The Hierarchical Cognitive Structure of Entrepreneur Motivation Toward Private Equity Financing

Abstract

This research investigates the motivation of 91 Italian entrepreneurs for engaging in private equity financing. The laddering methodology is used to uncover cognitive schemas of entrepreneurs consisting of a structure of interconnected motives organized in a hierarchy. Means – end chain theory, the laddering technique, and principles from network analysis are used to interpret the schemas. The individual motives and connections among motives provide insights into why entrepreneurs make the decisions that they do and suggest practical implications for strategic decisions, everyday management and policy. The overall approach and results of this study differ fundamentally from traditional financial and business strategy points of view on decision making by entrepreneurs in that actual thinking processes, values and goals of managers are investigated to explain their choices and actions.

Keywords: Cognitive schemas, entrepreneurs, hierarchical motives, laddering, means-end chains, private equity