Measuring and testing general fundamental attribution error in entrepreneurship effecting public policy
| Date | 17 August 2015 |
| Published date | 17 August 2015 |
| Pages | 171-186 |
| DOI | https://doi.org/10.1108/JEPP-03-2014-0013 |
| Author | Robert A. Fiore,Robert N. Lussier |
| Subject Matter | Strategy,Entrepreneurship,Business climate/policy |
Measuring and testing general
fundamental attribution error
in entrepreneurship effecting
public policy
Robert A. Fiore and Robert N. Lussier
Department of Business Management, Springfield College,
Springfield, Massachusetts, USA
Abstract
Purpose –The purpose of this paper is to empirically test for fundamental attribution error (FAE) –the
naturally occurring bias of humans to over-attribute business success to celebrity-entrepreneur disposition.
Design/methodology/approach –Employing a five-step process, this paper measures and tests
for FAE bias in entrepreneurial situations. The methodology includes anecdotal historical evidence;
developing a FAE survey instrument; having 101 respondents classify variables; statistically testing
and validating the instrument; and then statistically identifying the importance of each factor with
a sample 105.
Findings –Significantstatistical evidence for an activeFAE bias was found. Peopledo tend to attribute
business success to entrepreneurial dispositions, rather than team behavior and circumstantial outcome
factors which can reduce the effectiveness of public policy.
Research limitations/implications –There is minimal research on FAE in entrepreneurship
effectingpublic policy, thus there is a need forresearch to better understand factorsof business outcomes
actually based on entrepreneurial dispositions vs team behavior and circumstantial-situational factors.
Practical implications –FAE bias may lead the general public, entrepreneurs, and public policy
makers to overemphasize the impact of the entrepreneur’s behavior and especially the dispositional
factors of the celebrity-based entrepreneur when assessing causation of firm performance. This would
under-emphasize the value of other organizational factors. Misidentification of true cause-effect factors
may lead to inappropriate managerial conclusions and introduction of error in public policy decisions.
Originality/value –Although FAE is primarily a psychological literature concept, this is the first
study to contribute empirical evidence of the FAE of professionals employed in business as it applies to
entrepreneurship and economic outcomes.
Keywords Entrepreneurs, Public policy, Organizational development, Attribution,
Attrabution theory, Fundamental attribution error, Entrepreneurial behaviour,
Business success factors
Paper type Research paper
Introduction
Entrepreneurial behavior plays a crucial role in most countries as entrepreneurial
success is vital to economic growth and well-being (Soininen et al., 2013). Prior
literature has clearly supported the need for sound government policies or institutions
to promote and support entrepreneurship (Dutta et al., 2013). However, reasons why
some businesses succeed and others fail remains an unanswered research question
(Lussier and Halabi, 2010). Important research questions include which entrepreneurial
learning and knowledge (Tseng, 2013), competencies (Ahmad et al., 2010; Mitchelmore
and Rowley, 2010), and skills (Chell, 2013) tend to lead to business success; and
what influences growth intentions and behaviors (Doern, 2011). Decisions to become
an entrepreneur and the reasons for success are phenomena most often studied in
Journal of Entrepreneurship and
Public Policy
Vol. 4 No. 2, 2015
pp. 171-186
©Emerald Group Publis hing Limited
2045-2101
DOI 10.1108/JEPP-03-2014-0013
Received 25 March 2014
Revised 30 June 2014
10 August 2014
Accepted 10 August 2014
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2045-2101.htm
171
FAE in
entrepreneurship
hindsight (Middleton, 2013), which may not be effective because of potential
fundamental attribution error (FAE). FAE, as applied to entrepreneurship, implies
people have a psychological tendency to over-attribute business success to the
celebrity-entrepreneur (or superstars; Krichevskiy, 2014) and the corresponding
propensity to under-regard the impact of circumstantial factors, such as the business
environment (Kahneman, 2011; Kunda, 1999), which could lead to poor investments
and errors in the application of associated public policies.
Although the concept of FAE is common in the psychology and marketing literature,
a review of the business literature failed to find any similar studies. Thus, this is the first
study to examine the general public’s FAE as it relates to entrepreneurship. This study
addresses many important questions with entrepreneurial implications. If the general
public exhibits FAE and the typical CEO-leadership entrepreneurs attribute the success of
the organization to factors under their control, and the entrepreneur supports that belief,
there may be a self-supporting, symbiotic, spontaneous-generating cycle of biased belief
system in play. Do leaders convince followers that their impact is more important than
it is in reality and then do followers feed these beliefs? Is there a circular cycle of
belief reinforcement? Are successes normally attributed to CEO-entrepreneurs really
organizational successes? What is the true role of a random-walk mechanism in market
dominance? To what extent do FAEs over-weight the construct of entrepreneurial
behavior and obscure other, organizational based, causes of economic success? When does
the entrepreneurial role end? What is the impact of FAE on the quest for optimal
managerial and public policy investment decisions? Campbell (2012) summarized by
asking, “How does FAE affect the relationship among institutions, entrepreneurship,
and economic outcomes”?
Theoretical background
The phenomenon of FAE and attribution theory
FAE or attribution bias, describes the tendency to over-value dispositional or
personality-based explanations for the observed behaviors of others while under-valuing
situational circumstantial explanations for those behaviors. The FAE is most visible when
people explain the behavior of others. This discrepancy is called the actor-observer bias.
Kunda (1999) describes the human tendency to over-identify the impact of a leader’s
actions within a group’s success: “[…] studies have also demonstrated that we are often
too quick to jump to conclusions about others’abilities, traits and attitudes; we fail to
appreciate the extent to which situational forces had contributed to that behaviour”
(p. 430). “When we observe or hear about another person’s behavior, we often fail to
appreciate the extent to which this behaviormayhavebeenshapedbycircumstances.
Instead, we assume that the behavior was driven by the person’s enduring underlying
disposition”(p. 441).
FAE comes under the broader scope of attribution theory. Attribution theory explains
how people perceive and make judgments about stimuli, and the attributions are
frequently biased. FAE is to attribute another’s behavior t o dispositional qualities, rather
than to situational factors. FAE also deals with how individuals infer causality between
events and has been used to explain various social psychological phenomena such as
achievement, sex stereotyping, and the impact of reward on behavior (Rogoff et al., 2004).
As related to entrepreneurship, FAE occurs when biased, cognitive tendencies lead
people to attribute business success as due to the entrepreneur’s behavior rather than
environmental circumstances. This FAE tends to be stronger when it comes to celebrity
entrepreneurs (Fiore, 2012).
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