Fear and Entrepreneurship: A Review and Research Agenda

• Published date: 01 April 2015
• Author: James C. Hayton,Gabriella Cacciotti
• Date: 01 April 2015
• DOI: http://doi.org/10.1111/ijmr.12052

Fear and Entrepreneurship: A Review and

Research Agenda*

Gabriella Cacciotti and James C. Hayton

Warwick Business School, University of Warwick, Coventry, CV4 7AL, UK

Corresponding author email: gabriella.cacciotti.12@mail.wbs.ac.uk

A systematic review of the entrepreneurship literature on fear published up to 2014

highlights several key characteristics. First, the predominant focus in research exam-

ining the emotion of fear in entrepreneurship is on the specific concept of fear of

failure. However, this literature shows a lack of precision in the conceptualization and

operationalization of this construct. The impact of the experienceof fear on individual

cognition and behaviour can be beneficial as well as detrimental. Despite this dualistic

nature, to date, fear is examined as only a barrier to entrepreneurial behaviour.This

review reveals a clear dichotomy in the literature, with significantly morefocus on fear

as a trait that distinguishes between people than as a temporary state that is commonly

experienced by manypeople .Defining fear of failure as a context-specific phenomenon,

this paper explains the importance of focusing on the temporary cognitive and emo-

tional experience of fear and use conceptual observations as a platform to develop an

agenda for future research.

Introduction

The entrepreneurial journey starts with jumping off

a cliff and assembling an airplane on the way down.

(Reid Hoffman, founder of LinkedIn)

Like base-jumpers, entrepreneurs take a plunge into

uncertainty. This metaphor captures the leap of faith

that surrounds the entrepreneurial process, and

depicts the decision to jump as an act of courage. In

base-jumping as well as in entrepreneurship, courage

is not the absence of fear; rather, it is the ability to take

action to achieve a worthy goal, in spite of the pres-

ence of fear (Kilmann et al. 2010). An emergingview

is that entrepreneurship is an emotional journey

(Baron 2008; Cardon et al. 2012; Morris et al. 2012;

Schindehutte et al. 2006) and there are important

‘entrepreneurial emotions’ (Cardon et al. 2012, 3)

that can positively relate to entrepreneurial behaviour

such as entrepreneurial passion, optimism and vigour

(e.g. Cardon et al. 2005, 2009; Hahn et al. 2012).

Research has also identified emotional elements that

can work against entrepreneurial tasks and entrepre-

neurial efforts such as grief, doubt and fear (Foo 2011;

Grichnik et al. 2010; Shepherd 2003; Shepherd et al.

2007, 2009, 2011; Welpe et al. 2012).

Consideration of the role of fear in entrepreneur-

ship opens unexplored avenues for understanding

entrepreneurial motivation. Fearreflects the appraisal

of threats in the external environment that causes

changes in brain and organ function, and that can be

manifested in qualitatively different behavioural

responses: approach the threat aggressively (fight),

escape from the threat (flight) or be paralyzed in

front of the threat (freeze) (Gray 1971; Lazarus

1991). The nature of fear and the diverse cognitive

and behavioural mechanisms that it triggers suggests

that it could be a friend as much as a foe, by causing

greater striving towards desired goals (Martin and

Marsh 2003). Some studies of the impact of fearful

emotions on opportunity evaluation and entrepre-

neurial actions do not specify the object of the affec-

tive arousal of fear (e.g. Grichnik et al. 2010; Foo

*A free Video Abstract to accompany this article is

available at http://onlinelibrary.wiley.com/journal/10.1111/

(ISSN)1468-2370

C2015 British Academy of Management and John Wiley & Sons Ltd. Publishedby John Wiley & Sons Ltd, 9600 Garsington

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International Journal of Management Reviews, Vol. 17, 165–190 (2015)

DOI: 10.1111/ijmr.12052

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G. Cacciotti and J.C. Hayton

2011). In other cases, studies explicitly relate the

fearful emotional reactions to the possibility of

failure of opportunity or outcome (e.g. Arenius and

Minniti 2005; Hessels et al. 2011; Koellinger et al.

