The influence of entrepreneurial team’s cognitive adaptability on its risk decision making
| Date | 05 October 2019 |
| Pages | 329-349 |
| Published date | 05 October 2019 |
| DOI | https://doi.org/10.1108/IMDS-03-2019-0178 |
| Author | Guohong Wang,Xiaoli Li,Jianlin Zhou,Shulin Lan |
| Subject Matter | Information & knowledge management |
The influence of entrepreneurial
team’s cognitive adaptability on
its risk decision making
Guohong Wang and Xiaoli Li
Faculty of Management and Economics,
Dalian University of Technology, Dalian, China
Jianlin Zhou
Institute of Finance and Accounting,
China Petroleum Finance Company, Beijing, China, and
Shulin Lan
School of Economics and Management,
University of Chinese Academy of Sciences, Beijing, China
Abstract
Purpose –The purpose of this paper is to focus on the risk decision making of entrepreneurial team,
deconstruct the intermediate process mechanism of cognitive adaptability in promoting risk decision making
and reveal the role of opportunity identification and entrepreneurial efficacy in the decision-making process,
which clarifies how cognitive adaptability affects decision-making speed and effect.
Design/methodology/approach –This study establishes a relationship model among entrepreneurial
team’s cognitive adaptability, opportunity identification, entrepreneurial efficacy and risk decision making,
and selects 316 entrepreneurial teams to empirically study the relationship among core variables using
Bootstrap analysis and Johnson–Neyman technology.
Findings –Cognitive adaptabili ty though has no direct impact on risk decisio n-making speed, whereas it
directly affects risk de cision-making effec t; opportunity identi fication has a full mediati ng effect
between cognitive adapt ability and decision- making speed, and a parti al mediating effect bet ween
cognitive adaptabilit y and decision-making effect ; entrepreneurial efficacy pl ays a moderating role between
opportunity identif ication and decision-making speed, and a s ame role between opportunity identific ation
and decision-making effe ct.
Research limitations/implications –First, in setting the research model, the study does not take other
moderators into consideration, which might be improved. Second, the study ignores the origin and formation
of entrepreneurial team’s cognitive adaptability, the predisposing factors of which might be discussed in the
future research.
Practical implications –The practical implication of this paper is to guide the entrepreneurial teamto turn
their focus on the impact of highly implicit cognitive adaptability on decision making, which might be divided
into two aspects: the first is to enhance the cognitive adaptability of the entrepreneurial team, cultivate team
members’self-examination awareness and self-monitoring habits. The second is to strengthen team’s
psychological capital and value the cultivation of entrepreneurial efficacy.
Originality/value –This paper breaks through the team process and structure perspectives,explores the
driving mechanism of en trepreneurial team ris k decision making from t eam cognition perspec tive, and
deconstructs the logical framework of cognitive adaptability’s influence on risk decis ion making. This
paper applies Johnson–Ne yman technology to qu antify the mediating e ffect entrepreneur ial efficacy
exerts on cognitive ada ptability and decisi on-making speed, as wel l as on cognitive adapta bility and
decision-making effect.
Keywords Opportunity identification, Entrepreneurial efficacy, Cognitive adaptability,
Entrepreneurial team, Risk decision making
Paper type Research paper Industrial Management & Data
Systems
Vol. 120 No. 2, 2020
pp. 329-349
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-03-2019-0178
Received 27 March 2019
Revised 5 June 2019
11 August 2019
Accepted 29 August 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
The work described in this paper was supported by grants from The Natural Science Foundation of
China (Grant Nos 71774025, 71502022, 71473027).
329
Risk decision
making
1. Introduction
In recent years,entrepreneurial activitiescharacterized bythe integration of creative resources
have begun to transform from individual entrepreneurship to team entrepreneurship
(Beckman, 2 006; Mol et al., 2015) and entrepreneurial team has gradually become the
entrepreneurial subject in today’s economic society. Entrepreneurial team conducts business
activities in the context that is full of ambiguity, turbulence and high uncertainty involving
major risk decision making such as market entry strategies and technological innovation
strategies, which includes whether to start a business or what business to start and how to
start a business as well as many other options (Jin et al., 2016). Any decision failure may lead
to entrepreneurial failure, therefore, how to ensure entrepreneurial team’s decision-making
ability and improve decision-making performance have become important subjects in the
current theory and practice of entrepreneurial risk decision making.
In recent years, social cognition theory provides a new theoretical perspective for
entrepreneurial research. The theory emphasizes that individuals are not for passively
accepting external things, but to actively form a cognition structure based on their own
perceptions, which might be later used as a framework to make judgment on the psychology
and behaviors of themselves or others. This will, in turn, influence one’s behavior. Social
cognition is the basis of individual social behavior, and individual perception and
interpretation of the external world will deeply affect one’s social behavior. Based on this,
entrepreneurial scholars generally believe that the unique cognition and thinking process of
entrepreneurs is the essential factor that triggers their entrepreneurial behavior and
promotes the entrepreneurial process. Taking this opportunity, it has become an important
part of social cognition theory. The concept of metacognition has been widely applied in the
field of entrepreneurial research. Metacognition refers to the individual’s cognition on
cognition itself and individuals’self-monitoring, control and regulation from this basis
(Flavell, 1979). Metacognition is the cognitive basis of entrepreneurial graphic, which helps
entrepreneurs to actively update or adjust decision-making behavioral strategies based on
previous knowledge and understanding of themselves, task characteristics and
environment. At present, metacognition shows great research potential in explaining how
entrepreneurial team can achieve the optimal entrepreneurial effect. Therefore, cognitive
adaptability originated from metacognition theory has gradually attracted the attention
from academic community. The concept of cognitive adaptability was defined as the ability
of an individual or team to make feedback through the cognitive process embedded in the
environment and to appropriately and effectively change or adjust the decision-making
approach (Haynie et al., 2012). Entrepreneurial team consists of a number of entrepreneurs
with cognitive differences and is therefore more likely to have cognitive adaptability. As
Bird (1992) put it, the unique perception and interpretation of entrepreneurial team’s
external environment can accelerate the connection of “Thinking-Doing,”which is an
important factor triggering decision making. And the perception and interpretation are
relevant to the ability to process, store and extract information –the cognitive adaptability.
The higher the cognitive adaptability of the entrepreneurial team, the stronger the ability to
understand and grasp the composition, performance, driving force and operational rules of
external things. Therefore, the cognitive ability of entrepreneurial team can be regarded as a
trigger mechanism of risk decision-making behavior. It is reasonable to probe into the cause
of risk decision-making behavior from the perspective of cognitive adaptation.
At present, the research on the cognitive adaptability of entrepreneurial team is still in its
infancy, and most of them are still based on theoretical discussions. Moreover, most scholars
focus on the characteristics of team structure and the driving mechanism of team process
characteristics in entrepreneurial decision making. The research on the entrepreneurial team
with the core of team process characteristics fails to reveal the driving or inducing
mechanism behind the various actions of the entrepreneurial team, while the research
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