הזתה תינכת ידומיל תרגסמב רקחמ תדובע · mindfulness and the recognition of entrepreneurial opportunities. It further suggests there is a connection between

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עבודת מחקר במסגרת לימודי תכנית התזה

הקשר בין מיינדפולנס לזיהוי הזדמנויות יזמיות, החיפוש אחר

ביצועים יזמיים

המסלול האקדמי המכללה למנהל

בית הספר למנהל עסקים

המחלקה ליזמות וחדשנות

מחבר: טל ברמן

מנחה: פרופסור דפנה קריב

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Abstract

This thesis aims to investigate the role of organizational mindfulness in the domain of

entrepreneurship research, connecting it to entrepreneurial opportunity recognition and

entrepreneurial performance. Organizational mindfulness assists organizations in

improving their ability to detect additional issues, especially weaknesses, and

responding to them early.

This perspective has not yet been explored in the literature and may contribute

to the current research in entrepreneurship as well as to related areas of interdisciplinary

research. The current study suggests that there is a connection between organizational

mindfulness and the recognition of entrepreneurial opportunities. It further suggests

there is a connection between organizational mindfulness and entrepreneurial

performance. These results emerge from the fact that entrepreneurs are committed to

resiliency and that they are constantly preoccupied with the possibility of failure. This

enables them to better recognize entrepreneurial opportunities and to build on previous

research conducted by Weick et al. (1999), who coined the five antecedents of

organizational mindfulness: preoccupation with failure; sensitivity to operations;

under-specification of structure; reluctance to simplify interpretations; and commitment

to resilience. Rerup (2005) suggested a connection between organizational mindfulness

and habitual entrepreneurs. The objective of this study is to build on these theories and

to suggest the connections between the five antecedents and entrepreneurial

opportunities and performance. This study is therefore built on two research questions:

(1) Do mindfully-acting entrepreneurs recognize entrepreneurial opportunities

better than nonmindfully-acting entrepreneurs?

(2) Do mindfully-acting entrepreneurs generally perform better in their

undertakings than do non-mindfully acting entrepreneurs?

Quantitative research has been conducted to test these research questions using

a sample of 112 Israeli entrepreneurs. A combination of valid performance questions

(Kariv, 2008) and a newly-developed questionnaire for mindfulness and opportunities

were used for data gathering. The results were analyzed according to various

quantitative methods, including MANOVA and hierarchical regressions.

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The findings demonstrated that organizational mindfulness positively

influenced both entrepreneurial opportunity recognition and entrepreneurial

performance. The findings also suggest that both the research questions were confirmed

and that they support current academic and non-academic theories in the field of

entrepreneurial opportunity.

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Acknowledgements

I would first like to thank my thesis advisor, Professor Dafna Kariv, Vice

President for Global Initiatives and Development and Chair of the Department of

Entrepreneurship and Innovation at the School of Business Administration, College of

Management Academic Studies. The door to Professor Kariv's office was always open

whenever I ran into a spot of trouble or had a question about my research or writing.

She consistently allowed this thesis to be my own work but steered me in the right the

direction whenever she thought I needed it.

I would like to thank Professor Oren Kaplan, President of COMAS, for his

valuable assistance with the thesis. Professor Kaplan was a reader for this thesis and his

wisdom, knowledge and insights assisted in taking it a few more steps in the right

direction.

I would also like to thank the former head of the research program at COMAS'

school of business administration, Professor Israel Drori, for his support throughout the

long process of both the course studies and the writing of this thesis.

Finally, I would also like to thank the entire academic and administrative staff

at the COMAS School of Business Administration for all their assistance.

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Table of Contents Abstract ............................................................................................................

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Acknowledgements ........................................................................................................ v

1 Introduction .......................................................................................... 1

1.1 Rationale .................................................................................................. 1

1.2 Research Objectives ............................................................................................. 3

1.3 Thesis Structure ....................................................................................... 3

2 Literature Review ................................................................................. 4

2.1 Entrepreneurial Opportunities .................................................................. 4

2.1.1 The Field of Entrepreneurial Opportunities Research..................... 4

2.1.2 Entrepreneurial Opportunities Definition....................................... .. 8

2.2 Opportunity Recognition ....................................................................... 10

2.2.1 The Process of Recognition............................................................ 10

2.2.2 Recognition Process Assisted by Prior Knowledge........................ 11

2.2.3 Opportunity Recognition by means of Cognitive Properties.......... 13

2.3 Mindfulness............................................................................................ 15

2.3.1 The concept of Mindfulness in Management Studies..................... 15

2.3.2 The Five Principles of Organizational Mindfulness....................... 17

2.3.3 The Five Principles in the Context of Entrepreneurship................ 18

2.4 Research Questions ................................................................................ 19

2.4.1 Mindfulness and Opportunity Recognition..................................... 19

2.4.2 Mindfulness and Entrepreneurial Performance.............................. 20

3 Methods .............................................................................................. 21

3.1 Sample.................................................... Error! Bookmark not defined.

3.2 Research Tools and Instruments ............................................................ 23

3.2.1 Research Tools................................................................................ 23

3.2.2 Dependent Variables....................................................................... 23

3.2.2.1 Opportunity Recognition................................................................ 23

3.2.2.2 Business Performance............................................................................... 24

3.2.3 Independent Variables.................................................................... 24

3.2.3.1 Commitment to Resilience.............................................................. 25

3.2.3.2 Reluctance to Simplify Interpretations........................................... 25

3.2.3.3 Sensitivity to Operations................................................................. 25

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3.2.3.4 Underspecification of Structure...................................................... 26

3.2.3.5 Preoccupation with Failure............................................................. 26

3.3 Research Process .................................................................................... 26

3.3.1 Information Gathering................................................................................. 26

3.3.2 Statistical Analysis.......................................................................... 27

3.3.2.1 Mindfulness and Opportunity Recognition..................................... 27

3.3.2.2 Mindfulness and Entrepreneurial Performance.............................. 27

3.4 Ethics.................................................................................................................. 28

4 Results ................................................................................................ 29

4.1 Data Analysis ......................................................................................... 29

4.2 Statistical Results ................................................................................... 30



4.2.2.1 Mindfulness and Subjective Entrepreneurial Performance.............31

4.2.2.2 Mindfulness and Objective Entrepreneurial Performance.............. 33

4.3 Summary of Results ............................................................................... 34

5 Discussion .......................................................................................... 35

5.1 Findings.................................................................................................. 35


5.1.1.1 Commitment to resilience and opportunity recognition................. 35

5.1.1.2 Preoccupation with failure and opportunity recognition ................ 36

5.1.1.3 Underspecification of structure and opportunity recognition......... 36

5.1.1.4 Reluctance to simplify interpretations & opportunity recognition. 36

5.1.1.5 Sensitivity to operations and opportunity recognition.................... 37


5.1.2.1 Mindfulness and subjective entrepreneurial performance.............. 38

5.1.2.2 Mindfulness and objective entrepreneurial performance................ 38

5.2 Limitations ............................................................................................. 39

5.3 Implications of this study ....................................................................... 40

References.................................................................................................................... 43

Appendices.................................................................................................................. . 55

Appendix 1 – Questionnaire ..................................................................................... 55

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1 Introduction

"By mindfully considering data not as stable commodities but as sources of ambiguity,

we become more observant"

Ellen J. Langer (1997: 132)

This thesis investigates the effect of organizational mindfulness on both the

recognition of entrepreneurial opportunities and entrepreneurial performance.

In this chapter, an introduction to the field of research will be provided in order

to present the reasoning behind the choice of the research subject.

1.1 Rationale

Entrepreneurship research has become associated with the understanding of

the nature of entrepreneurial opportunities (Holcombe, 2003; Shane & Venkataraman,

2000; Venkataraman, 1997).

One important, fundamental concept that has been developed is why and how

entrepreneurs recognize such opportunities (Shane, 2000; Gaglio & Katz, 2001). Ever

since Kirzner (1973) coined the term “alertness” in relation to the ability of certain

people to explore and discover hidden entrepreneurial opportunities, vast research has

been conducted on the questions of how, what and when entrepreneurial opportunities

are recognized. This research effort signified a shift from the study of the personality

characteristics of entrepreneurs, which had not led thus far to any significant results

(Gartner, 1988).

However, some of the processes of exploring the questions of why and how

certain people recognize entrepreneurial opportunities indeed relate directly to these

individuals whom we know as entrepreneurs. Some researchers have connected these

abilities to the entrepreneurs’ routines of using prior knowledge to their advantage

(Shane, 2000; Shepherd & DeTienne, 2005; Siegel & Renko, 2012), whereas some have

connected them to entrepreneurs’ special cognitive properties and ways of thinking

(Baron, 2006; Gaglio & Katz, 2001).

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Kirzner (1973) has called the ability to spot hidden entrepreneurial opportunities

“alertness”. Mindfulness, as a Western concept,1 is about reflecting on external events

and processing the related information into associations and categorizations (Langer,

2000). Although these two concepts tend to overlap, they are most definitely not the

same thing (Baron & Ensley, 2006). However, as they certainly overlap, they may be

positively connected. In other words, the concept of mindfulness may be connected to

the entrepreneurial opportunity theory developed by Venkataraman (1997). A possible

connection like this merits further investigation.

A conceptual framework based on this focal point (Rerup, 2005) suggests that

mindfully-acting entrepreneurs tend to practice mindfulness when discovering and

exploiting entrepreneurial opportunities. However, no quantitative empirical research

has been conducted to advance this connection.2 Empirical study following a

conceptual study is a necessity in the research field of entrepreneurship (Krueger,

2003). This research therefore responds to a gap, one that is very important in advancing

the understanding of how entrepreneurs recognize entrepreneurial opportunities.

Furthermore, because entrepreneurship is closely linked to economic growth

(Wennekers & Thurik, 1999), it is essential to focus on the factors that tend to increase

the performance in entrepreneurial undertakings. Many researchers have suggested

various such factors which tend to positively influence the conducting of new ventures.

For instance, factors such as the number of partnering founders (Cooper et al., 1990) or

level of education (Lee & Tsang, 2001) have been found to influence entrepreneurial

performance positively. Moreover, researchers have suggested that mindfulness

contributes positively to the results for various types of businesses (Rerup, 2005; Weick

et al., 1999). It has also been suggested that mindfulness contributes to the development

of dynamic capabilities (Romme et al., 2010).

