Whitman School of Management at Syracuse University
Abstracts > Abstract Details JDE

Abstract Details

The Moderator Effect of Cognitive Ability on the Relation Between Planning Strategies and Business Success of Small Scale Business Owners in South Africa: A Longitudinal Study
Vol. Volume 7, Number 3 October/2002

Susanne Escher, Rafal Grabarkiewicz, Michael Frese, Gwenda van Steekelenburg, Maartje Lauw, Christian Friedrich
This article argues that there is a moderator effect of cognitive ability on the relationship between of planning with business success. Two contradictory hypotheses were tested: either people with a high degree of cognitive ability are able to use planning more efficiently, and , therefore, profit more from planning; or, there is a compensatory effect as people with a low degree of cognitive ability profit more from planning than owners with high cognitive ability. This was tested on South African small-scale business owners who participated in a cross-sectional (N=140) and longitudinal study (N=51). A compensation effect was found, which means that business owners with low cognitive ability could compensate their low degree of cognitive ability with detailed planning. In such a case, they could achieve the same success as owners with a high degree of cognitive ability. For high cognitive ability owners, it did not matter much whether they planned or not.

Keywords: