Uncertainty Types and Transitions in the Entrepreneurial Process

While judgment has hitherto typically been viewed as a discrete decision process, we propose that it be conceptualized instead as a continuous and dynamic process of reassessment and revision. Adopting this approach, we revisit the nature of entrepreneurial decision making under uncertainty. We begin with a novel typology of uncertainty that defines and delineates different types of uncertain contexts. We then examine the nature of decision making within these distinct contexts, highlighting differences in how entrepreneurs make decisions within different types of uncertainty. We build these insights into a theory of the entrepreneurial process that highlights the transitory nature of uncertainty as entrepreneurs make certain judgments and revise those judgments over time. We discuss how uncertainty transitions throughout the judgment process, how the judgment process continues dynamically even after a judgment is made, and how the nature of uncertainty shifts over time due to endogenous and exogenous change

Facing the future through entrepreneurship theory:A prospective inquiry framework

In this paper, we address a thorny challenge: how can entrepreneurship scholarship enhance its impact without compromising the pursuit of conceptual rigor and theoretical novelty? We propose a prospective inquiry framework for entrepreneurship. It aims to align the scholarly pursuit of theoretical novelty with the entrepreneurs’ focus on the future, in a shared aspiration to make a difference in the world. By expanding the focus of theoretical work toward the future, scholarship can focus on the formulation, exploration, and evaluation of alternatives to the present, as theoriesfor desired futures. Prospective inquiry retains the primacy of theorizing while expanding its purpose, value, and use in entrepreneurship research, unleashing its generative power. It opens new spaces for theoretical excellence, dissolves the research-practice gap, and allows researchers and practitioners to theorize and enact their aspirations for the future

On predictive entrepreneurial action in uncertain, ill-structured conditions

Decision-making is at the heart of entrepreneurship. Unsurprisingly, entrepreneurship research has engaged with processes of entrepreneurial decision-making resulting, most importantly, in the notions of causation, effectuation, and enactment. Nevertheless, the range of processes delineated to date remains somewhat incomplete. Drawing on crucial insights from the analysis of decision problem structures reveals that entrepreneurship theory has lacked a process that both recognizes the ill-structuredness typically surrounding entrepreneurial decisions and places prognoses center stage. While effectuation implicitly addresses structural defects but denies prognoses a central role, causation emphasizes the importance of predictions while being associated with well-structured, risky environments, and thus, unaffected by structural defects. Theorizing about a combination thereof, that is, a process recognizing and considering the ill-structuredness of entrepreneurial environments yet building on predictions of the future is overdue. This paper, therefore, seeks to foster a more comprehensive yet nuanced understanding of entrepreneurial decision-making processes by outlining the intrinsic features of one such process that we term execution and relating it to existing processes

On the cognitive microfoundations of effectual design: the Situated Function–Behavior–Structure framework

PurposeThe purpose of this article is to extend effectuation theory at the front end by building cognitive foundations for the effectual design process.Design/methodology/approachWe adopt an integrative conceptual approach drawing on design cognition theory to explain entrepreneurial cognition.FindingsWe find a significant gap in the entrepreneurial cognition literature with respect to effectuation processes. We thus integrate the Situated Function–Behavior–Structure framework from design theory to elaborate on the cognitive processes of effectuation, specifically with regard to the opportunity development process. This framework describes the cognitive subprocesses by which entrepreneurs means and ends are cyclically (re)formulated over time until a viable “opportunity” emerges, and the venture is formalized, or else, the entrepreneur abandons the venture and exits.”Practical implicationsUnravelling this entrepreneurial design process may facilitate more appropriate and effective design work by entrepreneurs, leading to more successful product designs. It also should facilitate the development of better design techniques and instruction.Originality/valueThis research contributes to new cognitive foundations for effectuation theory and entrepreneurial process research. It better explains how means are transformed into valuable goods over time through an iterative reconsideration of means-ends frameworks. This theoretical elaboration will expectedly facilitate additional research into the iterative cognitive processes of design and enable more formulaic design thinking

Developing entrepreneurial resilience from uncertainty as usual:a learning theory approach on readiness, response and opportunity