This thesis suggests new factor which affects the recognition of both

entrepreneurial opportunities and entrepreneurial performance.

1 This thesis will consider mostly the Western concept of mindfulness as developed by Langer (1989). 2 Double-checked with Prof. Rerup in a personal correspondence.

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1.2 Research Objectives

Organizational mindfulness assists organizations by improving their ability to

detect more issues, especially weak points, and to respond to them early. The thesis will

endeavor to decipher the empirical impact of organizational mindfulness over the

process of recognizing entrepreneurial opportunities. It will be tested according to the

five principles of organizational mindfulness: Pre-occupation with failure, reluctance

to simplify interpretations, sensitivity to operations, under specification of structure,

and commitment to resilience (Rerup, 2005; Weick et al., 1999; Weick & Sutcliffe,

2006).

The influence of these five principles will be tested on the antecedents of

entrepreneurial opportunity recognition, i.e., both the use of prior knowledge (Shane,

2000) and entrepreneurs’ possession of cognitive properties (Baron, 2006; Gaglio &

Katz, 2001). Based on leading models and prior research in these fields, this research

expects to find that all the five principles of organizational mindfulness positively

influence prior knowledge, the possession of entrepreneurial cognitive properties and

the performance of entrepreneurial ventures.

As pointed out above, owing to the importance of both the recognition of

entrepreneurial opportunities and entrepreneurial performance, this thesis aims to

suggest the importance of organizational mindfulness in both the early and the later

stages of entrepreneurship.

1.3 Thesis Structure

This thesis starts with a review of the current literature, which will be presented

in chapter 2. An overview of why and how opportunity recognition has become a key

focal point in current entrepreneurship research will be included, along with a survey

of organizational mindfulness research and theory, which will deepen our

understanding of its importance as a sub-field of research in the field of management.

Chapter 3 will introduce the methodology developed and used for this research, and

Chapter 4 will present the results that emerged from our analyses of the data gathered

in the study. Lastly, chapter 5 will discuss these results and present their implications

for research and practice.

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2 Literature Review

This literature review aims to provide a thorough overview of the leading theories

in the fields of opportunity recognition, entrepreneurial performance and organizational

mindfulness

Section 2.1 will discuss the research in the field of entrepreneurial opportunities.

This research has been conducted by several well-known scholars in different contexts

(Kirzner, 1973; Schumpeter, 1934; Venkataraman, 1997). Section 2.2 will discuss the

sub-field of opportunity recognition and its two main antecedents: prior knowledge and

cognitive properties. Section 2.3 will review the concept of mindfulness and its

connection to the field of entrepreneurship. lastly, in section 2.4, the research questions

will be introduced.

2.1 Entrepreneurial Opportunities

2.1.1 The Field of Entrepreneurial Opportunities Research

Until the development of entrepreneurial theory by Venkataraman (1997), the

field of entrepreneurship was divided among neo-classical economics theories (Aghion

& Howitt, 1992; Khilstrom & Laffont, 1979) and psychological traits theories (Begley

& Boyd, 1987; Chen et al., 1998; Hornaday & Aboud, 1971; McCleland, 1961). These

approaches will be discussed in detail.

It was Schumpeter (1934) who suggested that, although markets might be in

equilibrium mode, any person intending to increase his profits must innovate ("Find

new combinations"). There are various ways of doing this, thereby pushing the market

into disequilibrium mode: (1) Produce either something new or a new formation of

an existing product. Steve Jobs, CEO of Apple, used to say: "Innovation distinguishes

between a leader and a follower".3 During Steve Jobs' tenure as its CEO, Apple, thrived

on this strategy of producing something new or a new formation of an existing product.

Year in and year out, it introduced new blockbuster products, such as the iPod, the

iPhone, the iPad, and many other items. The iPhone, for instance, was a combination

3 The Innovation Secrets of Steve Jobs: Insanely Different Principles for Breakthrough Success by

Carmine Gallo, 2001.

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of multiple available technologies, e.g. the touch screen and graphical user interface;

(2) Find new ways of production or distribution, e.g., in past years Amazon has been

involved in a project for improving the delivery of its products to its large customer

base. The project is called "Amazon Prime Air",4 and involves drones which will

ultimately deliver packages straight to the customer’s doorstep in no longer than half

an hour; (3) Introduce an existing product into a brand-new market. For example,

3D printing has been a notable technological trend in recent years. The latest

development is the use of 3D printing in the aircraft industry when it comes to spare

parts, maintenance and repairs. GE Aviation has started using 3D technology this year

in the manufacture of aircraft engine parts the company suggests tends to be lighter and

simpler, as well as having new design options;5 (4) Find new resources or semi-

finished goods for cheap manufacturing purposes. For example, about two decades

ago, most manufacturing firms abandoned their "Produce and Sell" business model

(although it is still in use in certain industries like the automobile industry). Instead,

they adopted wholesale or retail business models. This was made possible with the

combined improvements in the transportation industry and the ability to outsource to

countries with a cheap manufacturing advantage, such as China; (5) Create or destroy

a monopoly; e.g., previously, whenever we corresponded in writing, we had to use the

international mail services. With the creation of flash deliveries by companies such as

FedEx, as well as the advent of email, the communications industry was disrupted.

Today, it appears that the mail services in many countries are struggling for survival

(Sledzik, 2013).6 However, it must be considered that it does not make sense to innovate

at equilibrium. There is no incentive whatsoever to do this, as it "does not permit

appropriation of rents in sustained fashion" (Sarasvathy et al., 2003, p. 84). Hence the

above methods must be used to push the market outside.

In 1973, Kirzner suggested a theory complementary to that of Schumpeter, to

explain his own definition of entrepreneurship. He argued that there are business people

(entrepreneurs) who can discern markets that most people have yet to recognize are in

4 Amazon has already published information about this on its website: "We're excited about Prime Air — a future

delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using small

unmanned aerial vehicles, also called drones." 5 GE has already published this on its website: "In 2016, GE Aviation will introduce the first 3D-printed parts in an

aircraft engine platform. Each of the new CFM LEAP engines, produced jointly by GE and its long-time partner,

Snecma (SAFRAN) of France, will have 19 3D-printed fuel nozzles in the combustion system that could not be

made any other way. The benefits of printing these parts are numerous". 6 "Israel's Postal Service Seeks Government Bailout" – Haaretz 16.03.2013

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a state of disequilibrium. Such business people use their advantage in gaining the

necessary knowledge and information (Hayek, 1945) in order to buy resources or

products at a low price or sell them at a high price, sometimes even succeeding in both.

These entrepreneurs have an Alertness ability, which helps them identify such

situations, thereby grossing high profits. These profits are the reward for these

entrepreneurs' alertness (Holcombe, 2003). Entrepreneurs therefore feel that they have

information costs lower than those of others (Casson & Wadeson, 2007).

However, not all information is factored into markets when the prices are set

(Yao, 1988). This is evident in the various industries in which oil is used (automobile,

aviation, shipping, and others). Even though the price of oil nowadays is at a low point,7

real prices are still high. It sometimes takes weeks, perhaps months, before the prices

are lowered to reflect the real price of a barrel of oil at the gas station. This is because

the refining process is both time-consuming and costly.8 To sum up, Kirzner points out

that it is only after entrepreneurs have been involved in entrepreneurial activities and

have organized these markets that information is factored into the pricing system

(Eckhardt & Shane, 2003).

The theories by Schumpeter and Kirzner, are the backbone of entrepreneurship

research, as Schumpeter introduced "science push" opportunities, while Kirzner

introduced "market pull" opportunities (Shane, 2003). These scholars were the first to

define entrepreneurship as a concrete concept that could be built on. They complement

each other (Blaug, 2000) and provide us with an excellent starting point for all the

research theories in the field. With Kirzner's approach, the entrepreneur is alert to

unknown, yet to be discovered opportunities in the economic domain. On the other

hand, in Schumpeter's approach, opportunities are available outside the economic

domain, which indicates a strong need to think outside the box and to innovate. The

means to distinguish between these two approaches is the economic pricing system and

whether these opportunities are reflected by it or not (Buenstrof, 2007).

Venkataraman built on the complementary theories by Schumpeter and Kirzner,

and created a revolutionary definition of entrepreneurship:

7 "Oil Prices: What’s Behind the Drop? Simple Economics" – NYTimes 27.07.2016 8 "If energy prices are crashing, then how are refiners raking it in?" – Business Insider 23.08.2015

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Our field is fundamentally concerned with understanding how, in the absence of current markets for future

goods and services, these goods and services manage to come into existence. Thus, entrepreneurship as a

scholarly field seeks to understand how opportunities to bring into existence "future goods and service are

discovered, created and exploited, by whom, and with what consequences… As its core the field is concerned

with (1) why, when and how opportunities for the creation of goods and services in the future arise in an

economy; (2) why, when, and how some are able to discover and exploit these opportunities while others do

not; and finally, (3) what are the economic, psychological, and social consequences (Venkataraman, 1997: pp.

120-121)

This theory was revolutionary, as it not only defined the existence of

opportunities and what entrepreneurial opportunities are, but also reflected on

entrepreneurs as individuals (Shane & Venkataraman, 2000).

Opportunity is defined in the research literature as a situation in which goods,

services, raw materials or organizing methods can be purchased at a certain price and

sold at a profit (Casson, 1982; Shane, 2000; Shane & Venkataraman, 2000).

People make decisions based on subjective judgments (Shane, 2000), which are

based on the information that the aforementioned people possess. This information may

or may not be accurate. When the information is inaccurate, it can lead to critical errors,

resulting in either a lack or an excess of resources (Kirzner, 1997). Such mistakes may

eventually lead to vast opportunities, whereby prices are either higher or lower than

their real, overall value (Kirzner, 1973). For instance, we can see how the infamous

collapse of Better Place led Nissan-Renault a few years later to destroy all the Beta-

Testing-Cars that operated in Israel on electric batteries.9 The batteries themselves were

sold to an American company in Missouri, which used them in turning gas-operated

cars (oil or natural) into electric vehicles.10

In summary, it was Venkataraman who suggested observing entrepreneurship

theory firstly by approaching it as an opportunity-based theory, which is the central

topic of this master's thesis.

9 "Better Place was a venture-backed international company that developed and sold battery-charging and battery-

switching services for electric cars. It was formally based in Palo Alto, California, but the bulk of its planning and

operations were steered from Israel, where both its founder, Shai Agassi, and its chief investors resided" (Taken

from Wikipedia - https://en.wikipedia.org/wiki/Better_Place) 10 We can find these batteries for sale on the American company's website: http://store.evtv.me/.

