Rule-based Company Focused Entrepreneurial Opportunity Identification And Decision-making Mechanism

Market economy has all of the participants enhanced the sense of urgency. Entrepreneurial Firms cast round for the new opportunities proactively. As the role of the decision makers, the entrepreneurs have the responsibility of opportunity recognition (OR). We confirmed three theoretical issues unresolved: (1)What contents of the opportunity were identified by the entrepreneurs?(2)How can they recognize the specific entrepreneurial opportunity?(3)Why they choose those opportunities while reject others. Four studies were conducted to uncover the causality and mechanism of OR, as well as the cognitive characteristics during the process of decision making.Study 1 explored the construct of OR and its formation mechanism: (1)We certified OR with the model of second-order six factors, through the exploratory and confirmatory factor analysis. The second-order factors were profitability recognition and feasibility recognition. The former referred to the entrepreneurial interpretation of opportunity profitability and potential market distribution which contained three first-order factors (newness recognition, potential value recognition, and durability recognition);the latter referred to the interpretation of opportunity feasibility and controllability which consisted of three first-order factors (practicality recognition, uniqueness recognition, and desirability recognition). (2)We investigated the main and interactive effects on the OR. The results indicated entrepreneurial alertness (EA), prior knowledge (PK), the interaction of EA and PK, the interaction of EA and innovative cognitive styles were the determinant predictors of profitability recognition. Meanwhile, feasibility recognition was both affected by PK, the interaction of PK and innovative cognitive styles. Furthermore, the constructs of EA and PK were validated, EA had three dimensions (sensitive foresight, explorative prospecting and redefining framework), and PK had two components (special interest and industrial knowledge).Study 2 analyzed the criterion model and causal model of entrepreneurial decision making, and their moderating effects.(1)A criterion model of entrepreneurial decision making was established with three dimensions: the speed, accuracy and identity of the decision making. Each reflected the features of decision process, result and effectiveness respectively. (2)Using the structural equation modeling, we found the causal model fully mediated by OR had best fitness, i.e. entrepenreutial decision was the direct outcome of OR rather than EA or PK. Farther Regression analysisexplained the complex relationship between the first or second order dimension of OR and the criteria.(3)Based on regulatory focus (RF) theory, a typological model of entrepreneurial decision makers was put forwarded. Entrepreneurs with double high levels of promotion focus (Pro) and prevention focus (Pre) proved to be the most accurate;with high level of Pro and low level of Pre proved to be the rapidest;with high level of Pre and low level of Pro obtained the highest degree of identity. Varied with the FR, the relationship between OR and decision making emerged as three correlations (closed, alternative and contingent).(2)Based on the prospector theory, we found several differences among the criteria in terms of entrepreneurial modes (EM). The mode of opportunity adoption (OA) possessed higher speed and identity than the mode of opportunity substitution (OS), while the accuracy of decision making has no changes. The fact of feasible recognition seemed less implication to OA concluded the endowment effect elicited by OS.Study 3 explained the mechanism of corporate entrepreneurial decision making through experimentation simulations. With the multi-factor mixed design, four variables were manipulated to examine the mechanism of the process, outcome and psychological aspects, that is the situation of decision (RF), task of decision (EM), condition of decision (past opportunity, PO) and object of decision (opportunity faced, OF).?On the numbers of accepted, the main effects consisted of FR, EM and OF;the interactive effects involved RF*EM, RF*PO, RF*OF, EM*OF and PO*OF;the simple effecets included RF and EM. (2)On the confidence and timing of decision making, the main effects consisted of FR, EM, PO and OF;the interactive effects involved RF*EM, RF*PO, RF*OF, EM*PO, PO*OF;the simple effects included EM, PO, and RF. (3)0n the ratio of signal detection, discrimination and criterion of judgment, the degree of influence diminished according to RF-*EM—OF-*PO. The condition of Pre, OS, high risk level of OF, and low risk level of PO would elicited higher level of judgment criterion and discrimination than their counterparties.In all subjects, the criterion of judgment was relatively lower than discrimination.Finally, we summarized the main conclusions, theoretical progresses, practical implications, resesrch limitations and future directions.