Performance, stress hormone level and mental functioning within entrepreneurs at risk of insolvency: Evaluation of a coaching program (InsoCoach)

• Applicants: Professor Dr. Clemens Kirschbaum; Professor Dr. Jürgen Wegge
• Subject Area: Social Psychology, Industrial and Organisational Psychology
• Term: from 2014 to 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 252061090

Small and medium sized enterprises (SMEs) contribute substantially to economic growth. However, when compared to large companies SMEs characterized by low turnover rates and small number of employees are more susceptible to market fluctuations as for instance grow-ing competition and costs. When faced with financial problems, entrepreneurs of SMEs typi-cally act rather late. The slower they try to counteract the upcoming crisis, the more restricted their decision authority and the higher the likelihood for insolvency. Moreover, it is known that entrepreneurs who face potential insolvency experience extreme financial, emotional and cognitive strain. Such enormous strain results in deficits concerning their decision-making and self-regulation processes that, in turn, accelerate the insolvency process and harm entrepreneurs substantially. Therefore, the core objective of this research project is to analyze the impact of impending insolvency within 144 entrepreneurs in SMEs. For the first time, the consequences of a financial crisis will be analyzed longitudinally and simultaneously from biological, psychological and cognitive perspectives. Specifically, health, cognitive functioning and self-leadership of insolvent and solvent entrepreneurs (control group) will be compared. Moreover, insolvent entrepreneurs will participate in a psychologically sound, professional coaching promoting health, working ability and self-leadership capacity. This coaching program will extend traditional insolvency consulting that typically includes only legal and economic aspects. The effects of the coaching intervention on biological, psychological and cognitive functioning of insolvent entrepreneurs will be evaluated.

• DFG Programme: Research Grants