Entrepreneurial Action and the Role of Uncertainty in the Theory of the Entrepreneur

Abstract

By considering the amount of uncertainty perceived and the willingness to bear uncertainty concomitantly, we provide a more complete conceptual model of entrepreneurial action that allows for examination of entrepreneurial action at the individual level of analysis while remaining consistent with a rich legacy of system-level theories of the entrepreneur. Our model not only exposes limitations of existing theories of entrepreneurial action but also contributes to a deeper understanding of important conceptual issues, such as the nature of opportunity and the potential for philosophical reconciliation among entrepreneurship scholars.

The formation of opportunity beliefs among university entrepreneurs: an empirical study of research- and non-research-driven venture ideas

“…(McMullen and Shepherd 2006, p. 141) If the doubt concerning a perceived third-person opportunity can be reduced, this is likely to lead to the decision to exploit this opportunity, i.e. a first-person opportunity (McMullen and Shepherd 2006). Thus, strong third-person opportunity beliefs should be related to entrepreneurial action.…”

“…Without a certain degree of domain-specific knowledge, i.e. industry knowledge or understanding of customer needs, one may not recognize the possibility for action (McMullen and Shepherd 2006;Shane 2000). Industry experience is associated with contextual knowledge that makes nascent entrepreneurs better positioned to gather relevant information and adapt their business idea to a feasible, operable state, thus, increasing the perceived confidence in the venture idea (Dimov 2010;Fiet 1996).…”

“…McMullen and Shepherd (2006) conceptualize opportunity recognition as a two-stage process: Initially, a person forms a subjective believe that an opportunity exists for somebody with the relevant qualities and means. Once a person perceives such a socalled 'third-person opportunity', he or she forms beliefs regarding this opportunity and on whether to exploit it or not, i.e.…”

“…Opportunity beliefs are formed in situations of uncertainty (Knight 1921;McMullen and Shepherd 2006). Specific knowledge related to the perceived opportunity can help to reduce this uncertainty because it ''sheds light on the degree to which the opportunity exists and can realistically be pursued'' (Wood et al 2014, p. 257).…”

The Introduction of a Non-Traditional and Aggressive Approach to Banking: The Risks of Hubris

“…(Chairman's Statement, Annual Report, 1999) [Mr. Fitzpatrick] also believed that the consolidation now taking place in Ireland's banking industry would be good for a niche player like Anglo in that it was bound to drive more customers to the group (Irish Independent, November 24, 1999) Anglo's senior managers also established a clear link in discourse between the bank's ability to recognize and exploit the opportunities emerging in the banking field through aggressive and focused business lending and an increase in its profitability. Opportunity recognition by senior managers at Anglo Irish Bank was a necessary precursor to their efforts to evaluate these opportunities and to pursue them (McMullen and Shepherd, 2006;Thomas et al, 1993). For example, in the 2000 Annual Report, Chief Executive Fitzpatrick observed that ''it is clear that the key to the success we have achieved is the provision of an unparalleled quality of service in a very focused manner to well defined niche markets''.…”