Entrepreneurs are unique individuals who differ significantly from other types of leaders, such as managers and capitalists. The main aspect of the entrepreneurs is their capacity to transform ideas and opportunities into business.
The table below pinpoints. the main characteristics and behaviour of entrepreneurs, capitalists and managers.
(Cuervo, Ribeiro and Roig, 2007)
Another very important aspect that defines the entrepreneurs is the Entrepreneurial Mindset (EM). The EM is an ability and willingness of individuals to rapidly sense, act, and mobilize in response to a judgmental decision under uncertainty about a possible opportunity for gain (Shepherd, Patzelt and Haynie, 2010). The EM leads entrepreneurs to think, reason,make decisions, plan and set goals in relatively unique ways (Baron, 2014).
The influencing attributes of the EM are as follows (Naumann, 2017).
Attribute 1: Cognitive tuning and goal orientation
The mindset changes over time depending on the activity an individual is involved and has the capacity to influence individuals’ cognition for that activity, which is tuned towards that activity to ensure that the task at hand is done most effectively.
Attribute 2. Heuristic-based decision logic
The use of heuristics and biases is useful in situations of decision making, in which involves high complexity, uncertainty, strong emotion and time pressure. This is because entrepreneurs need to make decisions quickly to use their window of opportunity and to encourage their stakeholders to trust.
A heuristic often used by entrepreneurs is representativeness, which is the willingness to generalise from small samples. Individuals tend to draw conclusions from few observations about people or of a situation and infer that this represents the reality.
Besides heuristics, entrepreneurs make use of biases to cope with complexity and to make decisions:
Attribute 3: Alertness
Alertness refers to attentiveness to new opportunities and ability to identify value unexpectedly. It is not the possession of knowledge that leads to the identification of opportunities, but the alertness to the information.
Attribute 4: Prior knowledge
The combination of work experience, personal events, education and social networks generates knowledge. Individuals possess different knowledge due to their past experiences and sources of information received.
Attribute 5: Social interaction
Social interaction (or social capital) is created through cooperative trustful relationships with stakeholders, which requires time, energy and financial resources. It is through social interactions that entrepreneurs can access information, make connections and see patterns evolve. Entrepreneurs can leverage their networks and make use of the resources involved in unique ways.
The previous five EM attributes explored up to now are the core attributes of EM. These five core attributes share a common characteristic: the effect of their respective cognitive processes translates into recognisable and observable behaviour. The next two attributes of EM are of metacognitive nature and impacts the other five as well.
Attribute 6. Metacognition
The first metacognitive attribute is the metacognition itself, which consists of the thinking about thinking and applying different strategies depending on the context and task.
Entrepreneurs are different in the way they think and act through their different metacognitive abilities and interpretation of the environment. By reflecting on their own thinking process prior to decision-mak- ing, entrepreneurs can adapt their cognition and consequently their actions.
Attribute 7. Cognitive adaptability
The second meta-cognitive attribute is cognitive adaptability. Cognitive adaptability is the ability to be dynamic, flexible, and self-regulating in one’s cognitions given dynamic and uncertain task environment.
The higher the uncertainty in a situation is, the higher the awareness is, and the more strategies will be applied in the thought process (e.g. scenario planning, brainstorming).
Therefore, in order to understand the EM, it is necessary to understand its seven influencing attributes. The figure below present an overview of the seven attributes of the EM (based on Naumann, 2017).
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