Focus on Faculty Research at Leeds: Emotions and Entrepreneurship

As part of the Leeds School of Business Faculty Focus Discussion Series, Associate Professor of Management and Entrepreneurship Maw Der Foo discussed his research on the role of emotions in the workplace.

Ask anyone and you’ll get consensus: emotions can complicate the most basic actions and thoughts. Dr. Maw Der Foo investigates how everyday emotions impact entrepreneurs and their enterprises. This unique angle allows him to analyze entrepreneurship from a critical and fresh perspective and offers broad practical implications.

“A lot of people talk about entrepreneurship from a strategic perspective,” he said. “And in entrepreneurship, emotions are less studied. But they’re important. They affect risk perception and the willingness to take risks. Emotions impact effort and the effectiveness of coping with stress.”

In fact, the impact of an entrepreneur’s emotions can be so influential that Foo titled his talk “The Roller Coaster Ride.” Dr. Foo then discussed four specific papers he’s published before examining their broader implications.

Emotions and Risk Perception

In “Emotions and entrepreneurial opportunity evaluation,” Entrepreneurship Theory & Practice, Foo examined how emotions affect opportunity evaluation. Specifically, he analyzed whether specific emotion characteristics such as fear, anger, or happiness impact an individual’s risk perception.

Previous studies suggested that positive emotions lead to positive valiance—when individuals feel good, they take more action; by contrast, negative emotions lead to negative valiance. When entrepreneurs they feel bad, they withdraw.

However, Dr. Foo’s research concludes that the specific emotional characteristics are more important than general feelings of “good” and “bad.”

“When one is fearful, he perceives more risk,” said Dr. Foo. “But when one feels angry, he feels hostile, and an anger reaction usually provokes an aggressive response. Angry people take action.”

In the paper, Dr. Foo distinguishes between “approach” emotions and “withdrawal” emotions and found that people who have more approach emotions like anger or happiness took more risk.

He conducted the study by asking participants to write down scenarios where they felt specific emotions, such as happiness or anger. He then discussed potential ventures and measured subjects’ reactions.

“Emotions are a lot more malleable than we think they are,” said Dr. Foo. “Creative entrepreneurs can plant positive emotions to influence the thoughts of the venture capitalists to yield a more positive outcome.”

Emotions and entrepreneurial planning

In the next study, Dr. Foo and colleagues focused on how emotional state impacted the effort entrepreneurs put into their ventures. (See Uy, M.A., Foo, M.D., & Aguinis, H. (2010). Using experience sampling methodology to advance entrepreneurship theory and practice, Organizational Research Methods, 13(1), 13-54.) This research earned the team a 2011 thought leadership award from the American Academy of Management.

In order to survey people in the moment, Dr. Foo and his team built a downloadable program for their cell phones that beeped at periodic intervals, signaling it was time to respond to a quick survey. The questions focused on their emotional state at the time of the survey, and the team collected data four times a day for two weeks.

“The advantage was we captured people in their real environment over a good reach of time,” said Dr. Foo. “We found that emotions, whether positive or negative, made you want to do things. Emotions are very activating.”

The team also found that entrepreneurs with positive emotions put effort into both current and long-term planning that would help their venture in the future. For instance, they devoted time to developing new clients or finding a new supplier.

“We expected that positive emotions would let you take a more futuristic approach,” said Dr. Foo. “When you feel good, the quick heuristic of positive emotions is ‘I can relax.’ Negative emotions would lead to more current actions focusing on the present.”

When emotional impact is strongest

Adding to the body of research, Dr. Foo and his colleagues are also studying when in an entrepreneurial venture emotions play the strongest role. In their paper-in-progress, the team found that emotion effects are stronger at earlier, rather than later, periods of the entrepreneurial venture.

“Once the venture is more established, the reliance on emption as motivation is less important,” said Dr. Foo. “At this time, there is more structure and organization. By contrast, an entrepreneur has more freedom and uncertainty, and that will drive the emotional effects.”

Emotions and coping strategies

Finally, Dr. Foo addressed a study focusing on how entrepreneurs deal with stress. Their findings are in a paper that they have revised and resubmitted to the Journal of Business Venturing. Dr. Foo highlighted two types of stress coping strategies, noting that a coping strategy is not always effective (“Coping strategies only mean you try to cope, they don’t touch on the efficacy of the strategy).

These two methods include “active” and “avoidance.” The study found that active strategies were successful for both new and experienced entrepreneurs. By contrast, avoidance strategies only worked for the experienced entrepreneurs.

“If you’re experienced, you know it is OK to step away and take a break from your venture,” said Dr. Foo. “If you are a first time entrepreneur, you may not be aware of your options.”

Big picture

“Our research shows that emotions play a great role in entrepreneurship,” said Dr. Foo. “They influence how much risk you take, the type of coping strategies that are effective, and how you plan your business.”

Ultimately, entrepreneurs with a happier state of mind take higher risks, while more fearful entrepreneurs are more most risk averse. Perhaps more importantly, said Dr. Foo, is that his growing body of research demonstrates that people who understand the impacts of emotions can use that to their advantage. For instance, they can try to manipulate the emotions of potential investors to be more positive, which could contribute to a more amenable outcome for the entrepreneur. Also, entrepreneurs could work on their own emotional state as they better understand the role emotions play.

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