The role of founder identity in the evaluation of entrepreneurial opportunities

• Main Author: Madjdi, Farsan
• Other Authors: Zolfaghari, Badri
• Format: Others
• Language: English
• Published: Faculty of Commerce 2021
• Subjects: Business
• Online Access: http://hdl.handle.net/11427/35326

Entrepreneurship is a fundamental part of the economic development and value creation of societies. Value can be defined in different ways, but at its core it is the production of new goods and services. How these outcomes are produced, how they are shared and distributed across the economy and what is done with the earnings that are created from their production (reinvestment) are key questions in defining economic value. Ventures that are created by founders driven by economic self-interest, community development or to societal advancement bear importance in this relation. This study explored the role of founder identity in the evaluation of entrepreneurial opportunities. It was argued that a social identity lens can be central in improving our understanding of founders' heterogeneous behaviours and actions in new firm creation and development. Using the lens of identity and social identity theory as mentioned above can help gaining new important insights for a better understanding of how founders behave and act in new firm creation which influences how new ventures emerge and develop. In doing so, special attention is given to the way in which the level of inclusiveness, as part of their self-concept as founders', influences their forming of first-person opportunity beliefs to guide opportunity selection and the type of venture they intend to form. An explanatory sequential mixed methods design was used to answer the research question of how founder identity influences the evaluation of entrepreneurial opportunities. An online survey using an empirically validated 15-item scale conducted with first-time founders and students generated 173 responses. This was followed by a qualitative phase, conducted with a subset of the survey respondents, comprising 34 face-to-face interviews using verbal protocols. The findings of this study revealed that differences in the structure of founder's identities drive variations in how they evaluate entrepreneurial opportunities and form first-person opportunity beliefs. The study showed that the ‘individuation' of the opportunity evaluation process varies between distinct founder identity types and offers novel insights into the forming of first-person opportunity beliefs derived from the use of individual-level cognitive resources during opportunity evaluation. It provides evidence that social identities of founders relate to distinct entrepreneurial behaviours and actions during the entrepreneurial process, and in specific, to distinct behaviours and actions during opportunity evaluation as part of the entrepreneurial process.