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2.1.2 Entrepreneurial Opportunities: Definition

Entrepreneurial opportunities are defined in the research literature as situations

in which goods, services, resources and manufacturing methods are created by finding

new means, ends, or both. The ends, which are achieved, and the means, which are the

ways of achieving these ends, are realized by players in the market (Eckhardt & Shane,

2003). As such, entrepreneurial opportunities are defined by new means-ends other than

optimizing situations in which we achieve profits via existing means-ends (Kirzner,

1997). They are realized by three available actions: actions that push markets out of

equilibrium, actions that better the production process, and creative actions taken by

entrepreneurs (Eckhardt & Shane, 2003; Holcombe, 2003; Schumpeter, 1934).

Multiple models define the different types of entrepreneurial opportunities.

Drucker (1985) suggests three main types of opportunity: (1) Creating new information

by introducing a new technology or a new way of using it. As pointed out, many

companies are currently trying to find new uses for 3D printing technology in order to

introduce new, long-desired solutions. Various start-up firms are using 3D printing

technologies to provide improved solutions for the medical industry (such as 3D-

printed organs from the patient's own cells11), the security industry (3D-printed guns),

and special education (improving other senses for the blind and the deaf); (2) Taking

advantage of inefficiencies in the market that arise due to the incomplete or uneven

distribution of information. One example is the Israeli start-up company Paybox.12 The

co-founders realized that there was no efficient solution for collecting, as a group,

financial funds, which could be used later, for instance, to organize social events (such

as purchasing food for a party). Thus, they created a digital wallet that allowed groups

to automatically split the bill among them; (3) Spotting fluctuations in the prices of

resources owing to external factors, such as demographic or political changes. A few

decades ago, the Chinese government agreed to open its borders to Western companies.

Ever since then, these companies have sourced large amounts of cheap manufactured

products.

11 All following 3D printing examples have been taken from Forbes article: "What Can 3D Printing Do? Here Are

6 Creative Examples" 08.10.2013. 12 Paybox – "Collecting money from your friends has never been this easy. With PayBox you can collect money

from a group, or send money to a friend instantly" (Taken from Paybox's website).

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Research has realized new ways of categorizing entrepreneurial opportunities

(Companys & McMullen, 2007; Gregoire et al., 2011). One way is the economic

approach, which asks how entrepreneurs recognize opportunities. This approach, as

explained earlier, is based on Kirzner's definition of entrepreneurship. Entrepreneurs

are on the alert for changes and fluctuations in the prices of, inter alia, resources and

commodities. Whenever the pricing system does not reflect the real cost of buying or

selling, some entrepreneur will recognize that situation and will use it to drive the

market back to equilibrium mode. Another approach is the cultural-cognitive, which

asks why entrepreneurs recognize opportunities. They do so by socially interacting with

others. Thus, entrepreneurs tend to recognize shifts in consumer preferences and needs.

The sociopolitical approach asks who these entrepreneurs that recognize opportunities

are. This approach not only deals with the individuals, but also takes into consideration

other external entities involved. In other words, who else is involved in the process of

realizing these entrepreneurial opportunities? Where do the entrepreneurs gather their

data, which is ultimately used to spot these hidden opportunities (Companys &

McMullen, 2007)?

Further, research shows various situations in which entrepreneurs can search

and find new opportunities (Cohen & Winn, 2007): (1) Inefficient firms. The Neo-

Classical approach assumes that firms utilize their resources perfectly, yet recent

research shows that this does not seem to be the case (Hawken et al., 1999). As has

been indicated, markets are in disequilibrium due to the inefficient management and

use of resources. Entrepreneurs find better ways of utilizing resources, thus pushing

markets back to equilibrium (Kirzner, 1973). As previously pointed out, the case study

of Better Place is very similar to that of other firms that have realized over the years

that car engines are unable to manage their oil consumption satisfactorily. There has

therefore recently been a significant move into natural gas-fueled engines or electric

vehicles. (2) Externalities exist. Another Neo-Classical approach suggests that market

prices reflect the entire range of costs and benefits of the product. As previously

suggested, this does not seem to be the case. Entrepreneurs search for opportunities in

which prices actually do not reflect all the benefits and costs, in order to gain access to

extra profits (Eckhardt & Shane, 2003). (3) Flawed price mechanisms. Another Neo-

Classical theory suggests that the prices of all products and services are set when supply

satisfies demand exactly. However, there is strong evidence to the contrary. For

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instance, companies such as Xerox, Gillette, Nespresso, HP and others use a "Razor-

Razor Blades" business model, whereby they sell the core product (e.g., the printer for

HP) at a relatively cheap rate—sometimes even at a loss—for the purpose of winning

extra profits when selling large amounts of the complementary product (ink or laser

toners in the HP example) (Chesbrough & Rosenbloom, 2002). (4) Imperfectly

distributed information. Currently, the distribution of information on the markets is

imperfect (Hayek, 1945), as opposed to the Neo-Classical equilibrium theory of perfect

distribution. Imperfect, uneven information creates entrepreneurial opportunities

(Kirzner, 2000).

On the other hand, entrepreneurial opportunities are not just passively ‘out

there’; entrepreneurs have to be alert enough to recognize them (Holcombe, 2003).

Nevertheless, it will be easier to do so in environments like those described above

(Cohen & Winn, 2007). Opportunities assist people in pursuing their individual goals.

They give people options that allow them to become involved in entrepreneurial

activities (Companys & McMullen, 2007). Opportunities constantly provide a means

of doing something, so they can be perceived as objective, accurate and timeless

(McMullen et al., 2007).

2.2 Opportunity Recognition

2.2.1 The Process of Recognition

A focal point in the research into entrepreneurial opportunities (Holcombe,

2003; Shane & Venkataraman, 2000; Venkataraman, 1997) is how entrepreneurs

recognize them to begin with. How do they realize there is a yet to be a recognized way

to assume extra profits in a specific market? Why are they able to recognize these

situations while others are less able to do so (Shane & Venkatraman, 2000)?

Understanding these questions is a fundamental aspect of the entrepreneurship research

domain (Gaglio & Katz, 2001). Not only is it a very intriguing subject, but it is also

extremely important, because opportunity recognition is one of the characteristics of a

successful entrepreneur (Ardichvili et al., 2003).

Finding answers to these questions is not easy (Siegel & Renko, 2012).

However, as with the equilibrium approach discussed earlier, there is an ongoing

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discussion in the literature regarding this process. Some scholars have argued that

entrepreneurs are constantly searching for opportunities via specific techniques, and

that they are constantly looking for available but unnoticed information (Shaver &

Scott, 1991). Others, especially those from the Austrian school, have argued otherwise.

The Austrian approach suggests that people cannot search for what they are not aware

of. One cannot be aware of whether a specific opportunity is available or even exists

(Kaish & Gilad, 1991).

Nonetheless, there must be a reason why market failures are overlooked. As

mentioned earlier, entrepreneurial opportunities are very well hidden and there is a

special element of surprise in the discovery of such hidden inefficiencies (Kirzner,

1997). Recently, research has shifted its focus from understanding searching techniques

to the recognition of entrepreneurial opportunities. One could argue that some people

recognize or possess certain information based on sheer luck (Nelson & Winter, 1982).

However, there is probably more to it than meets the eye. As pointed out earlier, Kirzner

(1973, 1997) coined the term Alertness, which is the ability to spot hidden

opportunities. But what are the antecedents for alertness? Research has found two main

features that entrepreneurs subconsciously use in order to recognize hidden

entrepreneurial opportunities: The first is using the entrepreneur’s prior knowledge

while linking it to existing knowledge; the second is taking advantage of the cognitive

properties possesses by the entrepreneur.

Although additional factors are involved in the process of opportunity

recognition, such as social networks (Aldrich & Zimmer, 1986; Birley, 1985; Singh et

al., 1999) and potential financial rewards (Schumpeter, 1934), these are mainly external

factors, which are outside the individual entrepreneur's domain. In this research, the

focus will be on the internal factors, i.e., those that are connected only to the individual.

2.2.2 Recognition Process Assisted by Prior Knowledge

For entrepreneurs, prior knowledge is a key element in making decisions faster

than others do, when attempting to exploit the opportunity recognized before the

specific opportunity window closes (Busenitz & Barney, 1997). Building on

Venkataraman's opportunity-based definition of entrepreneurship (1997),

Venkataraman and Shane (2000) attempted to understand why and how some

entrepreneurs recognize these entrepreneurial opportunities while others do not. At the

12

same time, Shane (2000) discussed a specific factor in the opportunity recognition

phenomena.

People possess idiosyncratic knowledge. At times, different people will be

aware of various problems in certain markets, while others will not (Hayek, 1945). For

instance, such awareness can occur while someone is engaged in on-the-job daily

chores and routines (Evans & Leighton, 1989). On-the-job knowledge increases worker

efficiency and focus on core tasks and important decisions (Chase & Simon, 1973;

Choo & Trotman, 1991; Weber, 1980). Prior knowledge is also gained through life

experiences and social interactions (Venkataraman, 1997). Education is another source

of prior knowledge. This has been found to be very helpful when it comes to

recognizing entrepreneurial opportunities (Davidson & Honig, 2003).

Prior knowledge strongly influences entrepreneurial creativity, as it can assist

in solving major, challenging problems (Amabile, 1997). It influences innovativeness,

as it is a source of new ideas (Fiet, 2002), and it increases the number of entrepreneurial

opportunities recognized and the innovativeness in these specific opportunities

(Shepherd & DeTienne, 2005).

According to Shane (2000), there are three types of prior knowledge that are

associated with the recognition of entrepreneurial opportunities: Prior knowledge of

markets, prior knowledge of ways in which to serve markets, and prior knowledge of

customers' problems.

Information about the market may consist of the relationships with the suppliers

and the understanding of specific capital needs (Von Hippel, 1988). Information about

ways in which to serve markets may be related to a new technology that will improve

the production or the distribution processes (Schumpeter, 1934). Information about

customer problems may include the difficulties for end-users with the currently

available technological solutions (Von Hippel, 1994). As these examples suggest,

owing to the uneven distribution of knowledge, not all people will recognize

opportunities that are available through technological change (Shane, 2000).

