A General Theory of Entrepreneurship

A General Theory of Entrepreneurship

The Individual-Opportunity Nexus

New Horizons in Entrepreneurship series

Scott Shane

In the first exhaustive treatment of the field in 20 years, Scott Shane extends the analysis of entrepreneurship by offering an overarching conceptual framework that explains the different parts of the entrepreneurial process – the opportunities, the people who pursue them, the skills and strategies used to organize and exploit opportunities, and the environmental conditions favorable to them – in a coherent way.

Chapter 5: Psychological Factors and the Decision to Exploit

Scott Shane

Subjects: business and management, entrepreneurship

Extract

As I explained in the previous chapter, opportunity exploitation requires people to act on opportunities that they have discovered, indicating that individual characteristics are important to determining who exploits entrepreneurial opportunities. In addition to the non-psychological factors that were discussed in Chapter 4, several psychological factors also influence the tendency of people to exploit entrepreneurial opportunities. Psychological characteristics influence the likelihood that people will exploit opportunities because these characteristics lead people to make different decisions about opportunities than other people with the same information and skills. It is important to note that psychological characteristics are not sufficient conditions and so do not cause people to exploit entrepreneurial opportunities. Rather, they influence the exploitation decision. Even if these characteristics are present, people might decide not to exploit opportunities. While researchers have analysed a wide range of psychological factors, they can be organized into three broad categories: aspects of personality and motives, core selfevaluation and cognitive characteristics (see Figure 5.1). Aspects of personality and motives Core self-evaluation Cognitive properties Figure 5.1 The psychological characteristics that influence the decision to exploit 96 Shane 02 chap 5 7/4/05 3:36 PM Page 97 Psychological factors and the decision to exploit 97 The first two of these categories are composed of individual differences that researchers have argued are largely stable over time. People have certain aspects of personality and motives, and core self-evaluation, and these things tend to remain the same over long stretches of time. People can and do change their personalities, motivations and...

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