2013; Mitchell and Shepherd 2010; Wagner 2007;

Wennberget al. 2013; Wood et al. 2014). Regardless

of whether fear is treated in a general or specific

sense, prior research has largely identified it as a

psychological barrier to entrepreneurship (e.g.

Arenius and Minniti 2005; Martins 2004; Sandhu

et al. 2011; Shinnar et al. 2012), emphasizing only

its inhibitory effects on entrepreneurial action. This

restrictive perspective on the role of fear has led

researchers to think that fear is not or should not be

part of the entrepreneurial journey.

Nevertheless, the possibility that fear may also

stimulate greater striving represents an intriguing

paradox worthy of examination (Mitchell and

Shepherd 2011). Fear can motivate increased

engagement in a task as well as withdrawal from it

(Atkinson 1957; Elliot 1997; Elliot and Church

1997). However, the quality of that engagement, the

goals that are chosen and how they are pursued are

influenced by the nature of the motivation (Atkinson

1957; Elliot 1997; Martin and Marsh 2003). Further-

more, the ways in which individualsrespond to nega-

tive performance feedback and small setbacks are

also influenced by the degree to which they are moti-

vated by fear (e.g. Dweck and Leggett 1988; Martin

and Marsh 2003). A more nuanced view of the

effects of fear would reveal the different qualities of

motivation and their potential outcomes for well-

being and performance.

Unfortunately, fully understanding the role of

fear remains difficult because of the diversity and

ambiguity of definitions and components attributed

to this construct within the entrepreneurship litera-

ture. This literature makes clear that we can

examine affect in terms of both temporary states as

well as enduring dispositions (e.g. Lazarus 1991;

Weiss and Cropanzano 1996). The distinction

between fear as temporary emotional state and as

stable disposition has important implications for

how the construct is conceived and studied in entre-

preneurship. Studies that assume a motivational ori-

entation describe fear as a cognitive process linking

environmental cues with psychological and behav-

ioural outcomes (e.g. Li 2011; Welpe et al. 2012).

Studies that assume a personological orientation

describe the tendency to experience fear, or fearful

attitudes to an object, as a stable disposition that

distinguishes one person from another (e.g. Arenius

and Minniti 2005; Hessels et al. 2011; Wagner and

Stenberg 2004). Examining fear as a stable dispo-

sition vs. a temporary state reflects different

research questions and might produce quite differ-

ent inferences about the implications of fear for

entrepreneurial actions and relevant outcomes.

These issues highlight a need for greater clarity

about the conceptual space and operationalization

of this construct in entrepreneurship.

This paper makes several contributions. We review

the literature on fear and entrepreneurship to under-

stand the status of this construct within our field. We

focus on the effects of fear as well as on the theoreti-

cal underpinnings adopted to define the nature of fear

in entrepreneurship. A thorough examination of the

existing entrepreneurship literature demonstrates

that, among studies of fear in entrepreneurship, there

is a pervasive tendency to focus on the fear of failure

and its impact on the decision to start a business.

However, avoidance of entrepreneurship as an occu-

pational choice reflects a limited range of the poten-

tial behavioural and affective correlates of fear.

We also acknowledge that inconsistency in the

conceptualization and operationalization of fear of

failure in entrepreneurship has affected the way we

have theorized about the construct so far. Hence, we

address the conceptual issues by bridging the

personological and motivation approaches to fear of

failure and discuss the features that make the entre-

preneurship domain a unique achievement context.

In so doing, we set the stage for framing the experi-

ence of fear of failure as a context-specific phenom-

enon. Our contribution to the literature is moving

away from the simplistic categorizations of fear as

either a discrete emotional state or a trait, and pro-

posing a reconceptualization of fear of failure that is

consistent with the process-oriented perspective of

entrepreneurship (Dimov 2007). On the basis of

these observations, we propose a research agenda.

Method

We conducted a systematic literature review follow-

ing the process suggested by Tranfield et al. (2003),

Denyer and Tranfield (2008) and Macpherson and

Jones (2010) and applied in recent review articles

(e.g. Lee 2009; Rashman et al. 2009; Wang and

Chugh 2014). We started the systematic review

process by tracing the conceptual boundaries of the

relationship between fear and entrepreneurship (see

Figure 1). We defined fear as a discrete negative

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