Research suggests two ways in which market knowledge influences the

recognition of entrepreneurial opportunities: (1) Knowledge of technology in high

technology environments or undertakings, and (2) market knowledge which is

13

recognized by young ventures (Siegel & Renko, 2012). Thus, nascent entrepreneurs

can either create a new undertaking or improve an existing one (Singh, 2000).

2.2.3 Opportunity Recognition by means of Cognitive

Properties

Opportunity recognition can be defined as a cognitive process, wherein

individuals understand that they have identified an opportunity (Baron, 2006). Research

has identified cognitive properties that assist in the recognition process: both creativity

(Vesalainen & Pihkala, 1999) and intelligence (De Wit, 1993) have been found to be

connected to opportunity recognition. Indeed, entrepreneurs think (Kaish & Gilad,

1991) and behave (Busenitz & Barney, 1997) differently. The question is why.

Individuals have unique life experiences which lead them to develop unique

cognitive frameworks (Baron & Ensley, 2006). These are manifested in perceptions and

decision-making (Gaglio & Katz, 2001) and in the way entrepreneurs interpret

information. Is this interpretation different from that of others who are at the same time

involved in the same market (Shaver & Scott, 1991)? The answer to this question takes

us back to Kirzner's previously-discussed concept of alertness. Because entrepreneurs

are alert, it means that they must possess different cognitive properties, which in turn

assist them in the opportunity recognition process (Gaglio & Katz, 2001).

As previously discussed, Kirzner suggested that entrepreneurs can spot

overlooked entrepreneurial opportunities (Kirzner, 1973 & 1979). He also pointed to

their ability to wisely assess reality (Kirzner, 1980), while simultaneously possessing

quite a clear image of the future (Kirzner, 1985). In short, Kirzner differentiated

between entrepreneurs and others, depending on the entrepreneurs' ability to perceive

correctly the current situation in the market and realize its future consequences.

Individuals have different views, beliefs and knowledge. Together, they create

schemas (mental models), which help them interpret certain situations. Non-alert

market actors, therefore, will not react to the ever-changing situations in the markets,

whereas alert entrepreneurs react and act accordingly. Entrepreneurs seek for change,

and they will use methods of counterfactual thinking (What if?) or mental simulation

to correctly assess the evolution of a certain market (Gaglio & Katz, 2001).

Entrepreneurs are engaged in pattern recognition, using their ability to "connect the

14

dots". In other words, they link unrelated events (Baron, 2006). However, alertness

itself is not the only differentiating factor; sometimes the required change is so obvious

that even non-alert actors notice it. Thus, a "sensemaking" (Weick, 1995) effort is also

required in order to reach the right conclusion, which in turn requires assessing the

situation differently. Entrepreneurs habitually tend not to follow the herd, but on

occasion adopt a different point of view. In short, attention is not the only thing

separating entrepreneurs from others; there is also the action they take afterwards

(Gaglio & Katz, 2001).

Non-alert market actors can make the following mistakes: (1) Not

understanding the fact that present assumptions are no longer valid. For example,

Kodak invented the digital camera back in 1975, yet its executives failed to see it as a

disruptive technology, causing the company to lose its position as a market leader in

the photography industry (Grant & Baden-Fuller, 2004); (2) Ignoring new resource

availability: (3) Excessive optimism or pessimism regarding resource availability; (4)

Excessive optimism or pessimism when it comes to the decisions taken (Kirzner, 1985).

The common factor in these mistakes is inaccurate interpretations of new situations and

inaccurate processing of the information at hand (Gaglio & Katz, 2001).

Therefore, it seems as if non-alert individuals work via existing means-ends,

Alert entrepreneurs transcend this pitfall and find new means-ends (Kirzner, 1985).

Means represent the resources needed, while ends represent the value created via these

resources (Gaglio, 2004). In cognitive terms, this is a frame-breaking kind of situation,

i.e., an alert individual uses his abilities to make analogies or practice counterfactual

thinking (Gaglio & Katz, 2001).

For Kirzner (1973, 1997), alertness is a dichotomy: in his view, individuals are

either alert or non-alert. However, that does not sufficiently explain the phenomenon of

recognition of entrepreneurial opportunities (Gaglio & Katz, 2001). As maintained

earlier, the "sensemaking" factor (Weick, 1995) may be considered to be lying within

Kirzner's dichotomy. This means that some people will observe and process the new

situation, while others discount it for some reason. These are individuals who

understand that change is occurring in the market, but nevertheless, like the Kodak

executives, choose to ignore it. Such individuals are referred to as "dismissives" (Gaglio

& Katz, 2001). On the other hand, some people use the new information but insert it

15

into the current known and available framework (Weick, 1995). These individuals are

referred to as "discounters". These specific actors—the franchisee entrepreneurs—will

only pursue opportunities that are expected to incrementally improve the current goods

or services.

2.3 Mindfulness

2.3.1 The concept of Mindfulness in Management Studies

Mindfulness is a relatively well-established concept. It originated in Eastern

philosophy and was then brought into the field of management studies. In Eastern

philosophy, mindfulness refers to using the mind to bear entirely on the current

situation. It means paying attention to the internal processes of the mind rather than to

its contents, while also paying attention to the surroundings, remembering them but not

losing sight of them, even when there is a distraction. However, in its Western

conception, mindfulness means paying attention to external events and to the content

of the mind, such as past associations or concepts (Weick & Putnam, 2006). Attention

here refers to the quality rather than the quantity of the items to which one pays

attention. The quality of attention can be described as focus, stability, and filtering

(Weick & Sutcliffe, 2006).

The Western concept of mindfulness was initially developed by Langer in

1989. She described it as:

a) Active differentiation and refinement of existing distinctions (138); b) Creation of new discrete categories

out of the continuous streams of events that flow through activities (157), and c) A more nuanced appreciation

of context and of alternative ways to deal with it (159).

Langer suggested that mindfulness is a flexible state of mind in which the actor

is engaged in the present while simultaneously noticing new things (Langer, 2000). In

order to fit it into a Western perspective, the focus is actually on shifting the way a

person thinks, from mindlessness to mindfulness, not through meditation, as in the East,

but through noticing new things (Langer, 2005) that are connected to goal-oriented

cognitive tasks, not emotions or thoughts (Baer, 2003).

In this definition, we can see why mindfulness and alertness tend to overlap.

Mindfulness is indeed similar to the concept of being alert, as it implies increased

16

awareness: "To focus on the mind is to examine topics such as alertness, attention,

abstraction, and awareness" (Weick & Sutcliffe, 2006, p. 515). Langer suggested that

mindful actors are engaged in information processing via their ability to create and

refine categories (Fiol & O'Connor, 2003). Like Kirzner, Langer also observed that "A

mindful approach to any activity has three characteristics: the continuous creation of

new categories; openness to new information; and an implicit awareness of more than

one perspective" (Langer, 1997, p. 4). Further evidence for overlapping can be found

in the cognition of the mindful actor, which involves recognition of patterns and linking

one context to another (Narduzzo et al., 2000), just like Baron's concept of

entrepreneurs, who "connect the dots" (2006).

On the other hand, we have the concept of Mindlessness, which consists of

running on "auto pilot", relying on past information processing and categories (Weick

et al., 1999). Although we should always look for ways of reducing mindlessness

(Langer & Moldoveanu, 2000), there is sometimes a definite need to act mindlessly

(Levinthal & Rerup, 2006), as it frees us from wasting energy on tasks that do not

require such an investment of energy (Bargh & Chartrand, 1999). Mindfulness requires

a significant effort from actors and makes them absorb heavy costs, whereas

mindlessness is cost-efficient (Weick & Sutcliffe, 2001). Thus routine-based behavior

is not necessarily a bad thing, as it does help us gain experience and store important

data. Actors therefore choose to match specific behaviors to certain contexts (March,

1994). It is therefore safe to assume that, not only is mindlessness not a negative thing,

but it is also not too far distant from mindfulness itself. One can actually find many

interrelationships between the two (Levinthal & Rerup, 2006).

In summary, mindfulness is very important because it makes one reluctant to

simplify events, and willing to recognize events as unfamiliar. A mindfully-acting

person does not miss nuances and differences (Weick & Sutcliffe, 2006). Mindfulness

is about stressing the importance of responding to ever-changing environments and

situations (Levinthal & Rerup, 2006). Recent research has suggested that mindfulness

positively influences the development of dynamic capabilities, which indicates that it

may also positively influence the performance by firms and businesses (Romme et al.,

2010).

17

2.3.2 The Five Principles of Organizational Mindfulness

Building on Langer's work, Weick et al. (1999) measured the degree of

mindfulness in HROs (High Reliability Organizations) such as nuclear facilities. Such

organizations clearly operate in an ambiguous and uncertain environment and cannot

tolerate mistakes owing to the risk involved. Clearly, the chances of committing fatal

errors increases once the attention is distracted; distracted employees seem to perceive

situations incorrectly (Schulman, 2004).

The research conducted by Weick et al. has suggested five principles for what

has been termed "organizational mindfulness" (Weick & Sutcliffe, 2001):

1. Preoccupation with failure: Looking at failures rather than successes. This refers

to the need to search for failures as early as possible, which involves monitoring

many objects and attention being spread across numerous items, rather than being

focused on a single object (Weick & Sutcliffe, 2006) .

2 .Reluctance to simplify interpretations: Focusing on and retaining complexity in

order to prevent any sort of surprise (Rerup, 2006).

3 .Sensitivity to operations: The need to understand that an organization is modular

and complex, with many inter-related items (Rerup, 2006).

4 .Commitment to resilience: Bouncing back quickly from unexpected events

(Weick & Sutcliffe, 2006).

5. Under-specification of structure:13 Empowering employees to make decisions

and preferring expertise over hierarchy (Gartner, 2011; Rerup, 2006).

These five principles are considered the components of organizational

mindfulness. Because stability in terms of attention (seeing things in their fullness) in

HROs is not as strong as vividness (seeing things clearly), when accidents do occur in

these organizations, it is owing to a low degree of mindfulness (Weick & Sutcliffe,

2006).

13 Changed from the original "Deference to Expertise" at Weick et al., 1999 to “Underspecification of Structure” at

Weick & Sutcliffe, 2006.

