Professional Documents
Culture Documents
Objectives
Examine entrepreneurial strategic decision-making factors of risk and motivation Understand cognitive biases and heuristics common in entrepreneurship
Entrepreneurs tend to accept risks, resist norms, and be less predictable in decisions
And may see things differently than others
Risk propensity
Risk propensity: attitudinal component referring to the tendency to take risks that varies across distinct decision contexts
Scenario driven + Individual tendencies
Win one round of golf to earn an A in the course?
Company type and size brings different risks to managers, which can be complex and high-risk
Entrepreneurial motivation
Motivation: the factors through which goal-directed behavior is initiated, energized and maintained For entrepreneurial strategic decision-making, three factors are emphasized:
Self-efficacy Cognitive motivation Tolerance for ambiguity
Overconfidence of entrepreneurs
Refers to an individual tendency to overestimate ones capabilities, knowledge and skills
Results in being overly optimistic of the future
Helps entrepreneurs to successfully face multiple hurdles of starting and managing Valuable to encouraging and persuading others Explains why most new ventures fail
Willingness to generalize based on small and nonrandom samples of events Results in inaccurate perceptions of reality
Summary
Entrepreneurial strategic decision-making involves complex psychological factors to include risk and motivation Cognitive biases and heuristics play a central role in identifying and analyzing entrepreneurial opportunities