Abstract
The rich literature on entrepreneurial cognition springs from a fundamental question: ‘How do entrepreneurs think?’ The enterprising actor is central to the entrepreneurship, yet until the emergence of cognitive school in entrepreneurship, researchers struggled to explain what makes entrepreneurs different from the rest of the population. As explained in Chapter 1 of their book, Shepherd and Patzelt’s goal here is to ‘provide a cohesive big picture of the academic literature on entrepreneurial cognition (p. 2).
Venkataraman (1997) introduced entrepreneurship scholars to the novel insight – from Austrian economics – that different people will discover different opportunities because they possess different prior knowledge, which was empirically supported in Shane’s (2000) seminal study of eight entrepreneurs who exploit a single invention. Chapter 2 discusses research on prior knowledge and the pursuit of new opportunities of entrepreneurs. Prior knowledge is a double-edged sword, as it can help the entrepreneur quickly identify useful new ideas, yet may also block creativity by constraining one to their existing ‘knowledge corridor’. The chapter favourably discusses Chatterji et al.’s (2008) research that physicians contribute almost 20% of the patents in a sample of more than 26,000 patents. However, the finding that 80% of new patents for medical device innovation comes from non-doctors seems to run counter to the book’s claim that professionals’ specialised knowledge makes them particularly capable of identifying new opportunities in their field.
It is well-known that some people are more motivated than others to engage in and persist with entrepreneurship, although our knowledge about why this is the case is more limited. Chapter 3 discusses the role of intuitively obvious motivators (such as financial factors) and also highlight less observed motivators, such as physical and psychological health, personal values and perseverance. The discussion around fear and other limiting factors, such as an individual’s inability to pursue employment acting as a positive motivating force, is particularly interesting for researchers and empowering for potential entrepreneurs.
Since Ocasio’s (1997) seminal work, management scholars are well-aware that attention is a finite resource. The judicious allocation of attention to critical entrepreneurial tasks is the topic of Chapter 4. Much research in this area takes a top-down perspective, such as looking at ‘knowledge structures’ that allow entrepreneurs to build subjective representations of the environment that can be used to shape subjective decisions or behaviours. Perhaps equally important, but less studied, is the bottom-down perspective, which emphasises the possibility that prominent features of the environment capture people’s attention whether or not they are anticipated.
Chapter 5 deals with the issue of self-identity among entrepreneurs, grounding it in the constant struggle between the psychological need to feel unique and different from others on the one hand and the relational need to belong on the other hand. The entrepreneurial role seems to be better at helping people meet their distinctiveness need, but their belongingness need may go unmet as they spend more and more time at work. Family firms provide an interesting context for balancing the competing needs of distinctiveness and belongingness, but working together with family members can engender new conflicts that are detrimental to work and personal life. All entrepreneurs have multiple identities (e.g. employer, parent or sibling), and some entrepreneurs are good at compartmentalising identities, such that their identity at work is clearly separated from their identity at home.
Chapter 6 focuses on the ‘emotional rollercoaster’ of an entrepreneurial journey. Passion, arguably the most-studied emotion in the entrepreneurship literature, is crucial for people engaged in starting and growing a new venture, but harmonic passion is desirable and obsessive passion can be detrimental. Emotional displays, which refer to noticeable reactions in voice, facial expressions and behaviour that indicate one’s currently experienced feelings, of entrepreneurs are observed by other stakeholders and in turn impact their emotional experiences and motivation for entrepreneurial action.
The research discussed in Chapters 2 through 6 is summarised in Chapter 7, which should be helpful for readers interested in getting the gist of the book either before or after reading the individual chapters. Shepherd and Patzelt also recommend pertinent areas of further research for each of the five major cognitive dimensions discussed here: prior knowledge, motivation, attention, self-identity and emotions. An important facet of entrepreneurial cognition is creative imagination (Chiles et al., 2007), which is not covered in this book, but is perhaps as important as prior knowledge to explain how entrepreneurs think. Nevertheless, the book is a useful resource for researchers interested in understanding the cognition of entrepreneurs. Doctoral students and newcomers will find the book especially helpful to quickly acquaint themselves with what has been already done in the entrepreneurial cognition research and future possibilities in this field of inquiry.