ANALYSIS OF THE MEDIATING ROLE OF COGNITIVE ABILITIES/ COGNITIVE STYLE IN DECISION MAKING OF THE ENTREPRENEURS WHILE APPLYING EFFECTUATION PRINCIPLES

Abstract

One of the main concerns of researchers and educators, particularly in the entrepreneurship domain, has been identifying the mechanism through which cognitive abilities and cognitive style affect the behavior of entrepreneurs. This is because of the crucial role that entrepreneurial decision-making personnels play in inspiring and enabling people to establish for new venture. This research investigates the connection of Cognitive Abilities/ Cognitive Style with Decision Making of the Entrepreneurs while applying Effectuation Principles. The sample was composed of 1,112 entrepreneurs involved in entrepreneurial activities or running businesses from Pakistan, Sindh both urban and rural areas of Sindh Province, operating in different industries or doing home based business in small or medium size enterprises. Cognitive abilities’ mediating impact on effectuation principles and decision making of entrepreneurs is analyzed through simple regression and multiple regression with the help Baron and Kenny four step model. Furthermore, cognitive abilities mediate the relationship between entrepreneurial decision making and effectuation principles. Findings of the current study suggested that cognitive abilities are the strongest predictor of effectuation principles followed by entrepreneurs in their decision making.