Cognitive consequences of business shut down. The case of Ugandan repeat entrepreneurs
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Date
2014
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Entrepreneurial Behavior & Research
Abstract
The purpose of this paper is to focus on the cognitive and motivational consequences of
a business failure, and their relation with subsequent start up success. The paper hypothesizes that
if previous business failure was attributed to an internal and stable cause, subsequent business would
be less successful compared to where an entrepreneur attributed business failure to an internal and
unstable cause.
Design/methodology/approach – The authors reviewed the literature on attribution theory in an
achievement context and derived a hypothesis about the relation between causal thinking and
subsequent business success. A survey amongst entrepreneurs in Uganda was carried out to yield
insights on how attributions to past performance influence subsequent business performance.
Findings – Entrepreneurs who attributed previous business failure to an internal, stable cause were
found to be less successful in subsequent business start up. When repeat entrepreneurs attribute
previous shut down to a lack of ability, they are less successful in a subsequent business start up.
However, attributing the failure to a lack of effort, does not affect subsequent business success.
Originality/value – The study reaffirms the importance of attributional thinking in entrepreneurship
and provides empirical evidence on the relationship between the way entrepreneurs think about their
previous performance and subsequent performance. Attributional thinking influences subsequent
business actions and outcomes, which offers important practical applications. For instance training to
change attributions of entrepreneurs may be used to influence their eventual performance.
Description
Keywords
Entrepreneurship, Attribution theory, Business success, Cognitive perspective, Repeat entrepreneurs
Citation
Arthur Sserwanga Gerrit Rooks , (2014),"Cognitive consequences of business shut down. The case of Ugandan repeat entrepreneurs", International Journal of Entrepreneurial Behavior & Research, Vol. 20 Iss 3 pp. 263 - 277. http://dx.doi.org/10.1108/IJEBR-10-2012-0120