The influence of the positive affective trait on the willingness to act entrepreneurially: The mediating effect of opportunity evaluation

This article extends previous literature on opportunity evaluation by analysing how positive affect influences opportunity evaluation and the subsequent willingness to act entrepreneurially. We draw on two mediational channels (i.e., the affect-to-affect-to-outcome and affect-to-cognition routes) regarding the influence of affect on positive outcomes upon arguments that opportunity evaluation comprises of the cognitive representations of the focal opportunity and of oneself. Specifically, we analyse the mediating effects of the image of the opportunity and self-efficacy in the relationship between positive affect and the willingness to act entrepreneurially. We test our hypotheses on a sample of nascent entrepreneurs participating in training programmes in six Spanish incubators whom were asked to evaluate their own opportunities. Our findings show that positive affect exerts a positive indirect effect through the image of the opportunity, but do not indicate any mediating effect of self-efficacy. These findings may help entrepreneurs understand the affective subjectivity of their opportunity assessments.

Comprehensive Opportunity Assessment Using Commercial and Moral Intensities

We propose a partial theory explaining the processing of opportunities by individuals in organizations, specifically for opportunities with both commercial and moral significance (measured as intensities). The goal of such theorizing is to identify and analyze the range of interactions that the ethical and economic impacts of an opportunity can have so that managers can make better decisions on their exploitation and modification. We explain why and how there is variance in the processing of the ideas behind such opportunities as caused by their moral and commercial intensities. We explain the likely interactions between those two intensities, and when they occur and what can result. Doing so complements work in social entrepreneurship and corporate social responsibility by filling the gaps of the possible combinations of economic and ethical interactions. We provide these explanations by leveraging a precedent model that had adapted a standard knowledge-processing method to ethical decision-making issues. The explanations resonate because our model leverages the traditional textbook entrepreneurship opportunity evaluation criteria to provide a holistic view of an underlying idea’s commercial intensity, a view that aligns with the driving assumption that the focal decision-makers are boundedly rational.

Impact of positive illusions and experience on decision to invest in own new venture

Objectives. The objective of this study is threefold: 1) to examine the effect of positive illusions on risk taking manifested in opportunity evaluation and investment decision; 2) to examine the mediating role of risk attitudes on the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision; 3) to examine the moderating effect of experience on the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. Sample and setting. Research sample comprised 132 entrepreneurs aged between 19 and 63 (M = 40.6; SD = 10.8) owning small, medium, and large-sized businesses. Hypotheses. 1) Individuals exhibiting higher positive illusions (overconfidence, unrealistic optimism, illusion of control) would take higher risk manifested in opportunity evaluation and investment decision. 2) Risk attitudes will mediate the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. 3) Experience will moderate the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. Statistical analysis and results. 1) Using simple linear regression it was found that only unrealistic optimism for rare positive events and illusion of control predicted risk taking manifested in investment decision. None of positive illusions explained opportunity evaluation. 2) Using PROCESS macro for mediation analysis it was found that domain-specific risk perception, rather than general risk tolerance, is statistically significant mediator of the relationship between unrealistic optimism for rare positive events and investment decision. 3) Moderation analysis via PROCESS macro showed that only entrepreneurial experience moderates the relationship between unrealistic optimism for rare positive events and investment decision using own savings. The limitations concerning gender and domain specificity of methods are discussed in the study.

Impact of positive illusions and experience on decision to invest in own new venture

Objectives. The objective of this study is threefold: 1) to examine the effect of positive illusions on risk taking manifested in opportunity evaluation and investment decision; 2) to examine the mediating role of risk attitudes on the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision; 3) to examine the moderating effect of experience on the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. Sample and setting. Research sample comprised 132 entrepreneurs aged between 19 and 63 (M = 40.6; SD = 10.8) owning small, medium, and large-sized businesses. Hypotheses. 1) Individuals exhibiting higher positive illusions (overconfidence, unrealistic optimism, illusion of control) would take higher risk manifested in opportunity evaluation and investment decision. 2) Risk attitudes will mediate the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. 3) Experience will moderate the relationship between positive illusions and risk taking manifested in opportunity evaluation and investment decision. Statistical analysis and results. 1) Using simple linear regression it was found that only unrealistic optimism for rare positive events and illusion of control predicted risk taking manifested in investment decision. None of positive illusions explained opportunity evaluation. 2) Using PROCESS macro for mediation analysis it was found that domain-specific risk perception, rather than general risk tolerance, is statistically significant mediator of the relationship between unrealistic optimism for rare positive events and investment decision. 3) Moderation analysis via PROCESS macro showed that only entrepreneurial experience moderates the relationship between unrealistic optimism for rare positive events and investment decision using own savings. The limitations concerning gender and domain specificity of methods are discussed in the study.

Perceiving and capturing opportunities through social interaction

This chapter presents an entrepreneurship-as-networking perspective on opportunity perception, evaluation, and action. Entrepreneurial opportunities are seen as relationally constituted; thus, social networks are a fundamental aspect of all opportunity-related processes. The network ties upon which entrepreneurs can draw largely influence their opportunity perceptions and, conversely, entrepreneurs intentionally shape their networks to get to those opportunities. In opportunity evaluation, the feedback of others is essential to identify an opportunity’s feasibility and desirability. At the same time, these others often engage in shaping and co-creating the opportunities. In opportunity action, entrepreneurs tend to create strong embeddedness by forming their teams and hiring their employees from among their close ties. By discussing the key networking mechanisms of embedding, accessing, transferring, diversifying, and socializing for each of these opportunity-related processes, the authors highlight both the positive and negative generative aspects of the social interactions and social networks in relation to entrepreneurial opportunities.

TEMPORAL MEDIATION OF UNCERTAINTY WITHIN ENTREPRENEURIAL OPPORTUNITY EVALUATION

Limited research within entrepreneurship is available on how time affects entrepreneurs’ decision-making. We try to bridge this gap by understanding how temporal factors affect opportunity evaluation and how they affect uncertainty. Basing our hypotheses on Construal Level Theory, we ran two experiments and found that individuals modify their evaluation of the same opportunity when evaluating a distant future versus a near future event. Opportunities in the near future are more highly evaluated than distant future opportunities. Moreover, we demonstrate experimentally that uncertainty affects opportunity evaluation.

A moderation approach to online social interaction in entrepreneurship using the effectuation and causation theory

Recently, there has been a growth in digital technology use and social media adoption by individuals, including entrepreneurs, that has changed the way individuals and businesses communicate and interact (Chatterjee & Kar, 2020; Harrigan, Miles, Fang, & Roy, 2020). Despite this, little is known about how the adoption of online social interaction affects entrepreneurial processes, especially opportunity evaluation. Through a moderation approach, this empirical study sought to fill the gap by investigating the effect of social interaction via social media on opportunity evaluation, specifically if the effect of online social interaction on opportunity evaluation depends on effectuation and causation. Using a quantitative method approach, survey questionnaires were used to collect data from a random sample of young entrepreneurs in Ghana. The questions were evaluated with SPSS and later exported to STATA for data analysis. A total of 383 questionnaires were analysed. The study found that the interaction effect from the linear regression model showed that although there is a positive relationship between effectuation and social interaction, while causation interacts negatively with social interaction, the moderation effects were not statistically significant. It is recommended that future research considers other factors that may facilitate or hinder the opportunity evaluation process and to what extent they do, which may lead to a better understanding of targeting entrepreneurial training.