Cognitive misfit and firm growth in technology-oriented SMEs

In this study, we examine how the founding owner-managers’ cognitive style, levels of formalisation in their firms, and the interaction of these two variables (cognitive misfit) are related to firm growth in technology-oriented SMEs. We found that an intuitive decision-making style, higher levels of formalisation, and their interaction were significantly associated with firm growth over a five-year period. There has been a recent surge of interest in entrepreneurs’ cognition (Mitchell et al., 2002, 2007) and the role of context on cognitive processes (Baron, 1998). Our findings suggest that incorporating individual cognition within a PO fit approach from the field of organisational behaviour can further our understanding of the key role of the founding owner-managers play in the subsequent growth of their firms. The implications of these findings for practitioners, researchers, and policy makers are developed.

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