The Entrepreneur as Business Leader

The Entrepreneur as Business Leader

Cognitive Leadership in the Firm

Silke Scheer

An entrepreneur who decides to found a firm and to hire employees has to tackle two central problems: their employees’ coordination and motivation. Drawing on findings from cognitive, social and organizational psychology, this book sheds new light on the relevance of bounded rationality and social learning in the process of leadership. Silke Scheer bridges some of the missing links that can be identified within the theory of cognitive leadership and demonstrates how its scope can be broadened by investigating group level processes, and how they can have an impact on the socialization of newcomers.

Chapter 2: The Theory of Cognitive Leadership and its Foundation in Cognitive Psychology

Silke Scheer

Subjects: business and management, business leadership, entrepreneurship, economics and finance, economic psychology, politics and public policy, leadership


Founding a firm and being an entrepreneur almost certainly involves exerting leadership over other people. At least, once the workload exceeds the capacities of the entrepreneur herself. Although a lot of people have to do it everyday, leading other people or in other, more informal words getting them to do what one wants them to do is at times difficult. Numerous research programs have been conducted on the subject, both theoretical and empirical in nature (for an overview see Yukl 2002). Some of these projects have approached the subject from a static perspective focusing, for example, on the leader’s traits (for a meta-analysis on this subject see Zaccaro et al. 2004); others have approached it from a dynamic perspective focusing, for example, on the exchange between the leader and her subordinates (Leader–Member Exchange Theory, Dansereau et al. 1975; Graen and Cashman 1975). These, however, discuss the leadership process on the background of individuals or work groups in incumbent firms that have to be led and their interaction with the leader. On the other hand, research projects deal with the development of newly founded firms and factors that contribute to their growth or decline (see, for example, Greiner 1972; Clifford 1973; Albach et al. 1985; Garnsey 1998; Kauffeld et al. 2002). The theory of cognitive leadership combines both perspectives by focusing on the dynamics of leadership shortly after the founding of a firm, that is, when a person has a business conception, founds a company and from thereon has to...

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