The rhythm of effective entrepreneurs’ decision-making process. The pathways of alertness scanning and search and cognitive style. A mediation model

The study addresses how entrepreneurial alertness—particularly the scanning and searching for information—relates to the pathways of entrepreneurs’ thought and ultimately to decision-making effectiveness. Building on entrepreneurial cognition, it highlights the centrality of knowledge structures and decision processes in opportunity recognition and exploitation. The authors note a research gap: while alertness is linked to entrepreneurial outcomes (e.g., intentions, innovativeness), little is known about its effect on decision-making pathways and effectiveness. They propose that scanning and searching improves decision-making effectiveness and examine whether cognitive style (rational vs. intuitive) explains this link, formulating hypotheses that scanning/search positively affects effectiveness (H1), positively relates to rational (H2a) and intuitive (H2b) styles, that both styles positively affect effectiveness (H3a, H3b), and that each style mediates the alertness–effectiveness relationship (H4a, H4b).

Entrepreneurial cognition emphasizes knowledge structures and decision making as key to how entrepreneurs recognize and exploit opportunities. Entrepreneurial alertness, following Kirzner, comprises scanning/searching, association/connection, and evaluation/judgment. Scanning/searching operates throughout opportunity processes and helps build cognitive frameworks that shape decisions. Cognitive style research, grounded in dual-process theory (System 1 intuition vs. System 2 reasoning), posits that individuals habitually process information via intuitive or rational styles. Prior work suggests entrepreneurs employ both, with rationality mitigating biases and intuition speeding judgments. Schema theory indicates that scanning/search guides acquisition and processing of information, which is then filtered through cognitive style. The authors therefore position cognitive styles as potential mediators linking alertness (scanning/search) to decision-making effectiveness and develop hypotheses H1–H4b accordingly.

Design: Cross-sectional survey of entrepreneurs in small and medium manufacturing firms in Tuscany (Italy). Sampling frame: 3,734 SMEs from the Florence Chamber of Commerce (2,320 fashion; 1,414 mechanical). Systematic sampling ensured proportional representation by industry, province, and firm size per EU SME criteria (10–250 employees; turnover <€50M). Contacted 1,261 firms via email (web-based questionnaire; March 2017 with three weekly reminders). Final responses: 98 entrepreneurs (77.6% male; 60.2% fashion, 39.8% mechanical; avg. firm age 34.93 years; 82.65% small, 17.35% medium). Nonresponse bias assessed by early vs. late respondents t-tests showed no significant differences. Measures (Likert unless noted): - Entrepreneurial alertness—Scanning and searching: Tang et al. (2012) 6-item scale; α=0.85. - Cognitive style—Rational: Betsch & Kunz (2008) 6 items; α=0.90. Intuitive: 5 items combining Covin et al. (2001) and Khatri & Ng (2000), emphasizing experience-based intuition; α=0.81. - Decision-making effectiveness: 4 items adapted from Jansen et al. (2013) on contribution to turnover, profits, satisfaction, and achievement of expected results; 3-point scale (1=a few to 3=a great deal); summed index. Common method variance controls: Ex-ante procedural remedies (anonymity, separated scales, clear wording). Ex-post Harman’s single-factor test revealed three factors; first explained 35% (<50%), suggesting CMV not a major concern. Measurement validation: Confirmatory Factor Analysis (LISREL 8.80). Model fit: IFI=0.98, TLI=0.98, CFI=0.98, RMSEA=0.04. Convergent validity: AVE ≥0.50 for most constructs (Intuition AVE=0.47, but CR=0.82); CRs all ≥0.70. Discriminant validity supported (AVE greater than maximum squared inter-construct correlations). Analysis: Hypotheses tested via regression analyses in SPSS v26. Mediation tested using PROCESS macro (Model 4) with two mediators and 5,000 bootstrap samples to estimate indirect effects with bias-corrected 95% confidence intervals.

- H1 supported: Scanning and searching positively predicted decision-making effectiveness (β=0.631, p=0.011). - H2a supported: Scanning and searching positively related to rational cognitive style (β=0.569, p<0.001). - H2b not supported: Scanning and searching was not significantly related to intuitive style (β≈-0.055, p=0.614). - H3a supported: Rational style positively affected decision-making effectiveness (β=0.941, p<0.001). - H3b supported: Intuitive style positively affected decision-making effectiveness (β=0.490, p=0.027), though the rational effect was stronger. - Mediation: H4a supported—Rational style mediated the relationship between scanning/search and decision-making effectiveness; the 95% bootstrap CI for the indirect effect did not include zero (e.g., LLCI≈0.11, ULCI≈0.88). H4b not supported—Intuitive style did not mediate (CI crossed zero; LLCI≈-0.16, ULCI≈0.08). Overall: Being alert via scanning and searching improves decision effectiveness primarily through a rational cognitive processing pathway; intuition contributes directly to effectiveness but is not the mechanism linking alertness to effectiveness.

Findings demonstrate that the scanning/search component of entrepreneurial alertness enhances decision-making effectiveness and that this effect operates mainly through a rational cognitive style. This clarifies the pathway from knowledge acquisition (alertness) to decision outcomes, showing that entrepreneurs benefit from systematically processing the information they scan and store. While both rationality and intuition improve decision effectiveness, rationality has a stronger influence and uniquely mediates the alertness–effectiveness link. The results refine entrepreneurial cognition theory by connecting alertness-driven knowledge structures with decision processes and outcomes, and they challenge stereotypes of entrepreneurs as primarily intuitive by evidencing a balanced but rationally weighted cognitive approach.

The study advances understanding of how entrepreneurs turn alertness into effective decisions by identifying rational cognitive style as the key mechanism linking scanning/search to decision-making effectiveness. It also shows that both rational and intuitive styles contribute to effectiveness, though rationality plays the dominant role. Practically, entrepreneurs should pair environmental scanning with deliberate, systematic information processing to convert insights into effective strategic choices. Future research should examine the other alertness dimensions (association/connection; evaluation/judgment), test additional cognitive mechanisms (e.g., metacognition, social cognition, counterfactual thinking), and employ longitudinal and qualitative designs to establish causality and deepen process insight, including in turbulent contexts such as COVID-19.

- Scope limited to the scanning/searching dimension of alertness; association/connection and evaluation/judgment were not examined. - Cross-sectional self-report design limits causal inference and is subject to common method concerns despite mitigations. - No significant link found between scanning/search and intuitive style; relationships involving other alertness dimensions and intuition merit study. - Sample limited to 98 SME entrepreneurs in two manufacturing segments in one Italian region, which may affect generalizability.