz, L., Lant, T., McDougall, P., Morse, E., & Smith, E. (2002). Toward a theory of entrepreneurial cognition: Rethinking the people side of entrepreneurship research. Entrepreneurship Theory and Practice, 27(2), 93–104.
Mitchell, R., Smith, B., Seawright, K., & Morse, E. (2000). Cross-cultural cognitions and the venture creation process. Academy of Management Journal, 43(5), 974–993.
Morris, M. H., Kuratko, D. F., & Covin, J. G. (2011). Corporate entrepreneurship and innovation. Cincinnati, OH: South-Western/Thomson Publishers.
Phan, P. H., Wright, M., Ucbasaran, D., & Tan, W. L. (2009). Corporate entrepreneurship: Current research and future directions. Journal of Business Venturing, 24(3), 197–205.
Shah, J., & Higgins, T. (1997). Expectancy x value effects: Regulatory focus as determinant of magnitude and direction. Journal of Personality and Social Psychology, 73(3), 447–458.
Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4), 448–469.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25, 217–226.
Shapero, A. (1984). The entrepreneurial event. In C. A. Kent (Ed.), The environment for entrepreneurship (pp. 21–40). Lexington, MA: DC Heath and Company.
Shaver, K., & Scott, L. R. (1991). Person, process, choice: The psychology of new venture creation. Entrepreneurship Theory and Practice, 16, 23–45.
Shrader, R. C., & Simon, M. (1997). Corporate versus independent new ventures: Resource, strategy, and performance differences. Journal of Business Venturing, 12, 47–66.
Sitkin, B. S., & Weingart, L. R. (1995). Determinants of risky decision-making behavior: A test of the mediating role of risk perceptions and propensity. Academy of Management Journal, 38(6), 1573–1592.
Stewart, W. H., & Roth, P. L. (2001). Risk propensity differences between entrepreneurs and managers: A meta-analytic review. Journal of Applied Psychology, 86(1), 145–153.
Stewart, W. H., & Roth, P. L. (2004). Data quality affects meta-analytic conclusions: A response to Miner and Raju (2004) concerning entrepreneurial risk propensity. Journal of Applied Psychology, 89(1), 14–21.
Stuart, R. W., & Abetti, P. A. (1990). Impact of entrepreneurial and management experience on early performance. Journal of Business Venturing, 5, 151–162.
Szulanski, G. (1996). Exploring internal stickiness: Impediments to the transfer of best practices within the firm. Strategic Management Journal, 17, 27–43. (Winter Special Issue).
Thaler, R. H. (1991). Quasi rational economics. New York: Russell Sage Foundation.
Venkataraman, S. (1997). The distinctive domain of entrepreneurship research. In J. A. Katz (Ed.), Advances in entrepreneurship, firm emergence, and growth (Vol. 3, pp. 119–138). Greenwich, CT: JAI Press.
Vroom, V. H. (1964). Work and motivation. San Francisco, CA: Jossey-Bass.
Ward, T. B. (2004). Cognition, creativity, and entrepreneurship. Journal of Business Venturing, 19(2), 173–188.
Wofford, J. C., & Goodwin, V. L. (1990). Effects of feedback on cognitive processing and choice of decision style. Journal of Applied Psychology, 75(6), 603–612.
Zahra, S. A., Jennings, D. F., & Kuratko, D. F. (1999). The antecedents and consequences of firm-level entrepreneurship: The state of the field. Entrepreneurship Theory and Practice, 24(2), 45–65.
Zhao, H., & Seibert, S. E. (2005). The mediating role of self-efficacy in the development of entrepreneurial intentions. Journal of Applied Psychology, 90(6), 1265–1272.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Garrett, R.P., Holland, D.V. Environmental effects on the cognitions of corporate and independent entrepreneurs. Small Bus Econ 45, 369–381 (2015). https://doi.org/10.1007/s11187-015-9636-2
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11187-015-9636-2