Cognitive approaches to new venture creation

Cognitive processes play a critical role in the formation of new ventures. Moreover, the effects of managerial cognition are likely to be more direct and immediate in new venture settings than in the context of larger, more established organizations. For these reasons, the theories and methods of managerial and organizational cognition can provide insight into the process of new venture creation. This paper reviews recent studies that take a cognitive approach to new venture creation and categorizes them according to the stage of new venture creation with which they are concerned. Key issues discussed include the formation of entrepreneurial intentions, the sensemaking processes of scanning, interpretation and action, the use of schema and heuristics in decision‐making and the phenomenon of entrepreneurial alertness. Several preliminary research conclusions are drawn, and the implications of these findings for the practice of entrepreneurship are considered. Finally, several promising avenues for future research are explored.