The effect of cognitive style on entrepreneurial judgment: An analogical analysis of entrepreneurial opportunities

How do people make judgments of entrepreneurial opportunities? Making the judgment about the attractiveness of an opportunity is the most uncertain stage of the entrepreneurial process. This dissertation examines key factors related to the individual characteristics and the nature of the opportunities to answer that question. I develop a model of an entrepreneurial opportunity as a novel way of satisfying a customer need. Based on cognitive explanations for the sources of novel ideas, I suggest that each entrepreneurial opportunity can be thought of as an analogy. Such modeling gives rise to two dimensions that differentiate among opportunities.;The first dimension is the similarity of the domains contained in the analogy underpinning the opportunity. Some opportunities are the consequences of analogies between two similar domains whereas others rely on two distant domains. The second dimension is the original inspiration behind the analogy. Some opportunities are inspired by the similarity between the needs in two domains whereas other opportunities are inspired by the similarity between two routines.;Following the cognitive perspective, I utilize the extant psychology literature to differentiate among individuals. Cognitive style research suggests that some individuals are analytic while others are intuitive. The developed model proposes hypotheses that predict the evaluation of an opportunity based on the individual's cognitive style and the two opportunity characteristics mentioned above.;I test the hypotheses with a hypothetical scenario experiment. The sample consists of undergraduate business students at a major U.S. university. The delivery is through a web-based system; however the subjects participate at a controlled lab environment in order to minimize the effects of external factors. Each participant answers questions about three hypothetical scenarios, fills out a cognitive style questionnaire, and provides data for several control variables.;The results are consistent with the analogical analysis of the opportunity. Similar opportunities and need-driven opportunities are judged more positively than distant opportunities and routine-driven opportunities. However, the hypotheses about cognitive style are not supported. There seems to be no difference between intuitive and analytical individuals when they are engaged in the activity.