Download or read book Non-analytical Decision-making in Highly Uncertain Entrepreneurial Contexts written by Antoine Gilbert-Saad and published by . This book was released on 2020 with total page 350 pages. Available in PDF, EPUB and Kindle. Book excerpt: Entrepreneurs face the task of creating novel value for unknowable future markets, and thus make decisions in what is generally a highly uncertain, and often both value- and emotion-laden setting. In such contexts, they are recognised for relying on non-analytical decision-making approaches such as hunches and heuristics more than others, yet there is a paucity of insight beyond the inapplicability of normative standards of action on why they do so. I argue that a hindrance is that the study of entrepreneurial decision-making emerged as one form of strategic decision-making, with the central, often implicit, assumption of rational action defined as capturing the appropriate (i.e., eventually profitable) opportunity. However, as entrepreneurial opportunities need to be (at least partially) created and can only be assessed ex post, the rationality of entrepreneurial decision-making is not approachable through models that focus on predictive accuracy against an optimal outcome. Instead of optimising, entrepreneurs use judgment, defined here, following Knightian insights, as the purposeful reduction of perceived uncertainty based on the subjective opinion about the future. To understand the distinctiveness of entrepreneurial judgment and decision-making, it is thus necessary to start from both finer and broader conceptualisation of rationality. The thesis builds on 27 interviews and 25 think-aloud protocols with nascent entrepreneurs. Guided by an interpretivist paradigm, I investigate why entrepreneurs use non-analytical decision-making strategies, those that do not rely on linear processing of information to arrive at a predefined optimal outcome. I explore two of these non-analytical approaches, heuristics and intuition, and argue that they represent rational strategies for decision-making under highly uncertain contexts and when aligned with particular types of motivation held by the decision maker. The thesis is divided into three articles. In the first, I conceptualise two types of heuristics, arguing that under absolute uncertainty, heuristics are useful design rules that aid entrepreneurs’ judgment by synthesising mental models and expectations to enable purposeful action. In contrast, objectively rational decision heuristics are useful under predictable risk. The second article builds on semi-structured interviews with nascent entrepreneurs to inductively identify the contents (i.e., which rules are being expressed), functions (i.e., what they do), and roles (i.e., what they are used for) of the heuristics entrepreneurs use in situ, expanding on the concept of heuristics as simple rules. In the third article, I broaden the scope of study and focus on the use of intuition by entrepreneurs. While intuition is usually treated as a strategy adapted to experts under stable environment, I consider instead the differences in individual characteristics that underpin the use of these approaches, in particular the nature of the main motivation to initiate the venture. Thus, this thesis contributes to the literature on entrepreneurial decision-making in three ways. First, it provides a more coherent understanding of the strategies entrepreneurs use to approach decisions in what is usually a highly uncertain context, and present findings and implications that have the potential to inform other types of decision-making under uncertainty. Second, the conceptual study contributes deeper insights into what heuristics are, and more importantly, for which types of decisions they are useful. Third, the empirical studies show that the use of heuristics and intuition can be understood when approaching the analysis of decisions from a broader, and arguably more naturalistic, conceptualisation of rationality. These studies suggest reintroducing the subjectivity of goals in the study of entrepreneurship instead of developing normative prescriptions for entrepreneurial action based on a set of abstract features. By considering affect alongside cold cognition, this thesis uncovers the multiple hidden logics behind the use of non-analytical approaches.