18

In short, organizing for mindfulness means that small failures must be noticed

(Preoccupation with failure), their uniqueness must be retained rather than lost in a

familiar category (Reluctance to simplify interpretations), people must be aware of

ongoing operations in order to notice small differences (Sensitivity to operations), they

must be able to find ways of recovering when bad things happen (Commitment to

resilience), and last but not least, they must look for assistance from experts in order to

find ways of recovering (Underspecification of structure) (Weick & Sutcliffe, 2006;

Gartner, 2011).

2.3.3 The Five Principles of Mindfulness in the Context of

Entrepreneurship

Mindfulness is often confused with alertness. Alertness means being receptive

to opportunities, whereas mindfulness is the processing of information in an effortful

way (Baron & Ensley, 2006). However, because mindfulness and alertness tend to

overlap, some researchers have endeavored to test the concept within the

entrepreneurship domain. Rerup (2005) tested Weick's HRO findings with habitual

entrepreneurs. He suggested that all five principles of mindfulness are at work when

habitual entrepreneurs are engaged in discovering or exploiting entrepreneurial

opportunities.

Surveying Rerup’s (2005) assessment of the five principles as they relate to

habitual entrepreneurs, we can observe how being mindful can assist them in challenges

that are related to entrepreneurial opportunities:

(1) Preoccupation with failure: In order to choose only the best opportunities,

entrepreneurs must look at both successes and failures. Near-failures are important for

creating contingency plans and refining business models;

(2) Reluctance to simplify interpretations: Entrepreneurs tend to use past

experience in order to behave and think in a way that sometimes makes them reluctant

to realize that some of their ideas do not work. The reluctance to simplify helps them

evaluate ideas from different perspectives, while encouraging them to look for the

unknown;

19

(3) Sensitivity to operations: Understanding that organizations are complex

entities assists entrepreneurs in seeing the big picture. "It keeps them on their toes", one

might say, with a high level of attention to the many small adjustments needed;

(4) Commitment to resilience: Entrepreneurs operate in an ambiguous

environment, where the unexpected can and will happen. Sometimes they need to know

whether to modify their ideas or just let them go;

(5) Under-specification of structure: This helps entrepreneurs attend to

problems that occur early, with the necessary flexibility (Rerup, 2005).

2.4 Research Questions

2.4.1 Mindfulness and Opportunity Recognition

Mindfulness can be seen as a process of organizing knowledge. It helps

entrepreneurs be aware of what they do or do not know, and of how certain actions can

create a positive or negative effect on their undertakings. Thus, mindfulness helps

entrepreneurs exploit their knowledge more effectively (Rerup, 2005). Moreover,

Mindfulness is about changing the way we think and switching modes between

mindfulness and mindlessness, based on cost (Levinthal & Rerup, 2006; Weick &

Sutcliffe, 2001). All these, as previously suggested, are very difficult tasks which

require strong cognitive efforts. Also, as was also mentioned earlier, mindful actors use

methods (e.g., they create categories and associations (Langer, 1997) similar to those

discussed by Gaglio & Katz ("Schemas") and Baron ("Connecting the dots") of pattern

recognition and creating new categories. In short, mindfulness is a "set of learning

processes that recognizes the power of experience-based learning (rather than its limits)

without losing sight of prior wisdom" (Rerup, 2005, p. 469).

Based on the entire framework discussed so far, i.e., the connections between

alertness (opportunity recognition and its antecedents) and mindfulness, the first

research question in this thesis is:

Do mindfully-acting entrepreneurs tend to recognize entrepreneurial

opportunities better than non-mindfully-acting entrepreneurs do?

20

The hypothesis is that organizational mindfulness positively effects the

recognition of entrepreneurial opportunities.

2.4.2 Mindfulness and Entrepreneurial Performance

Past research suggested various factors as a means for better entrepreneurial

performance. Factors such as: business age (Arend, 2014), the number of co-founding

partners (Cooper & Bruno, 1977; Feeser & Willard, 1990), and the entrepreneur's

education level (Lee & Tsang, 2001; Ayala & Manzano, 2010 & 2014) are only a few

of these and will be used later in this research.

Traditional mindfulness research expects positive outcomes, such as high

performance-low failure in HROs (Weick et al., 1999). However, it does not apply

solely to "exotic or far-out" (Vogus & Sutcliffe, 2012: 722) organizations, but it also

applies to simpler ones, such as business schools (Ray et. al, 2001). As previously

pointed out, mindfulness assists entrepreneurs in the process of entrepreneurial

opportunities discovery (Rerup, 2005), while strongly connecting to the dynamic

capabilities model (Romme et al., 2010). This research assumes that mindfulness

positively influences opportunity recognition. Therefore, as suggested in earlier studies,

opportunity recognition is a trait of successful entrepreneurs (Ardichvili et al., 2003;

Shane, 2000). Lastly, we can tell by now that resilience is a key principle in collective

mindfulness. A large body of research has suggested that the resiliency of the

entrepreneur contributes positively to the performance of his/her venture (Ayala &

Manzano, 2010, 2014; Lee & Tsang, 2001).

We should therefore, expect high performance levels in undertakings that have

been founded and managed by mindfully-acting entrepreneurs, both subjectively

(whether or not they feel that their business is a successful one) and objectively

(whether or not they feel that their customers, backers, and other stakeholders think

their business is successful).

Based on the entire framework discussed so far, the second research question of

this thesis is:

Do mindfully-acting entrepreneurs perform better in their undertakings?

The hypothesis is that organizational mindfulness positively affects entrepreneurial

performance.

21

3 Methods

In this chapter the methods used for this research will be elaborated. In section

3.1 the characteristics of the sample will be discussed. In section 3.2 the instruments

and tools used will be introduced. The research process will be discussed in section 3.3,

and finally the ethics will be presented in section 3.4.

3.1 Participants

The sample consists of 112 Israeli entrepreneurs, 89 men and 74 women. Most

of the entrepreneurs' ventures (76%) were younger than three years. Most of the

entrepreneurs (73%) had a co-founding partner; about half of them had previous

entrepreneurial experience; 66% of them had managerial experience; and 86% had an

academic background (Table 1).

Table 1: General Details of Study Sample

Frequency Percent

Entrepreneur's Details

Gender

Male 89 79.5%

Female 23 20.5%

Age

20-25 11 9.8%

26-30 33 29.5%

31-35 30 26.8%

36-40 21 18.8%

41-45 11 9.8%

46-50 4 3.6%

51-55 1 0.9%

Marital Status

Single 54 48.2%

Married 58 51.8%

Education

High School 6 5.4%

Pro. Non-Academic 10 8.9%

Academic 1st Degree 58 51.8%

Academic 2nd Degree 35 31.3%

Academic Doctorate 3 2.7%

22

Entrepreneurial Experience

Nascent 55 49.1%

Serial 57 50.9%

Managerial Experience

Yes 73 65.2%

No 39 34.8%

Years of Managerial Experience

1-3 26 35.6%

4-7 22 30.1%

8-20 25 34.3%

Entrepreneur's Business Details

Age of Business

1-3 85 75.9%

4-7 21 18.8%

10-17 6 5.4%

Partners

0 19 17%

1 49 43.8%

2 30 26.8%

3 7 6.3%

4 4 3.6%

5 2 1.8%

10 1 0.9%

As seen in Table 1, the sample consists mainly of young entrepreneurs. Most of

these entrepreneurs are educated and have some sort of business experience. This

correlates very closely with the fact that Israeli entrepreneurs gain significant

knowledge and skills during their obligatory service (18-21 years old) in the IDF. They

tend to create ventures at a very young age. In the book Start-up Nation, we can find

examples of this, one of which is the notion that the IDF employs a relatively small

number of officers of senior rank so that soldiers in lower ranks have to take initiative

and make independent decisions.

As per the known statistics within the Israeli Central Bureau of Statistics, we

can calculate approximately that, in 2016, the number of male independent workers was

315,000, while the number of female independent workers was 162,000, which

23

provides a rough ratio of 2:114. In this study sample, the ratio is 4:1. Despite this slight

inconsistency, the data was generated from convenience or non-random samples.

Owing to the difficulty in attracting entrepreneurs for academic research, this sample

was obtained by means of a probability sampling method that utilizes forms of random

selection. This method makes it possible to ascertain the accuracy of the findings and

has a higher likelihood of generalizing to the entire relevant population.

3.2 Research Tools and Instruments

3.2.1 Research Tools

A pre-tested questionnaire was used for this research, consisting mainly of

statements rated on a 4-point Likert scale. The questionnaire was developed specifically

for this study owing to the lack of prior available quantitative questionnaires. The first

section of the questionnaire (Appendix 1, p. 56-57) was aimed at exploring the

organizational mindfulness level of the entrepreneurs, as suggested by Rerup (2005)

and their opportunity recognition levels. Rerup's "Mindfulness and Habitual

Entrepreneurship" theory (2005) is, for the most part, conceptual. Hence, in this study,

a newly developed questionnaire of a quantitative nature was introduced. The second

section of the questionnaire (Appendix 1, p. 58-59) was intended to test the performance

of the entrepreneurs' undertaking. The questions were adapted from Kariv's (2008)

research study, which tested entrepreneurial performance. The third part consisted of

general demographic questions, such as age of the particular business, education levels,

marital status, and entrepreneurial experience.

3.2.2 Dependent Variables

3.2.2.1 Opportunity Recognition

Opportunity recognition was represented by its two previously discussed (sections 2.2.2

and 2.2.3) main antecedents: prior knowledge and cognitive properties.

14 Central Bureau of Statistics latest report: EMPLOYED PERSONS AND EMPLOYEES, BY

OCCUPATION (2011 CLASSIFICATION), POPULATION GROUP AND SEX

24

Prior knowledge was tested in four statements (questions: 12, 13, 15, and 19),

e.g.,

a. "Business threats are important to me. I realize them early and work hard to

remove them";

b. "When a competitor comes up with a new idea I know about it as soon as

possible";

The cognitive properties were tested by six statements (questions: 11, 14, 16,

17, 18, and 20), e.g.,

a. "When I came up with my business idea, all the pieces fell in the right place";

b. " I knew how to develop my business as soon as I realized it";

c. " I come up with ideas on how to develop my business all the time".

3.2.2.2 Business Performance

Business performance was tested through two points of view, which referred to

subjective and objective perspectives. The subjective part was tested according to the

self-perceived performance, whereas the objective part was tested according to the

entrepreneurs’ perceptions of their stakeholders' assessments of the performance of the

entrepreneurs' undertakings. The two scales consisted of ten statements, each one rated

on a 4-point Likert scale. They included self-perception measures (questions 27-46),

such as business development, returning customers, business goals achieved, and the

ability to compete (Kariv, 2008). This questionnaire was used on account of its reliable

measures of testing entrepreneurial performance.