Purpose: This study explores resilience learning from uncertainty, taking a holistic view by considering individual, firm and contextual factors. Resilience development is understood by focusing on how uncertainty is related to entrepreneurs and their environment, suggesting that developing resilience needs to be a continuous learning process. Design/methodology/approach: This qualitative study explores factors related to entrepreneurial uncertainty, resilience and learning. Evidence is drawn from interviews with rural entrepreneurs in two regions of Indonesia, and analyzed using a rigorous approach to generate codes, second-order themes and aggregate dimensions for the theoretical contributions. Findings: Uncertainty readiness, uncertainty response and uncertainty opportunity for resilience emerge as the key learning areas from this study. They are related to resilience on a personal, community and systemic level. The proposed framework relates learning from uncertainty to the process of developing resilience for entrepreneurs and their communities. Originality/value: This study proposes a framework based on resilience motivation and learning from uncertainty as usual. It explores the relationships between uncertainty readiness, responses and opportunities with personal, relational and systemic resilience factors. This contributes to entrepreneurship behavior research at the intersection of organization studies and management in the socio-economic and often informal context of developing countries.</p

All Things Considered? – Technology Design Decision-making Characteristics in Digital Startups

Digital startups offer innovative products, for which they require a suitable technology solution. Choosing an appropriate technology design among the range of available designs is crucial, as the wrong design decision could have disastrous consequences for product development and quality, and waste valuable resources. While the literature has highlighted the role played by the decision context, little is known about ‘how’ technology design decisions are reached in digital startups. Using an exploratory research design, we investigate how technology design decisions are made in digital startups, and identify decision-making characteristics, consisting of three decision paradigms and seven decision attributes. Our empirical evidence suggests that in addition to the decision context, these decision-making characteristics play an important role in enabling digital startups to reach satisfactory technology design decisions. Our study thus lays the basis for more research on the topic, contributing to knowledge and practice of digital startups

Attracting the Entrepreneurial Potential: A Multilevel Institutional Approach

The research on institutions’ role in entrepreneurship acknowledges that formal and informal institutions matter. However, previous research has stressed less the co-existence and interaction between individual- and country-level factors that shape entrepreneurial potential, population of skill-full individuals with no entrepreneurial intentions, across countries. In this study, we investigate the multilevel influence of informal institutions on entrepreneurial potential. Drawing from institutional theory and multilevel approach in a sample of 880,576 individuals for the period 2006–2016, we find that the informal country-level institutional forces compensate the lack of individual-level factors among those with low entrepreneurial potential. For instance, media coverage on entrepreneurship or education can enhance the entrepreneurial potential in its lower end. Hence, our findings provide novel evidence on the relevance and interaction of the informal institutions among potential entrepreneurs. Our findings suggest policy implications regarding educational programs to close the gap between entrepreneurially skilled non-potential and skilled potential individual

Political decision making in the COVID-19 pandemic: The case of germany from the perspective of risk management

The COVID-19 pandemic is permanently changing modern social and economic coexistence. Most governments have declared infection control to be their top priority while citizens face great restrictions on their civil rights. A pandemic is an exemplary scenario in which political actors must decide about future, and thus uncertain, events. This paper tries to present a tool well established in the field of entrepreneurial and management decision making which could also be a first benchmark for political decisions. Our approach builds on the standard epidemiological SEIR model in combination with simulation techniques used in risk management. By our case study we want to demonstrate the opportunities that risk management techniques, especially risk analyses using Monte Carlo simulation, can provide to policy makers in general, and in a public health crisis in particular. Hence, our case study can be used as a framework for political decision making under incomplete information and uncertainty. Overall, we want to point out that a health policy that aims to provide comprehensive protection against infection should also be based on economic criteria. This is without prejudice to the integration of ethical considerations in the final political decision

From Knightian uncertainty to real‐structuredness: Further opening the judgment black box

Research Summary: Entrepreneurial judgment remains a concept that resembles a black box. This article attempts to further open that black box by developing a dimensionalization of types of judgment. To achieve this, it joins recent efforts to explicitly link entrepreneurship to Simonian themes by integrating the notion of decision problem structures into the judgment-based approach (JBA) to entrepreneurship. This article proposes a more comprehensive and nuanced approach to judgment in the face of decision problems we label “realstructured.” Extending the JBA comes with several important implications: It uncovers additional entrepreneurial knowledge problems, provides new insights for both economic organization and judgment communicability, and informs research on entrepreneurial success and failure. It also sheds new light on the controversy over the relationship between effectuation and judgment. Managerial Summary: When taking decisions, entrepreneurs cannot know how the future will pan out. Those decisions are made under conditions of uncertainty and only time will tell whether they prove astute or otherwise. The uncertainty of the future leads entrepreneurs to exercise judgment based on their individual beliefs and to act accordingly. The components of that entrepreneurial judgment remain rather underexplored. The purpose of this article is to dig deeper into, and thereby improve, the understanding of entrepreneurial judgment. The main result of this article is a four-part dimensionalization of judgment, covering entrepreneurial (sub-)judgments on the effects incurred by action, the appraisal of action alternatives, the goals underlying action, and resolving the decision problem