Exploring the role of observation in the entrepreneurial process

Zozimo, Ricardo and Jack, Sarah and Hamilton, Ellie (2014) Exploring the role of observation in the entrepreneurial process. In: Babson Entrepreneurship Research Conference, 2012-06-01.

Abstract

Principal topic This paper extends the dynamic learning perspective of entrepreneurship (Cope, 2005) through exploring the role of observation across the entrepreneurial life course. While early works have largely theorised drawing upon experiential frameworks which emphasise cognition over social dimensions (Wang and Chugh, 2013), the dynamic learning perspective has been slowly enriching its theoretical base with the addition of socio-cognitive frameworks (Cope and Down, 2010; Kempster and Cope, 2010). For example, Cope and Down (2010) build upon the social practice perspective (Brown and Duguid, 2001) to theoretically integrate cognitive and social understandings of entrepreneurial learning. Inspired and motivated by these introductory developments, this paper explains in more detail the influence of social and cognitive dimensions on the entrepreneurial process. In particular, we build upon the established socio-cognitive framework of Bandura (1977) in order to gain insights into the processes of observational entrepreneurial learning and how these relate to entrepreneurship. While Bandura’s (1977) work has been linked with particular outcomes of observation such as entrepreneurial intentions (Ofstein and Renko, 2011; Scherer et al., 1989; Mungai and Velamuri, 2011) or self efficacy (Wilson et al., 2007), we argue that Bandura’s (1977) framework is equally appropriate to generate understanding of the processes associated with those outcomes. Method Thus, guided by the following research question what is the role of observational learning in the entrepreneurial process?, we draw upon qualitative life course research methodologies to collect and analyse data regarding learning processes (Giele and Elder, 1998). 16 entrepreneurs from various backgrounds and industries participated in this research. Data from each participant was collected during two key points (Clausen, 1998; Martyn, 2009). In an initial moment, participants were asked to draw a timeline in order to illustrate, in a chronological way, the “most significant people” on their entrepreneurial journey (Kempster, 2009; Rae and Carswell, 2001). Between four and five months later, participants were invited to participate in a face-to-face calendar interview (Belli and Callegaro, 2009) to share details about each person included in their illustrations. In total, data for 203 observations of “most significant people” were reported by participants and subsequently coded, analysed and interpreted regarding both prior and post start up stages. After the full verbatim transcription of the interviews, the analysis of data included three different protocols. The first was the open coding of data through reading and re-reading the transcripts. Subsequently, data was then analysed using life course research procedures. Each participant was treated as a case where all his or hers observations were represented in life charts. Life charts are the authors’ interpretations based on people, events and overall stories described by participants and represent a standard way to organize data. The final iteration with data consisted on comparing the cases to understand and identify patterns (Benjamin et al., 2008; Silverman, 2000). Results and implications Data patterns reveal that observational entrepreneurial learning occurs within particular learning domains. Learning domains are defined as observational learning contexts in which qualitatively similar observational learning activities occur (in terms of people observed and observational processes) that differed from activities that came before or after. Observations occur within three learning domains prior to start up (Home, School and Workplace) and four post start up (Home, Business, Peers and Public Figures). At each of these domains, observational processes are influenced by three reciprocal dimensions – person, model and environment. In the context of this investigation, person refers to the individual whom is observing behaviours from a model; model refers to the individual portraying behaviours which are being observed; and environment to the reactions of other people present during the observation of the model’s behaviours. Drawing on Bandura’s (1977) framework of observational learning, this paper extends and redefines the core principles of the dynamic learning perspective – key temporal phases, interrelated learning processes and affective and social characteristics of entrepreneurial learning. In connection to key temporal phases, this research demonstrates that different learning domains are accessed by the entrepreneur prior and post entrepreneurial decision. These domains influence the individual’s preparedness levels as well as the decisions towards exploiting the entrepreneurial opportunity. In relation to learning processes, this research explicates the multiple sources, motivations and mechanisms occurring at each learning domain. Finally, this research shows the extent to which social learning sources influence learning. This paper demonstrates that the three dimensions – person, model and environment – influence entrepreneurial observation, although with varying emphasis at each learning domain. Indeed, the emphasis is on model and environment prior to start up and on the person post entrepreneurial decision. The implications of this work reinforce the need for further development of entrepreneurial learning theorising from a socio-cognitive perspective (Cope and Down, 2010; Ofstein and Renko, 2011). Indeed, the critical insights acquired through this study emphasise the benefits and scholarly opportunities deriving from an understanding of learning in entrepreneurship which encapsulates the influence of the context without overlooking the advances of cognition in entrepreneurship.