3.2.3 Independent Variables

In order to test the influence of mindfulness, we decided to employ the

organizational mindfulness approach developed by Weick et al. (1999). Organizational

mindfulness consists of antecedents: commitment to resilience, reluctance to simplify

interpretations, sensitivity to operations, under specification of structure and

preoccupation with failure.

25

Owing to the difficulty of reaching a sample of entrepreneurs, who are usually

extremely busy and inaccessible, the questionnaire was designed to be as brief as

possible. Hence, only two statements for each independent variable were used

(questions 1-10 in the questionnaire). The statements were created according to Rerup's

(2005) definition of the aforementioned five principles of organizational mindfulness

in the context of individual entrepreneurship.

3.2.3.1 Commitment to Resilience

This variable was represented by two statements rated on a 4-point scale

according to Rerup’s (2005) specific entrepreneurial definition. The statements were

(3) "Even when all seems lost I still believe I can bounce right back up" and

(10) "There is nothing that will stop me from achieving my goals. "A mean of

the two questions was used as the variable for the MANOVA and regression

calculations to be used later.

3.2.3.2 Reluctance to Simplify Interpretations

This variable was represented by two statements made according to Rerup’s

(2005) specific entrepreneurial definition. The statements were:

(1) "I prefer the simple solution over the complex one even when the latter is

the best choice" and

(7) "It is better to be out there with the whole product than to be out there with

the optimum product."

A mean of the two questions was used as the variable for the MANOVA and

regression calculations.

3.2.3.3 Sensitivity to Operations

This variable was represented by two statements:

(2) "I know my start-up's process on the 'bits and bytes' level”, and

(8) "I know exactly which person to approach in my start-up when a problem

occurs."

26



3.2.3.4 Under-specification of Structure


(4) "If and when needed, I can handle almost any position at the start-up", and

(5) "I deal with all issues which occur, even if they do not correlate with my

exact job description at my start-up". A mean of the two questions was used as the

variable for the MANOVA and regression calculations.

3.2.3.5 Preoccupation with Failure


(6) "When things do not go as planned I investigate and learn for the next time",

and

(9) "I have prepared a contingency plan for any scenario that might occur with

my start-up."



3.3 Research Procedure

3.3.1 Information Gathering

Entrepreneurs were found at co-working spaces in Tel Aviv, such as: Wework,

Mindspace15 and Merkspace16, and at various accelerators, such as: Microsoft Ventures

in Herzeliya and Siftech17 at Jerusalem in Jerusalem. All the entrepreneurs volunteered

to take part in this study. Since I was surveying in the entrepreneurs' offices, their

employees were also present, so the founding entrepreneurs could be distinguished

15 Mindspace is a co-working space located at Rothschild St. in Tel Aviv http://mindspace.me/ 16 Merkspace is a co-working space located at Menachem Begin Blvd. in Tel Aviv

http://www.merkspace.com/ 17 Siftech is the first Jerusalem-based accelerator, initially founded at the Hebrew University

http://siftech.co/

http://mindspace.me/

http://www.merkspace.com/

http://siftech.co/

27

from their regular full-time employees. Regular employees at the various start-ups were

requested not to complete the questionnaire.

3.3.2 Statistical Analysis

3.3.2.1 Mindfulness and Opportunity Recognition

Although the variables are ordinal, a "Likert Scale" was used. This study's

Likert scale is symmetric and equidistant and therefore behaves as an interval-level

measurement (Carifio & Perla, 2007). Moreover, as there were two independent

variables in the first research question and five independent variables, MANOVA was

used as a statistical measure. MANOVA enables verifying whether there is a significant

difference between mindfulness and prior knowledge and mindfulness and cognitive

properties. Correlation between the two dependent variables (prior knowledge and

cognitive properties) was .48 (Table 3), so MANOVA is appropriate.

3.3.2.2 Mindfulness and Entrepreneurial Performance

As previously discussed, two types of performance were tested as dependent

variables: subjective and objective. In order to test the influence of mindfulness on

entrepreneurial performance, hierarchical regression was used twice, once with

subjective performance as the dependent variable and once with objective performance.

Ten questions (27-36 and 37-46 in the questionnaire) were used for each of the

performance types. As explained, hierarchical regression was used; hence the ten

questions were transformed into one factor for each performance type. A reliability test

was conducted in order to verify the ability to transform these ten questions into one

factor. The results of Cronbach's alpha were α>0.905; thus, it was considered valid.

Therefore, one averaging factor for each performance type was created via z-score.

Three levels were used in the regression: (1) Demographic general factors:

Three factors were used, which the theory suggests positively influence entrepreneurial

performance: Business age (Arend, 2014), the number of co-founding partners (Cooper

& Bruno, 1977; Feeser & Willard, 1990), and the entrepreneur's education level (Ayala

& Manzano, 2010, 2014; Lee & Tsang, 2001). (2) Opportunity recognition. As

discussed in the literature review, opportunity recognition is a key performance

indicator for entrepreneurs (Ardichvili et al., 2003; Shane, 2000). (3) Mindfulness. As

discussed in the literature review, mindfulness tends to influence business performance

28

and results positively (Weick, 1999) and contributes to opportunity discovery and

exploitation (Rerup, 2005). Therefore, according to the second research question,

mindfulness is expected to influence entrepreneurial performance positively.

3.4 Ethics

All entrepreneurs who participated in this study did so voluntarily. This writer

verified that they answered the questionnaires themselves and did so in good faith. The

results were entered, and all the related statistical analysis was conducted personally by

the researcher.

29

4 Results

This chapter will discuss the results of the statistical analyses. Section 4.1 will

discuss the descriptive variables and correlations. Section 4.2 will present the results of

the statistical calculations for all the research questions, and, finally, a summary of the

results will be presented in chapter 4.3.

4.1 Data Analysis

Table 2 presents the means, standard deviations, and minimum and maximum

levels for the study variables.

Table 2: Descriptive Statistics

Variables Mean S. D Minimum Maximum

Preoccupation with Failure 2.97 0.64 1.00 4.00

Sensitivity to Operations 3.50 0.59 1.50 4.00

Commitment to Resilience 3.43 0.59 1.50 4.00

Underspecification of Structure 3.06 0.74 1.00 4.00

Reluctance to Simplify Interpretations 2.54 0.77 1.00 4.00

Prior Knowledge 3.11 0.56 1.75 4.00

Cognitive Properties 2.83 0.55 1.33 4.00

Participants showed, on average, relatively high levels of mindfulness, and high

levels of prior knowledge and cognitive properties. Most of the participants were able

to assess their performance, both subjectively and objectively.

Table 3 provides the correlations among all the variables used in this study.

This was expected to provide us with relationships between the variables, as well as

verification for the absence of multicollinearity.

30

Table 3: Correlations of Demographic and Study Variables

Variables 1 2 3 4 5 6 7 8 9 10 11

1. Age of Business

2. Number of Partners 0.02

3. Education Level 0.06 0.08

4. Preoccupation with Failure 0.06 -0.08 0.05

5. Sensitivity to Operations -0.08 -0.01 -0.09 0.12

6. Commitment to Resilience 0.11 0.04 0.89 0.27** 0.14

7. Under-specification of Structure -0.05 0.01 -0.07 0.05 0.24* 0.28**

8. Reluctance to Simplify Interpretations -0.04 0.14 -0.06 0.14 -0.06 -0.07 0.06

9. Prior Knowledge 0.00 0.05 0.11 0.32** 0.20* 0.36** 0.22* -0.11

10. Cognitive Properties 0.10 0.05 -0.05 0.42** 0.19* 0.39** 0.31** -0.04 0.48**

11. Subjective Performance 0.23* 0.07 0.03 0.43** 0.15 0.31** 0.16 0.06 0.38** 0.36**

12. Objective Performance 0.02 0.14 0.07 0.31** 0.06 0.36** 0.01 0.10 0.28** 0.28** 0.65**

* P < .05

** P < .01

Correlations were found between some of the independent variables and the

dependent variables (Table 3). For prior knowledge, a significant and strong positive

relation was found with preoccupation with failure and commitment to resilience. For

cognitive properties a significant, strong, positive relation was found between

preoccupation with failure, commitment to resilience, and under-specification of

structure. Some of the independent variables were found to correlate positively with

each other: Commitment to resilience, preoccupation with failure, under-specification

of structure with sensitivity to operations, and under-specification of structure with

commitment to resilience. As previously stated, there is a strong, positive correlation

between the two dependent variables, cognitive properties and prior knowledge.

Another positive correlation, which does not represent any of the research questions,

was found between the demographic variable age of business and perceived subjective

performance.

4.2 Statistical Results

4.2.1 Mindfulness and Opportunity Recognition.

Because organizational mindfulness is composed of five separate independent

variables (the five principles of organizational mindfulness: commitment to resilience,

sensitivity to operations, under-specification of structure, reluctance to simplify

interpretations, and preoccupation with failure) and opportunity recognition is

31

composed of two separate dependent variables (the two antecedents of opportunity

recognition: prior knowledge and cognitive properties), the first research question was

explored by means of MANOVA. The alternative was to conduct multiple ANOVA

tests or multiple regressions, which, for the purposes of this study seemed less

appropriate.

The MANOVA revealed significant results for the following independent

variables: commitment to resilience and preoccupation with failure. Partially significant

results were found for the independent variable under-specification of structure, i.e.,

only for dependent variable cognitive properties. No significant results were found for

the independent variables’ sensitivity to operations and reluctance to simplify

interpretations.

The between-subjects test for the independent variable: commitment to resilience,

demonstrated significant results for both prior knowledge (F=5.49, α<0.05) and

cognitive properties (F=5.75, α<0.05). For the independent variable preoccupation with

failure, it showed significant results for both prior knowledge (F=7.63, α<0.01) and

cognitive properties (F=17.34, α<0.01). For the independent variable under-

specification of structure, non-significant results were found for prior knowledge,

whereas for cognitive properties significant results were indeed found (F=6.49,

α<0.05). Our analysis found no significant results for the independent variables’

sensitivity to operations and reluctance to simplify interpretations.


