The influence of cognitive styles on entrepreneurs' risk perception of strategic growth in South Africa

Abstract

Since 1994, South Africa’s democracy has striven to reverse the adverse effects of apartheid on the achievement of socio-economic equity. The promotion of entrepreneurship has been highlighted as one avenue of generating the economic growth and job creation vital to promoting this equity. In this context, South Africa needs entrepreneurs who can perceive inherent risks and opportunities in order to grow successful and sustainable enterprises. The study sought to ascertain the influence of cognitive styles on entrepreneurs’risk perception of strategic growth. Entrepreneurs in the manufacturing industry were surveyed randomly and their cognitive styles and risk perception measured. Demographic information about these entrepreneurs was also collected and analysed with the use of various statistical tests such as hypothesis testing, the Chi-square test of association and Fisher’s exact test. The study found that cognitive styles influence strategic growth because analytic entrepreneurs proved to have higher annual revenues than intuitive entrepreneurs. On the other hand, intuitive entrepreneurs proved more likely to own a business than analytic ones. The study highlighted the need to incorporate cognition into the study of entrepreneurship. The different cognitive styles each serve their role in the various stages of growing a successful and sustainable business. Intuition, which incorporates an impulsive, ideas-driven approach, leads to the birth of new businesses; analysis, which incorporates a rational, objective and detail-oriented approach, is necessary for the growth of sustainable businesses. Entrepreneurs should learn to incorporate the appropriate decision-making style according to the demands of their situation. Such behaviour will aid their success.