Evaluation of New Business Ideas: Do Gender Stereotypes Play a Role?

In recent years, researchers have given considerable attention to investigating the nature of new venture evaluation--the process through which ideas for potentially profitable new business ventures are assessed (Baron and Ensley, 2006; Chen et al., 2009). Research on evaluating new venture ideas has added greatly to understanding this aspect of the entrepreneurial process by providing evidence that new venture ideas often are assessed under conditions of uncertainty and ambiguity in which clearly defined rules for making judgments and decisions are rarely found (Baron et al., 2006; Kickul et al., 2009). Thus, scholars posit and empirical evidence indicates that heuristics and biases can play a substantial role in new venture evaluations (Smith et al., 2009). The present study theorizes and tests the role of a particular source of bias--gender stereotypes--in evaluation of new business ideas. Gender has been described as an "institutionalized system of social practices" that helps construe the masculine and feminine as different in socially relevant ways (Ridgeway, 2001). It is culturally defined and transmitted through interactions between people, in mass media, and by popular discourse (Ahl, 2006). Widely-held beliefs about the characteristics and attributes associated with gender differences constitute gender stereotypes (Heilman, 2001), which serve as "pictures in the head" for individuals when making judgments and assessments (Ashmore and Del Boca, 1979: 225). Such stereotypes have been found to influence assessments of male- and female-typed jobs, such that the former are often evaluated higher and provided more wages than the latter (Cohen and Huffman, 2003; Karlin et al., 2002). The present study investigates the influence of gender stereotypes on assessment of new business ideas. This research is located at the fertile intersection of cognitive science and entrepreneurship, which has attracted substantial research attention in the last decade (e.g., Baron and Ward, 2004; Mitchell et al., 2002; Mitchell et al., 2011). As Chen et al. (2009) posit, in ambiguous and uncertain environments, where growth opportunities and risk factors associated with new business ideas are difficult to verify, people tend to rely on implicit mental models or belief structures in making their evaluations. Investigation of the heuristics and mental structures that people use to assess, judge, or make decisions involving new business ideas has become an important topic in entrepreneurship research (Mitchell et al., 2007). These studies have furthered academic understanding of the role of cognitive biases in the entrepreneurial process, but scholars have only begun to scratch the surface in terms of understanding the role of gender stereotypes in influencing evaluations of new venture ideas (Bigelow et al., 2012). This study aims to redress this gap in the literature by examining the role of individual (evaluator sex and their endorsement of sexist beliefs) and contextual (salience of gender stereotypical information--stereotype activation; Wheeler and Petty, 2001) factors in influencing evaluations of male- and female-typed venture ideas. Two-, three-, and four-way interaction hypotheses about the conditions under which men and women differently evaluate male- and female-typed business ventures are generated based on theory. Multivariate configurations are believed to offer more useful and complete explanations of scientific phenomenon than those provided by simple linear relationships (Doty and Glick, 1994). Hypotheses are tested using an experimental design, which has high internal validity and helps eliminate alternative explanations for possible cause-effect connections (Colquitt, 2008). THEORY AND HYPOTHESES Evaluation of new venture ideas is an important part of the entrepreneurial process (Baron and Ensley, 2006). Positive evaluation of a new idea makes it easier to attract human, social, and financial resources, and, thus, transform the idea into an actual business. …