4.2.2.1 Mindfulness and Subjective Entrepreneurial

Performance

This study aimed to find additional factors that could explain and improve

entrepreneurial performance. Hence the goal was to test how organizational

mindfulness factors interact with other entrepreneurial performance measures, such as

various demographic variables (age of business, number of partners, and education

levels) and opportunity recognition (Ardichvili et al., 2003; Shane, 2000). Hierarchical

regression was used to achieve this goal (Table 4).

32

Table 4 presents the statistical analysis for mindfulness positively influencing

subjective performance, as postulated for the first part of the second research question.

Table 4: Hierarchical Regression - Subjective Performance

B β S. E t

Age of business 0.06 0.23 0.02 2.34*

Number of partners 0.04 0.07 0.05 0.72

Education level 0.01 0.01 0.09 0.16

Age of business 0.05 0.20 0.02 2.17*



Prior knowledge 0.38 0.29 0.13 2.91**

Cognitive properties 0.28 0.21 0.14 2.06*

Age of business 0.05 0.20 0.02 2.26*



Prior knowledge 0.29 0.22 0.13 2.26*

Cognitive properties 0.06 0.04 0.14 0.41

Sensitivity to operations 0.10 0.09 0.10 0.94

Commitment to resilience 0.14 0.11 0.12 1.18

Deference to expertise 0.04 0.05 0.09 0.50

Preoccupation with failure 0.36 0.30 0.11 2.98**

Reluctance to simplify interpretations 0.05 0.05 0.08 0.55

* P < .05

** P < .01

The model summary for the hierarchical regression of subjective performance

showed nonsignificant results at the first level of demographic variables. Significant

results were found at the second level of opportunity recognition and at the third level

of mindfulness. Although age of business did in fact show significant results, the first

level was found to be non-significant (F=2.03, R2=0.06 and α>0.05) for influencing

subjective performance. Adding the opportunity recognition variables at the second

level did provide significant results (F=5.92, R2=0.24 and α<0.01). Opportunity

recognition variables, prior knowledge and cognitive properties contributed

significantly to this result. Lastly, by adding the mindfulness variables in the third level,

significant results were achieved as well (F=4.68, R2=0.34 and α<0.01), albeit their

influence was less than at the second level (R2 change at level 3 at 0.10 as opposed to

33

0.18 at level 2). The main contributor to this result was the independent variable

preoccupation with failure.

4.2.2.2 Mindfulness and Objective Entrepreneurial

Performance

This study aimed to find another factor for explaining and bettering

entrepreneurial performance; hence the goal was to test organizational mindfulness

factors with other entrepreneurial performance measures, such as demographic

variables (age of business, number of partners, and education levels) and opportunity

recognition (Ardichvili et al., 2003; Shane, 2000). Hierarchical regression was used for

this goal.

Table 5 shows the statistical analysis for the second part of the second

research suggestion: Mindfulness influenced objective performance positively.

Table 5: Hierarchical Regression - Objective Performance

B β S. E t

Age of business 0.03 0.13 0.26 0.12



Age of business 0.00 0.00 0.25 -0.08



Prior knowledge 0.25 0.17 0.16 1.53


Age of business 0.00 -0.03 0.02 -0.28



Prior knowledge 0.18 0.13 0.16 1.12


Sensitivity to operations 0.04 0.04 0.13 0.35

Commitment to resilience 0.35 0.26 0.14 2.48*

Deference to expertise -0.11 -0.10 0.11 -0.97

Preoccupation with failure 0.17 0.16 0.13 1.38

Reluctance to simplify interpretations 0.10 0.11 0.10 1.02

* P < .05

** P < .01

34

The model summary for the hierarchical regression of objective performance

showed significant results at the second level of opportunity recognition and at the third

level of mindfulness. No significant results were found for the first level of

demographic variables (F=0.70, R2=0.02 and α>0.05). Although the second level did

produce significant results (F=2.52, R2=0.13 and α<0.05), interestingly, none of the

variables produced significant results separately. Lastly, adding mindfulness at the third

level produced significant results (F=2.55, R2=0.24 and α<0.01) and a larger effect than

the second level (R2 change at level 2 was 0.10 as opposed to 0.11 at level 3). The main

contributor to this result was the independent variable commitment to resilience.

4.3 Summary of Results

The results of the statistical analysis support the research hypotheses. Indeed, it

was found that certain principles of organizational mindfulness, i.e., commitment to

resilience, preoccupation with failure and under-specification of structure positively

influenced entrepreneurial opportunities recognition. More specifically, preoccupation

with failure positively influenced subjective entrepreneurial performance, whereas

commitment to resilience positively influenced objective entrepreneurial performance.

These results correlate with the results for the first research question, whereby

mindfulness positively influenced opportunity recognition. Because opportunity

recognition was previously found to influence entrepreneurial performance positively

(Ardichvili et al., 2003; Shane, 2000), it was conjectured that the principles of

organizational mindfulness influence entrepreneurial performance positively. Both

commitment to resilience and preoccupation with failure positively influenced both

antecedents of opportunity recognition, i.e., prior knowledge and cognitive properties.

35

5 Discussion

In this chapter a discussion on the findings of this study will be conducted.

Section 5.1 will introduce the writer's interpretations of the research findings. The

limitations for this research will be presented in section 5.2. Lastly, the implications for

this study will be illustrated in section 5.3.

5.1 Findings

5.1.1 Mindfulness and Opportunity Recognition

The results were mixed for the first research question “Do mindfully-acting

entrepreneurs tend to recognize entrepreneurial opportunities better?”. Commitment to

resilience and preoccupation with failure were found to positively influence both prior

knowledge and cognitive properties. Under-specification of structure was found to

positively influence cognitive properties. However, sensitivity to operations and

reluctance to simplify interpretations did not affect prior knowledge or cognitive

properties significantly.

5.1.1.1 Commitment to resilience and opportunity

recognition

Commitment to resilience was found to positively influence both prior

knowledge and cognitive properties, i.e., the antecedents of opportunity recognition.

There may be several reasons for this important finding. As previously indicated,

entrepreneurs experience many unexpected events on a daily basis. To take care of these

unexpected events a quick response is needed, as inaction is not really an option.

Resilience assists the entrepreneurs in modifying their undertakings, so they are able to

take advantage of the new situation (Rerup, 2005). Moreover, as suggested earlier,

creativity is a factor that positively influences opportunity recognition (Vesalainen &

Pihkala, 1999). Commitment to resilience prospers in conditions of creativity as the

unexpected events affect only part of the undertaking, not its entirety (Rerup, 2001).

36

5.1.1.2 Preoccupation with failure and opportunity

recognition

Preoccupation with failure was found to positively affect both prior knowledge

and cognitive properties, i.e., the antecedents for opportunity recognition.

Preoccupation with failure brings thoughtfulness and realism to the entrepreneurs'

decision-making process (Rerup, 2005). These assist them in understanding both the

strengths of their undertakings and the weaknesses (Fiol & O'Connor, 2003). Looking

at both the positives and the negatives assists the entrepreneurs in deciding which are

the best opportunities available (Rerup, 2005). Preoccupation with failure also assists

with adjusting and refining prior business experience (March, 1991), which relates, as

previously suggested, to Shane's (2000) concept of prior knowledge.

5.1.1.3 Under-specification of structure and

opportunity recognition

Under-specification of structure was found to positively influence cognitive

properties. Under-specification of structure empowers all the co-founding partners and

encourages them to make decisions (Birley & Roberts, 2001). Therefore, it also allows

the entrepreneurs to recognize opportunities early in the process while gaining a first-

mover advantage in the process (Rerup, 2005). However, it seems that this mechanism

works only for cognitive properties and not for prior knowledge. This result is very

important, as mindlessness is all about processing past information (Weick, 1999).

Under-specification of structure can make entrepreneurs overreact to insignificant

events while underreacting to significant ones (Rerup, 2005), so their prior knowledge

may become irrelevant.

5.1.1.4 Reluctance to simplify interpretations and

opportunity recognition

No evidence was found to connect reluctance to simplify interpretations and

opportunity recognition. First, it is again important to emphasize the fact that

mindlessness is not necessarily a negative thing. Because mindfulness comes at a very

high cost and it does interrelate with mindlessness, it is sometimes better to run on

"auto-pilot" (Levinthal & Rerup, 2006; Weick & Sutcliffe, 2001). Second, contrary to

37

HROs, which cannot afford to simplify anything at all (Weick et al., 1999),

entrepreneurs tend to work a little differently. Looking at today's popular "Lean Start-

Up"18 movement, founded in 2008 by Eric Ries, it is all about simplicity. It is about

saving time and money, so that the customer will receive a minimum viable product

(MVP) as soon as possible, thus providing much-needed feedback as to whether or not

the undertaking is on the right track. Entrepreneurs in today's world have no time and

money to waste. They want to make sure that the opportunity they have recognized

indeed answers the needs of their clientele. Hence, for this movement, the methodology

is to run on auto-pilot and deliver a simple initial product. Moreover, as previously

suggested, opportunity recognition is not only about being alert to an existing

entrepreneurial opportunity in the ever-changing entrepreneurial environment, but it is

also about the pursuit of that specific opportunity once it has been recognized (Gaglio

& Katz, 2001). As reluctance to simplify interpretations requires a complete uncovering

and double-checking of every aspect, it results in too much discussion as opposed to

too little action (Rerup, 2005).

5.1.1.5 Sensitivity to operations and opportunity

recognition

No evidence was found to connect sensitivity to operations and opportunity

recognition. A young start-up is not yet a modular or complex organization, especially

in its early stages, where, for the most part, it is the co-founding team, who are also the

employees. It is usually a small team of three to five people, who tend not to over-

elaborate on each job description: each person does a little bit of everything until the

company matures and scales-up. Sensitivity to operation requires "constant awareness

of interconnectedness" (Rerup, 2005, p. 461). This, in itself, at the opportunity

recognition stage, is unhelpful. It creates cognitive overload or scattered attention

(Rerup, 2005), which interferes with the operation of cognitive properties as elaborated

earlier, preventing the entrepreneurs from creating schemas (Gaglio & Katz, 2001) or

connecting the dots (Baron, 2006). Therefore, it is essential that at the opportunity

recognition stage the co-founding team focus their attention on the opportunity itself

18 The Lean Startup provides a scientific approach to creating and managing startups and getting a

desired product to customers' hands faster. The Lean Startup method teaches how to run a startup: how

to steer, when to turn, and when to persevere and grow a business with maximum acceleration. It is a

principled approach to new product development. http://theleanstartup.com/principles

38

rather than on the business operations, which, as mentioned, have yet to be concluded

anyway.


