Entrepreneurial opportunity identification through bisociative mode of thinking

Abstract

Opportunity identification has increasingly been viewed as a core attribute of entrepreneurship (Shane & Venkataraman, 2000), without which entrepreneurship cannot take place (Singh, 1998). This dissertation addresses the fundamental question of entrepreneurship from a cognitive perspective: why some people are able to identify entrepreneurial opportunities. It suggests that social networks, information diversity, prior knowledge, and entrepreneurial alertness are necessary but not sufficient to explain the process of identifying entrepreneurial opportunities. Whether an opportunity can be identified necessitates cognitive processing in the form of bisociation, which refers to the bisociative mode of thinking through connecting previously unconnected matrices or domains of information (Koestler, 1964). By incorporating the role of bisociation in the process of opportunity identification, the framework of this study differs from previous ones in that (1) it highlights the importance of an individual's bisociative mode of thinking to opportunity identification as a mediator; (2) it looks into the moderating effect of high technology entrepreneurs; (3) it considers a framework broader than firm creation with respect to opportunity identification, by taking into account innovative product, service, or technology opportunities in the existing business; (4) it focuses on the identification of novel opportunities only; and (5) it examines the influence of individuals and opportunities, rather than environmental antecedents and consequences because entrepreneurial opportunity identification is primarily an individual-level phenomenon (Hills, Shrader, & Lumpkin, 1999). Hong Kong's technology-based entrepreneurs formed the sample of this study. Eight case studies were initially conducted to show what and how the constructs used in the entrepreneurial opportunity identification framework were initially developed, upon which a mail survey was then conducted to test the underlying relationships between the constructs. In a sample of 197 technology-based entrepreneurs, the findings of the mail survey showed support for eight of the twenty-eight hypotheses. While there was no relationship between social networks and entrepreneurial opportunity identification, it was found that the bisociative mode of thinking did act as a mediator for information diversity, prior knowledge and entrepreneurial alertness with respect to the number of entrepreneurial opportunities identified. Moreover, the relationship between prior knowledge and the number of entrepreneurial opportunities identified was stronger for high technology entrepreneurs. The empirical confirmation of the mediating effects of the bisociative mode of thinking advances existing theory in understanding the process of opportunity identification. This new approach reemphasizes the profound influence that individuals, particularly their cognitive abilities to process information, exert on opportunity identification.