Challenge and threat appraisal of entrepreneurial errors: a latent profile analysis and examination of coping responses

Abstract

According to transactional stress theory (TST), the extent to which entrepreneurs cope with errors by engaging in error damage control or ruminating about disengaging from their business goals depends on whether they interpret action errors as predominantly challenging or threatening. Using latent profile analysis (LPA), the current study investigates the existence of latent profiles of challenge and threat appraisal of entrepreneurial errors and their relationship with error damage control and rumination about business goal disengagement in a sample of 649 entrepreneurs. The results identify five appraisal profiles characterized by different challenge and threat appraisal intensities. The levels of error damage control and rumination about business goal disengagement differed between the profiles. Specifically, entrepreneurs high in challenge and threat appraisal showed higher levels of both forms of coping than those low in appraisal. Entrepreneurs falling into a high challenge and low threat appraisal profile exhibited the lowest level of business goal disengagement. Still, they showed similar levels of error damage control to those high on challenge and threat appraisal. Implications for the further development of TST and the development of effective error management interventions are discussed.