Inspired or foolhardy: sensemaking, confidence and entrepreneurs' decision-making.

Cunningham, James; Anderson, Alistair R.

Abstract

The purpose of this paper is to investigate the role of confidence in how both new and experienced entrepreneurs interpret and make sense of their business environment to inform decision-making. We illustrate our conceptual arguments with descriptive results from a large-scale (n = 6289) survey on entrepreneurs' perception of business performance and their decisions taken at a time of uncertainty in an economic downturn. Quantitative findings are stratified along experiential lines to explore heterogeneity in entrepreneurial decision-making and directly inform our conceptual arguments, while qualitative data from open questions are used to explain the role of confidence. Newer entrepreneurs are found to be more optimistic in the face of environmental risk, which impacts on their decision-making and innovative capabilities. However, the more experienced entrepreneurs warily maintain margin and restructure to adapt to environmental changes. Instead of looking directly at the confidence of individuals, we show how confidence impacts sensemaking, and ultimately, decision-making. These insights inform research on the behaviour of novice and experienced entrepreneurs in relation to innovative business activities. Specifically, blanket assumptions on the role of confidence may be misplaced as its impact changes with experience to alter how entrepreneurs make sense of their environment.

Citation

CUNNINGHAM, J. and ANDERSON, A.R. 2018. Inspired or foolhardy: sensemaking, confidence and entrepreneurs' decision-making. Group decision and negotiation [online], 27(3), pages 393-415. Available from: https://doi.org/10.1007/s10726-018-9563-0

• Journal Article Type: Article
• Acceptance Date: Feb 10, 2018
• Online Publication Date: Feb 22, 2018
• Publication Date: Jun 30, 2018
• Deposit Date: Feb 23, 2018
• Publicly Available Date: Feb 23, 2018
• Journal: Group decision and negotiation
• Print ISSN: 0926-2644
• Electronic ISSN: 1572-9907
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 27
• Issue: 3
• Pages: 393-415
• DOI: https://doi.org/10.1007/s10726-018-9563-0
• Keywords: Confidence; Entrepreneurs; Decision making; Experience; Mixed method
• Public URL: http://hdl.handle.net/10059/2778