The results for the second research question, “Do mindfully-acting

entrepreneurs perform better at their undertakings?”, confirmed the hypothesis that

organizational mindfulness indeed tends to positively influence entrepreneurial

performance. These results suggest that preoccupation with failure tends to positively

influence perceived subjective entrepreneurial performance, whereas commitment to

resilience tends to positively influence perceived objective performance.

5.1.2.1 Mindfulness and subjective entrepreneurial

performance

Because opportunity recognition positively affects entrepreneurial performance

(Ardichvili et al., 2003; Shane, 2000), and because one of the results of this study is

that preoccupation with failure positively affects both prior knowledge and cognitive

properties, this result concurs with the previous findings of this study and indicates that

preoccupation with failure tends to positively influence the perceived subjective

performance of an undertaking.

Preoccupation with failure means concentrating on the failures of the

organization rather than on its successes. When an organization constantly studies its

near failures and does everything in its power to reduce the number of near failures to

a minimum, it will indeed perform better (Weick et al., 1999; Rerup, 2005). Future

research ought to be conducted into why preoccupation with failure positively

influences the perceived subjective performance of an undertaking, whereas no

evidence was found for its effect on perceived objective performance.

5.1.2.2 Mindfulness and objective entrepreneurial

performance

Because opportunity recognition positively influences entrepreneurial

performance (Ardichvili et al., 2003; Shane, 2000), and one of the results of this study

is that commitment to resilience positively affects both prior knowledge and cognitive

properties, this result concurs with the previous findings of this study and indicates that

39

commitment to resilience tends to positively influence the perceived objective

performance of an undertaking.

Earlier studies have suggested that the entrepreneur’s resilience is a key

performance indicator (Ayala & Manzano, 2010, 2014; Lee & Tsang, 2001). The results

of this research concur with these findings. Non-academic research statistics show that

most new undertakings fail to survive for various reasons.19 For example, the product

does not fit the market, or the entrepreneur ignored problems that came up along the

way. In the entrepreneurial realm, success usually follows many failures. Therefore, a

non-resilient entrepreneur will not be able to survive all the ups-and-downs of

entrepreneurship. Also, resilience thrives on creativity (Rerup, 2001), which, on the

other hand, positively influences opportunity recognition (Vesalainen & Pihkala, 1999).

Once again, it is worth mentioning that opportunity recognition tends to positively

influence entrepreneurial performance. This is thus another indicator for resilience,

which by itself is a factor that positively affects entrepreneurial performance. Future

research ought to be conducted into why commitment to resilience positively affects

the perceived objective performance of an undertaking, whereas no evidence was found

that it positively affects the perceived subjective performance.

5.2 Limitations

This research attracted 112 participants, while our expectation was to reach at

least 250. Moreover, there was a lack of probability sampling, as every entrepreneur

who agreed to participate was included in the research without checking his/her

demographics and background. The longitudinal effects of time and resources were the

reason for this limitation.

Further, a questionnaire was the instrument used to collect the data. As

mentioned in the methods chapter, we could not locate a questionnaire dedicated to

testing organizational mindfulness and opportunity recognition, hence, a newly

developed questionnaire was introduced for this specific research. The questionnaire

was validated through content validity, with two renowned professors as judges,20 who

19 90% Of Startups Fail: Here's What You Need to Know About The 10% / Neil Patel for Forbes.com

on 16.01.2015. 20 Flood and Carson (1993) introduce the following idea: “Face validity is where a group of experts or

referees assesses whether the measuring instrument measures the attribute of interest. If there is

40

agreed on its accuracy in testing the questions. But there is always an element of

uncertainty about the questionnaire’s accuracy in testing the research variables exactly

and with the right sensitivity. Moreover, this questionnaire was created especially for

Israeli entrepreneurs, as cultural characteristics play a critical role in such a research

project. Therefore, for the five principles of organizational mindfulness, which served

as the independent variables for the first research question, only two questions were

used for each principle.

Lastly, the second dependent variable for the second research question was

objective entrepreneurial performance. To validate objective performance, it would

have been helpful to obtain information from the stakeholders of the participants'

undertakings. Again, the longitudinal effects of time and resources were the reason for

choosing perceived objective performance instead.

5.3 Implications of this Study

This research found that some of the principles of organizational mindfulness

(particularly commitment to resilience and preoccupation with failure,) tend to

positively influence both entrepreneurial opportunity recognition and entrepreneurial

performance. These findings might be useful to educators of early stage entrepreneurs

and early stage accelerator managers.

Entrepreneurship educators focus on strengthening the cognitive properties of

nascent entrepreneurs, in order to assist them in the opportunity recognition process

(Krueger, 2007; Saks & Gaglio, 2004). The findings of this research stress the

importance of the five principles of organizational mindfulness, especially for nascent

entrepreneurs, because they tend to positively influence opportunity recognition. Also,

as organizational mindfulness emerged as positively influencing entrepreneurial

performance, there are some implications for managers of acceleration programs.

Strengthening the five principles of organizational mindfulness may improve the results

of their graduating start-ups. As mentioned before, the success rate of start-ups is very

low,21 so anything that contributes to improving entrepreneurial performance is crucial

consensus among these judges (which is subjective and not necessarily repeatable), then the measuring

instrument can be said to have face validity “(Flood and Carson 1993 p.46). 21 See reference no. 18

41

for the success of the program managers as individuals and for the success of their

program as a whole.

Moreover, some of the findings of this research provide opportunities for future

research. Because entrepreneurship is a key contributor to economic growth

(Wennekers & Thurik, 1999), this issue is fundamental. For example, it would be

interesting to investigate why commitment to resilience positively affected perceived

objective performance, whereas preoccupation with failure positively affected

perceived subjective performance. Also, a longitudinal research, with stakeholders'

participation as the measure of objective performance, would be beneficial. Future

research will increase our understanding of the factors that positively influence

entrepreneurial performance.

42

43

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Appendices

Appendix 1 – Questionnaire

1 – not at all 2 – somewhat 3 – describes 4 – describes very much 99 – not relevant

Please indicate to what degree each item describes your situation. 1 2 3 4 99

1. I prefer the simple solution over the complex one even when the

latter is the best choice.

2. I know my start-up's process on the 'bits and bytes' level

3. Even when all seems lost I still believe I can bounce right back

up.

4. If and when needed, I can handle almost any position at the

start-up.

5. I deal with all issues, which come across, even if they do not

correlate with my exact job description at my start-up.

6. When things do not go as planned I investigate and learn for the

next time.

7. It is better to be out there with the whole product than to be out

there with the optimum product.

8. I know exactly, which person in my start-up to approach when a

problem occurs.

9. I have prepared a contingency plan for any scenario that might

happen with my start-up.

10. There is nothing that will stop me from achieving my goals.

Concerning your self-owned business: To what extent are you

satisfied at present with:

1 2 3 4 99

11. I come up with ideas on how to develop my business all the

time.

12. When a co-worker tells me something I tend to see the big

picture simultaneously.

13. When a competitor comes up with a new idea I know about it

as soon as possible.

56

14. For me every day brings a new opportunity with it.

15. Business threats are important to me. I realize them early and

work hard to remove them.

16. I am already thinking about my next entrepreneurial venture.

17. I have to reinvent myself or I feel disoriented.

18. When I came up with my business idea, all pieces fell in the

right place

19. Discovering things early is one of my core characteristics.

20. I knew how to develop my business as soon as I realized it.

Characteristics of your business:

21. How old is your business (in years)? _________

22. Are you the sole owner of your business or do you have partner/s?

____ 1 – Sole owner

____ 2 – Partners (specify number): _______

23. How many salaried employees do you have in your business? ______

24. How many salaried employees did you have at the start of your business?

______

25. What was the change (in %) of your business revenues (sales) at the end of the

first year?

____ 0 – No change

____ 1 – Decrease of ____ %

____ 2 – Increase of ____ %

57

26. What is the change (in %) of your business revenues (sales) from its start up

point till today?

____ 0 – No change

____ 1 – Decrease of ____ %

____ 2 – Increase of ____ %

Concerning your self-owned business: To what extent do you think

you have accomplished the following:

1 2 3 4 99

27. Perceived customer satisfaction with your products or

services

28. Your business's reputation as compared to that of your

competitors

29. Success in ongoing development of new projects/products or

services

30. Success in achieving planned goals for your business.

31. Repeated customer visits (loyalty)

32. Increase in visits of customers

33. Success in developing customer diversity

34. Successful development of your business in general

35. Success in generating year-round profits

36. Business competition in front of businesses of your size

Concerning your self-owned business: To what extent do you think

your supporters and customers feel you have accomplished the

following:

1 2 3 4 99

37. Perceived customer satisfaction with your products or

services

38. Your business's reputation as compared to that of your

competitors

58

39. Success in ongoing development of new projects/products or

services

40. Success in achieving planned goals for your business.

41. Repeated customer visits (loyalty)

42. Increase in visits of customers

43. Success in developing customer diversity

44. Successful development of your business in general

45. Success in generating year-round profits

46. Business competition in front of businesses of your size

You as entrepreneur:

47. Gender

____ 1 – Male

____ 2 – Female

48.Your age today

____ 20-25 ____ 26-30 ____ 31-35 ____ 36-40 ____ 41-45

____ 46-50 ____ 51-55 ____ 56-60 ____ 61 +

49. Did you start any business in the past other than the present one?

____ 0 – No

____ 1 – Yes

Please specify or describe the business/product/services:

________________________________________________________________

50. Do you have any past experience in management?

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____ 0 – No

____ 1 – Yes; ______ years

51. Are any members of your family involved in your entrepreneurial business?

____ 0 – No

____ 1 – Yes

52. Your educational attainment today:

____ 1. High school (partial or full)

____ 2. Professional non-academic

____ 3. Academic – first degree (BA/BSc)

____ 4. Academic – second degree (MA/MSc)

____ 5. Academic – doctorate

____ 6. other (please specify): ___________________

53. Personal status:

____ 1 – Unmarried

____ 2 – Married

Documents

הזתה תינכת ידומיל תרגסמב רקחמ תדובע · mindfulness and the recognition of entrepreneurial opportunities. It further suggests there is a connection between