The Decision-making Entrepreneur: A Literature Review

Abstract

The SCALES-paper series is an electronic working paper series of EIM Business and Policy Research. The SCALES-initiative (Scientific Analysis of Entrepreneurship and SMEs) is part of the 'SMEs and Entrepreneurship' programme, financed by the Netherlands' Ministry of Economic Affairs. Complete information on this programme can be found at www.eim.nl/smes-and-entrepreneurship The papers in the SCALES-series report on ongoing research at EIM. The information in the papers may be (1) background material to regular EIM Research Reports, (2) papers presented at international academic conferences, (3) submissions under review at academic journals. The papers are directed at a research-oriented audience and intended to share knowledge and promote discussion on topics in the academic fields of small business economics and entrepreneurship research. Contents 1 Introduction 2 Introduction to general decision theory 2.1 Classical rationality 2.2 Bounded rationality 2.3 Neoclassical rationality 2.4 Conclusion: what is the place of entrepreneur in the general decision theory? 3 Analytical framework of strategic decisionmaking in SMEs 3.1 The entrepreneur 3.2 The decision environment 3.3 The decision and the process of strategic decisionmaking 4 Empirical findings on entrepreneurial strategic decision-making Literature

Inducements, Impediments, and Immediacy: Exploring the Cognitive Drivers of Small Business Managers' Intentions to Adopt Business Model Change

“…Understanding how small business managers make strategic decisions and knowing what factors influence this process are of paramount importance for both researchers and practitioners. To date, researchers have devoted a disproportionate degree of attention to the study of strategic decision making in large corporations or start‐ups (Gibcus, Vermeulen, and Radunova ; Ivanova and Gibcus ), largely ignoring specific features of established and operating small businesses whose managers face crucial decisions. The recent emergence of a research stream in entrepreneurship, concerned particularly with strategic decision making by small business managers acting as “established” entrepreneurs (Gibcus, Vermeulen, and Radunova ), is specifically aimed at filling this gap.…”

Effect of Entrepreneurial Characteristics on Decision Making Process

“…In this study the Entrepreneurial Characteristics were examined on each decision making process. The Entrepreneurial characteristics adopted for this were Risk propensity, Locus of Control, Optimism, Competitiveness and Innovativeness [2,11], for the decision making process were Formalization [14,15,11].…”

“…The decisions made are influenced by the decision-maker's personality traits. According to Gibcus et al [1], entrepreneurs tend to overestimate their chances of success and generalize too easily from their limited experience. Entrepreneurs who have an internal locus of control are more likely to be selfassured, creative, and alert, find opportunities, and closely examine their surroundings to gather data for formulating the best strategy for developing those opportunities [2].…”

“…According to Gibcus et al [1], entrepreneurs tend to overestimate their chances of success and generalize too easily from their limited experience. Entrepreneurs who have an internal locus of control are more likely to be selfassured, creative, and alert, find opportunities, and closely examine their surroundings to gather data for formulating the best strategy for developing those opportunities [2]. Entrepreneurial behavior implies that they frequently base their decisions on subjective criteria and that they are likely to be optimistic.…”

An Exploration of the Relationship Between Personality and Strategy Formation Using Market Farmer: Using a Bespoke Computer Game in Behavioural Research

“…In an environment where there is little understanding of an optimal strategy, this approach advocates action as a means of generating responses from the environment that are then evaluated. Actions that produce positive results are retained and others are discarded, and strategies are thus derived through a process of trial and error [12].…”