Session 163

Cognitive Perspectives

Track K

Date: Monday, October 8, 2012

 

Time: 16:30 – 17:45

Paper

Room: Meeting Hall V


Session Chair:

  • José Lejarraga, IE Business School

Title: “No VC is an Island”: Internal and External Contextual Influences on Venture Capital Decision Making

Authors

  • Jeffrey Petty, University of Lausanne
  • Marc Gruber, Swiss Federal Institute of Technology Lausanne
  • Dietmar Harhoff, Max Planck Institute for Innovation and Competition

Abstract: Drawing on social judgment theory, this study is one of the first attempts to integrate the content and process aspects of venture capital (VC) decision making in a dynamic model. Using a longitudinal data set of 2,486 investment decisions over the life of an investment fund, we investigate how, over time, the content and process aspects of the VC’s decision making are (i) increasingly constrained by factors related to the characteristics of the VC’s portfolio and (ii) affected by the overall investment climate. Analyzing both the internal and external contextual influences provides new insights and allows us to propose an updated, multi-level conceptual model of VC decision making. Our findings offer important new implications for the entrepreneurship, innovation, strategic decision making and operations management literatures.

Title: How do Different Resource-Providers Respond to Affiliation-Based Signaling?

Authors

  • Tom Vanacker, Ghent University
  • Daniel Forbes, University of Minnesota

Abstract: Drawing on signaling theory and information processing theory, we contend that a single act of affiliation will exert distinct influences on a firm’s ability to attract financial and human resources. We longitudinally track the extent to which 94 venture capital-backed firms attract financial and human resources. Results indicate that investors and employees respond to distinct attributes of the lead venture capital investor, and that the signaling effect is especially strong for firms in high-technology industries. Taken together, these findings deepen and extend our understanding of affiliation-based signaling by highlighting the complexity of the environments into which firms send signals.

Title: It’s Who You Are, Rather Than What You Know: On Task Role Allocations within an Entrepreneurial Team

Authors

  • HeeJung Jung, Imperial College London
  • Michael Pich, INSEAD
  • Balagopal Vissa, INSEAD

Abstract: The current paper raises a question of how firms started by founding teams allocate the roles among founding members. Based on experimental simulation on entrepreneurial challenge and in-depth survey conducted on three hundred twenty-nine MBA and EMBA participants, our research demonstrates that founding members’ social status influences decision on role allocation through status consistency motivation and this is more salient when founding team has low level of functional diversity. Particularly, previously high-ranked, white, senior, male founding members (diffuse status), founding members with startup experience (firm-relevant expertise as status), and founding members located in high network centrality (informal status) are more likely to take core roles such as CEO and CFO. However, the effect of higher social status on taking formal higher-ups is weaker when founding team members’ functional backgrounds are more diverse.

Title: Source Of Learning And Entrepreneurial Behavior: Experience-Based Vs. Description-Based Entry Decisions

Authors

  • José Lejarraga, IE Business School
  • Maud Pindard-Lejarraga, IE Business School

Abstract: We extend the emerging literature on entrepreneurial cognition by providing a framework to understand how the entry behavior of experienced and inexperienced entrepreneurs differs. Specifically, we discuss how the information source used by entrepreneurs to learn about a business opportunity (personal experience vs. descriptive sources) influences risk perception and subsequent behavior. To do so, we refer to an unexploited stream of research in behavioral decision making which explores differences in risk behavior as a function of the information source used to judge probabilities of success. Moreover, we consider the interaction between different stages of an industry life cycle and source of information as an interesting determinant of entrepreneurial behavior. We derive testable hypotheses, discuss their implications, and provide some preliminary empirical tests.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 126: Entrepreneurship & Stakeholders - The Future Research Agenda
Sun: 09:30 – 10:45
Session 127: Teaching Strategic Entrepreneurship
Sun: 11:15 – 12:30
Session 128: Poverty, Informal Firms & Strategic Entrepreneurship
Sun: 15:15 – 16:30
Session 157: Financing Entrepreneurial Ventures
Session 161: Entrepreneurial Growth
Mon: 08:00 – 09:15
Session 158: Corporate Venture Capital
Session 175: Austrian Economics & Creative Destruction
Mon: 09:30 – 10:45
Session 178: Institutional Theory & New Ventures
Session 180: Pushing the Bounds of Agency Theory
Mon: 13:30 – 14:45
Session 159: Exploration, Exploitation, and Ambidexterity
Session 169: Spinoffs, Spinouts, and Labor Mobility
Mon: 16:30 – 17:45
Session 162: New Venture Strategy & Innovation
Session 163: Cognitive Perspectives
Tue: 08:00 – 09:15
Session 164: IPOs
Session 170: Emerging Markets
Tue: 11:00 – 12:15
Session 160: Corporate Venturing and Intrapreneurship
Session 179: Social Networks within and across Firms
Tue: 14:15 – 15:30
Session 166: Institutional Aspects of Entrepreneurship
Session 167: Firm Boundaries
Tue: 15:45 – 17:00
Session 174: Social Networks & Entrepreneurship
Session 176: Value Capture & Appropriability
Tue: 17:30 – 18:45
Session 168: Uncertainty, Ambiguity, and Sense-Making
Session 173: New Venture Creation


Strategic Management Society

Prague