The Role Of Affect In Entrepreneural Ideas

1042-2587 © 2011 Baylor University

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The Role of Affect in the Creation and Intentional Pursuit of Entrepreneurial Ideas
James C. Hayton Magdalena Cholakova

The creation and intentional pursuit of entrepreneurial ideas lies at the core of the domain of entrepreneurship. Recent empirical work in a number of diverse fields such as cognitive psychology, social cognition, neuroscience,and neurophysiology all suggest that dual processes involving affect and cognition have a significant impact on judgment and decision making. Existing cognitive models ignore this significant role. In this article we develop a framework for understanding the role of affect on idea perception and the intention to develop the entrepreneurial idea. We present a set of testable propositions that linkaffect to entrepreneurial idea perception through its influence on attention, memory, and creativity. A second set of propositions links affect to the intention to pursue these ideas further. We explore the boundary conditions and moderators of the proposed relationships, and discuss the implications of this framework for existing cognitive and psychological perspectives on entrepreneurship.

heemergence of entrepreneurial opportunities represents the core of the phenomenon of entrepreneurship (e.g., Kirzner, 1979; Shane & Venkataraman, 2000; Venkataraman, 1997). From the perspective of the potential entrepreneur, the process begins with an idea. It continues with a range of actions including determining whether the idea is attractive and feasible enough to warrant further attention,gathering information to reduce uncertainties related to the value and feasibility of the idea, and perhaps adapting the original idea to meet newly discovered facts (e.g., Dimov, 2007a, 2010; Haynie, Shepherd, & McMullen, 2009; McMullen & Shepherd, 2006; Sarasvathy, 2001, 2007; Shane, 2003). Understanding these processes requires examination of the microprocesses by which entrepreneurial ideas andintentions are represented and interpreted in the minds of those who develop them (Gaglio, 2004; Gaglio & Katz, 2001; Mitchell, Smith, Seawright, & Morse, 2000; Shaver & Scott, 1991). Studying the cognitive processes of entrepreneurs has shed a great deal of light on the ways in which entrepreneurs frame their world, learn from it, and think differently about economic opportunity fromnon-entrepreneurs (e.g., Baron, 1998, 2004; Busenitz & Arthurs, 2007; Corbett, 2007; Gaglio; Gaglio & Katz; Krueger, 2007; Mitchell et al.). For example, entrepreneurs tend to be more optimistic and

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Please send correspondence to: James C. Hayton, tel.: (39) 02-5836-2628; e-mail: j.hayton@newcastle.ac.uk, and to Magdalena Cholakova at m.cholakova@gmail.com.

January, 2012 DOI:10.1111/j.1540-6520.2011.00458.x
etap_458 41..67

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overconfident, they frame risk in quite different ways from non-entrepreneurs, rely upon heuristic thinking more readily, and tend to be more able to adapt their cognitive schemata in ways that support entrepreneurial actions (e.g., Busenitz & Barney, 1997; Gaglio; Gaglio & Katz; Hmieleski & Baron, 2009; Sarasvathy, Simon, & Lave, 1998; Simon & Houghton, 1999).While the growing body of knowledge concerning entrepreneurial cognition has led to significant advances, focusing on cognitive processes presents an incomplete picture of the functioning of the entrepreneurial mind (Baron, 2008; Camerer, Loewenstein & Prelec, 2005; Cohen, 2005). In addition to cognition, affective processes exert significant influence on judgment and behavior (e.g., Cohen, 2005; Libet,1985; Zajonc, 1980, 1984). Affect is a broad term that includes emotions and moods, such has happiness, sadness, fear, and anger, and more fundamental homeostatic drives such as hunger and thirst. Recent neuroscientific evidence has made it clear that cognition and affect are two distinct but closely intertwined processes that involve the activation of different parts of the brain (e.g., Cohen)....