Cracks in the wall
Research Paper Title:
“Cracks in the wall: Entrepreneurial action theory and the weakening presumption of intended rationality”
Authors:
Richard Hunt (Virginia Tech)
Daniel Lerner (IE Business School)
Sheri Johnson (University of California Berkeley)
Sangeeta Badal (Censio Analytics)
Michael Freeman (University of California San Francisco)
Background:
In entrepreneurship, rationality is a bit like oxygen. Too little oxygen leads to suffocation, but too much oxygen leads to toxicity and death. Analogously, too little rationality may be harmful to entrepreneurial actions and outcomes, but it is also the case that an excessive preoccupation with rationality by scholars and practitioners leads to incomplete descriptions and inaccurate predictions of entrepreneurship. As such, the boundaries of rationality’s utility or disutility in entrepreneurship are unclear. For entrepreneurship scholars, this is problematic because extant entrepreneurial action theory (EAT) is anchored upon the assumption that entrepreneurship arises through rational intentionality. However, recent empirical work has illuminated the presence of unreasoned, non-deliberative, and even impulsive drivers of entrepreneurial action. The author’s explicate this schism, develop framing questions for an investigation of rational intentionality, and present quantitative and qualitative data. The results of our abductive, exploratory inquiry suggest the need to revisit and revise EAT to better accommodate neurodiversity and the complete range of entrepreneurial action.
Methodology:
Sample: In Study 1, participants were randomly selected from a probability-based, longitudinal Gallup panel of 60,000 U.S. adults, using random-digit-dial (RDD) and address-based sampling methods. For this study, 7732 invitations to participate in an online survey were sent to randomly selected panel members. An initial prompt was used to identify entrepreneurs, defined by self-endorsement of currently owning a business. 1049 individuals completed the survey. A further 5447 individuals who had described themselves as employed by others were sent an invitation to take part in an online survey. 1060 non-entrepreneur, business managers completed the survey. In Study 2, high-growth entrepreneurs were recruited through the Inc. 500 list of fastest growing private companies in America. To obtain this data, the publishers sent an email to firm founders, based on the 2017 rankings, requesting their participation. Study 3 consisted of qualitative data drawn from detailed, anonymized clinical case histories compiled by trained clinicians who co-authored the study.
Sample Size: Study 1: 2,109 completed surveys (16%) from the representative sample. Study 2: 38 completed surveys by highly successful entrepreneurs (7.6%). Study 3: longitudinal qualitative clinical data from scores of patients.
Analytical Approach: By design, our matched-set study employed a wide range of financial and non-financial outcomes in order to assess the extent to which ADHD and HPS are or are not drivers of business venturing outcomes. The authors used the well-validated instruments as symptom screeners for the correlates of clinical diagnosis and for traits related to those diagnoses: Adult ADHD self-report scale (ASRS), Hypomanic Personality Scale (HPS), Psychiatric Diagnostic Screening Questionnaire (PDSQ), Mood and Anxiety Symptom Questionnaire (MASQ).
Hypothesis:
Framing Question 1: Is there a material presence of neurodiverse behavioral pathways in entrepreneurship? In particular, are individuals with psychiatric neurodiversity materially observable as entrepreneurs? [Affirmative. There is a significant presence of individuals embodying and expressing neuro-diverse entrepreneurial pathways.]
Framing Question 2: Are non-rational proclivities antithetical to successful venturing outcomes? [Negative. Alternative venturing pathways predicated upon non-rational drivers towards entrepreneurial action can lead to successful outcomes.]
Framing Question 3: Are individuals higher in non-rational proclivities less, more, or equally apt to achieve exceptional entrepreneurial performance? [Generally equal. While non-rational proclivities may lead to very different decisions and actions, on the whole, the population of extraordinarily successful entrepreneurs is comprised of many individuals who exhibit non-rational drivers of entrepreneurial action.]
Results:
1. Psychiatric neurodiversity produces a rich array of entrepreneurial outcomes in response to a rich array of neural frames.
2. As with all entrepreneurs, neurodiverse individuals fail more frequently than they succeed, but no more frequently than those without a clinical condition.
3. The business venturing pathways of those with psychiatric symptoms lead to successful entrepreneurial outcomes with a frequency that is at or above the general population of entrepreneurs.
4. Relative deficits in executive regulatory function and rational goal-directed behavior are, on-average, not an impediment to successful venturing outcomes.
5. Being higher in psychiatric symptoms and tendencies does not undermine a wide variety of positive entrepreneurial outcomes.
6. Neither hypomanic tendencies nor hyperactivity-impulsivity symptoms predict a higher proportion of business failures out of all those started.
7. Neither rational nor a-rational approaches and proclivities are strictly prescriptive.
8. HPS and ADHD are sometimes associated with better entrepreneurial comes, which suggests that entrepreneurs with proclivities towards alternative business venturing pathways often survive and prosper in respectable numbers.
9. Highly successful entrepreneurs are neurodiverse, which means that the emphasis upon reasoned intentionality in extant theories of entrepreneurial action is not a precondition for superlative outcomes.
Conclusion:
Neither the primacy nor the subordination of rationality is useful to either the practice or study entrepreneurship. Rather, entrepreneurial action is birthed by a wide assortment of circumstances and motivations; and, though notoriously elusive to discern and describe, the entrepreneurial actions of unreasonable men and women must also be captured, understood and assessed. An efficient, vibrant marketplace for entrepreneurial innovation, necessarily includes impulse-driven, non-deliberative actions, some proportion of which may evolve into entrepreneurial outcomes, formal organizations and competitive business models. The researchers’ abductive, exploratory inquiry offers evidence of the alternative pathways taken by people, who by force of neurodiversity see the world and behave in the world in ways that are not adequately captured through the lens of extant entrepreneurial action theory. This, then, is the boundary between productive and counter-productive conceptions of rational intentionality in the study of entrepreneurship.