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Building the Future Economy with Inclusive Entrepreneurship

According to this perspective, the role of leadership is basically reactive, and there is no specific sequence that can be applied to the course of internal development for all companies. The other perspective is based on the organizational life-cycle models, which consider that companies change in a sequence of predictable stages, partly motivated by internal environmental conditions, but mainly due to complex maturation factors within the organization.

The companies are treated as biological organisms: Authors such as Kelley and Marram , Greiner , Adizes , and Churchill and Lewis present different developmental models for small businesses, following the logical evolution of the stages during their life-cycle. While there is a consensus among researchers that the environment influences organizational development, the internal perspective suggests that the entrepreneur assumes a more active than reactive role in the development and success of the venture.

It also considers that the affective and cognitive abilities of entrepreneurs evolve over time, allowing them to face hostile environments, independent of barriers, lack of resources or any other challenge that may arise along the way. We have adopted this perspective in our framework. Values and Affective and Cognitive Aspects. Studies in different areas of the human and social sciences have contributed to enhancing the understanding of entrepreneurial behavior and the phenomenon of entrepreneurship.

Understanding the entrepreneurial process: a dynamic approach

Schumpeter was the precursor in adopting an economic perspective towards entrepreneurship, attributing to the entrepreneur the role of driving agent in economic development and growth. Among the contributions from Psychology, a line of research stands out that is based on the social theory of cognition and the behavioral theory of decision-making.

It seeks to explain the influence of the cognitive processes of the entrepreneur.

In referring to entrepreneurial cognition, Mitchell et al. They cite a research into entrepreneurial cognition that demonstrates how the entrepreneur uses simplified mental models to unite pieces and connect information that helps to identify and develop new products or services, as well as to gather the necessary resources to build and grow a business.

These authors state that there is a need for more in-depth studies in this field because corporate thinking and questions of perception developed by cognitive psychology have sought to understand and take part in research into entrepreneurship. In a similar way, Bastos and Borges-Andrade analyze questions related to the cognition and action of social actors and state that organizations deal with environments that are arranged based on interpretations that people produce.

Machado-da-Silva and Fonseca , in turn, point out that this subjective conception of the environment implies the possibility that it may be perceived in different ways. This opens perspectives for consideration and makes the actors dependent on their interpretive diagrams, bringing a collection of ideas, values, and beliefs that may propitiate order and coherence in the structures and systems in an organization. In addition to stressing the cognitive aspects, Psychology also emphasizes the importance and value of affective aspects and emotions in organizational studies.

Fineman asserts that organizational researchers have lingered in incorporating affective and emotional aspects into their considerations. He underlines, however, that there are studies that deal with the feelings that awaken passion, anguish, joy, boredom etc.

Online Entrepreneurial Wage Dynamics In The Knowledge Economy

While Psychology discusses the non-dissociable cognitive and affective aspects, we found no research into entrepreneurship that included both. They are strongly influenced by family, education and religion, as normative standards utilized by a person to judge and select between alternative behavior models. These values are also considered the objectives in a desirable transitory situation, at different levels of importance that serve as a guide in each person's life. Schwartz and Schwartz and Sagiv state that values are also criteria that contribute to the evaluation of a person's actions.

Rokeach confirms through his studies that values have different levels of importance and vary from person to person.

Despite being less numerous than attitudes and beliefs, they are more abstract and constant over time. If, on the one hand, these values contain affective components that stimulate a person's reaction to defend them, on the other hand, when integrated with the cognitive aspects, they are stronger and determine personal attitudes and behaviors.

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Due to this, our framework has incorporated the values in the affective and cognitive aspects in order to understand the entrepreneurial process dynamics. This study aims to contribute to the understanding of the dynamics of the entrepreneurial process through the entrepreneur's values, characteristics and actions over time. The proposal is a response to the inability of existing models to adequately describe the dynamics of the entrepreneurial process.

Based on Moore's model, Bygrave presented a framework that highlights the critical factors that drive venture development at each stage. Inspired by this framework, we have developed a dynamic approach that focuses on the personal attributes.

It is important to make clear that this approach is applicable to all kinds of organizations, even those that are not classified as entrepreneurial ventures , which have three essential characteristics: Reports of entrepreneurs extracted from empirical research Nassif et al. In addition, Carvalho, Machado, Silva, Souza, and Ghobril assert that entrepreneurs give more importance to affective attributes at the beginning of the venture, and progressively emphasize the cognitive aspects. However, it is important to emphasize that the aforementioned works were done in a specific environment: Nevertheless, we believe that cultural, sociopolitical and economic factors should influence the importance of cognitive and affective aspects over time.

Delmar and Shane state that there are two different types of activities in the start-up process, which are: Developing longitudinal research in Sweden, the authors conclude that activities related to planning and creating legitimacy reduces the probability of disbanding and increases the probability of establishing the venture. We believe that cultural features and the availability of financial and other resources anticipate the need for planning.

In view of this variation in the importance of the affective and cognitive aspects for the entrepreneur over time, we have adopted a more dynamic approach to understand the entrepreneurial process. The framework presented in Figure 3 shows that the cognitive and affective aspects cannot be dissociated and that their importance in the entrepreneur's decision-making process varies over time.

This framework illustrates the environment as a strong influence on the entrepreneur's decision-making process. This reinforces the importance of personal attributes in the entrepreneurial process. The framework also covers the relation between environment, values and affective and cognitive aspects. According to Elizur et al. Values, in turn, are important factors in understanding the affective and subjective aspects because of their intrinsic relationship with to them. In short, affective and cognitive aspects change their importance at each stage of the venture development, but we need to emphasize that these environmental factors and entrepreneur values influence the speed of this change.

The framework intends to be comprehensive enough to explain these entrepreneurial process dynamics.

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