Maw Der Foo

Opportunity Evaluation under Risky Conditions: The Cognitive Processes of Entrepreneurs

Even though the entrepreneurship literature places much emphasis on opportunity recognition, little is known about how entrepreneurs actually evaluate opportunities. This study uses a cognitive approach to examine opportunity evaluation, as the perception of opportunity is essentially a cognitive phenomenon. We present a model that consists of four independent variables (overconfidence, belief in the law of small numbers, planning fallacy, and illusion of control), a mediating variable (risk perception), two control variables (demographics and risk propensity), and the dependent variable (opportunity evaluation). We find that illusion of control and belief in the law of small numbers are related to how entrepreneurs evaluate opportunities. Our results also indicate that risk perception mediates opportunity evaluation.

Exploring the Heart: Entrepreneurial Emotion is a Hot Topic

Entrepreneurial emotion refers to the affect, emotions, moods, and/or feelings—of individuals or a collective—that are antecedent to, concurrent with, and/or a consequence of, the entrepreneurial process, meaning the recognition/creation, evaluation, reformulation, and/or the exploitation of a possible opportunity. In this paper, we explore this working definition of entrepreneurial emotion, what it means, and some important advances the field has made in this area of research. We also highlight fundamental avenues for future research that are sorely in need of study. Finally, we introduce the seven papers in this special issue on the Heart of Entrepreneurship and how they move the conversation on entrepreneurial emotion forward.

Emotions and Entrepreneurial Opportunity Evaluation

Emotions may affect opportunity evaluation yet emotions’ influence in entrepreneurship research has been neglected. Findings from the two studies in this paper indicate that appraisal dimensions of emotions influence risk perceptions and preferences. In Study 1 (n = 187), the participants’ scores on risk perception for a venture scenario were significantly lower for anger and happiness–induced participants (emotions associated with outcome certainty and control) than for fear– and hope–induced participants (emotions associated with outcome uncertainty and a lack of outcome control). In Study 2 (n = 66), the entrepreneurs’ preference for the higher value but uncertain outcome related positively to their scores on trait anger and trait happiness.

Using experience sampling methodology to advance entrepreneurship theory and research

The authors propose the use of experience sampling methodology (ESM) as an innovative methodological approach to address critical questions in entrepreneurship research. ESM requires participants to provide reports of their thoughts, feelings, and behaviors at multiple times across situations as they happen in the natural environment. Thus, ESM allows researchers to capture dynamic person-by-situation interactions as well as between- and within-person processes, improve the ecological validity of results, and minimize retrospective biases. The authors provide a step-by-step description of how to design and implement ESM studies beginning with research design and ending with data analysis, and including issues of implementation such as time and resources needed, participant recruitment and orientation, signaling procedures, and the use of computerized devices and wireless technologies. The authors also describe a cell phone ESM protocol that enables researchers to monitor and interact with participants in real time, reduces costs, expedites data entry, and increases convenience. Finally, the authors discuss implications of ESMbased research for entrepreneurs, business incubators, and entrepreneurship educators.

THE EFFECTS OF CUSTOMER PERSONALITY TRAITS ON THE DISPLAY OF POSITIVE EMOTIONS

We extended past research on the display of positive emotions within customer service settings by focusing on customer traits. Adopting an emotional contagion perspective, we found that customer tr...

Unraveling the daily stress crossover between unemployed individuals and their employed spouses.

This study examined the dynamic relationship of distress levels between spouses when one is unemployed (and looking for a job) while the other is engaged in full-time employment. Using the diary survey method, we sampled 100 couples in China for 10 days and tested a model comprising three stress crossover mechanisms: the direct crossover, the mediating crossover, and the common stressor mechanisms. Results supported the direct crossover and common stressor mechanisms. Other stressors (e.g., work–family conflict and negative job search experience) were also related to distress of the unemployed individuals and their employed spouses. Additionally, we found a three-way interaction involving gender, marital satisfaction, and distress levels of employed spouses. We discuss how the study contributes to the unemployment and stress crossover literatures.

Imprinting Effects of Founding Core Teams on HR Values in New Ventures

Using the upper echelon perspective and imprinting arguments as key theoretical lenses, this paper examines how characteristics of new venture core teams influence internal consistency and distinctiveness of human resources (HR) values at the early–growth stage of the firm. We found that shared organizational experience among founding core team members positively predicts internal consistency and distinctiveness of the dominant HR values, whereas functional diversity positively predicts distinctiveness of these values. Contrary to our prediction, when the levels of both prior shared organizational experience and functional diversity are high, positive effects turned negative, indicating more complex interaction effects between the two team characteristics.

Dyadic Effects in Nonverbal Communication: A Variance Partitioning Analysis

Using Kennys (1994) Social Relations Model, a block-round robin design provided the first reported evidence for dyadic effects in nonverbal communication. That is, some dyads were systematically more or less accurate than the individual-level skill of perceivers and expressors would predict. This dyadic effect appears to be similar in magnitude to individual differences in emotional perception, a topic garnering extensive research attention over several decades. Results generally replicated for judgements across genders and across two cultural groups. These preliminary findings have implications for research on emotional intelligence and other models of affective skill, raising the possibility that accuracy in nonverbal communication combines individual differences with factors beyond the individual level.

Beyond Affective Valence: Untangling Valence and Activation Influences on Opportunity Identification

Research surrounding how entrepreneurs identify opportunities focuses on the impact of affective valence on entrepreneurs’ cognitive processes. Extending this body of research, we theorize how affective valence and affective activation work together to impact opportunity identification. We emphasize that to understand affective influences, both valence and activation should be included because they each influence active search effort and knowledge integration. We discuss the theoretical and practical implications of our study and suggest that future research should include more dynamic relationships among affect and entrepreneurial outcomes.

Member Experience, Use of External Assistance and Evaluation of Business Ideas

How do members’ experience and external interactions shape evaluation of the team’s business idea? With a sample of 74 teams that participated in a business idea competition, we showed that experience as defined by size, mean work experience, and assistance from individuals with business founding experience related positively to the teams’ business idea evaluations. The benefits of external founders are more pronounced for smaller than for larger teams. Having a founder in the team did not relate to idea evaluation but interaction effects showed smaller sized teams had worse evaluations if they did not have a founder in the team.