If You Have a Hammer, You Only Look for Nails: The Relationship Between the Einstellung Effect and Business Opportunity Identification

Abstract

We use the theory of Einstellung to examine individual differences in business opportunity identification. Einstellung is the tendency to habitually rely upon existing cognitive frameworks even when they become redundant. This study examined the relationship between individuals' proclivity toward Einstellung and the number and innovativeness of business opportunities they identified. Our results suggest that the Einstellung effect was negatively related to the number as well as the innovativeness of opportunities people identified. These findings indicate that habitual reliance upon existing cognitive frameworks can sometimes have negative consequences for the critical entrepreneurial ability of opportunity identification.

Notes

1. In order to validate the robustness of our results, we ran additional analyses without the control variables and the results were robust across alternative models. We also repeated these analyses after excluding data from participants who had prior entrepreneurial experience and the results were consistent.

Additional information

Notes on contributors

Rashmi Sahai

Rashmi Sahai is lecturer in Curtin University Singapore.

Michael Frese

Michael Frese is professor in the Department of Management and Organisation at the National University of Singapore Business School and Leuphana, University of Lueneburg.