Entrepreneurship, Competitiveness and Local Development
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Entrepreneurship, Competitiveness and Local Development

Frontiers in European Entrepreneurship Research

Edited by Luca Iandoli, Hans Landström and Mario Raffa

This book draws together leading academics to provide a state-of-the-art overview of the key challenges to entrepreneurship in Europe.
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Chapter 5: Prediction or Control? Exploring the Influence of Career Experience and Career Motives on Entrepreneurial Decision Making

Jonas Gabrielsson and Diamanto Politis


5. Prediction or control? Exploring the influence of career experience and career motives on entrepreneurial decision making Jonas Gabrielsson and Diamanto Politis INTRODUCTION Literature and research on entrepreneurship increasingly emphasize the discovery of opportunities and the decision to exploit them as the essence of entrepreneurial activity (Shane and Venkataraman, 2000; Shane, 2003). Considering that entrepreneurs often deal with new and ill-defined business concepts whose commercial applications are not yet fully explored, the new venture creation process can be considered as exploratory in nature and associated with high scarcity of available resources (Sarasvathy, 2001a). This implies that new venture creation activities require frequent decisions about what opportunities are worth pursuing and, among the various solutions available, which are worth exploring (Simon et al., 2000). These decisions are in turn complicated by the uncertainty that surrounds the commercial return of most entrepreneurial initiatives. In a recent study, Sarasvathy (2001a) describes two kinds of decisionmaking modes in business settings: causation and effectuation. Causation is described as the use of techniques of analysis and estimation to explore and exploit existing and latent markets. Causal reasoning focuses on what ought to be done given predetermined goals and possible means, implying a process that rests on the logic of prediction. Effectuation, on the other hand, calls for the use of synthesis and imagination to create new markets that do not already exist. Effectual reasoning emphasizes the question of what can be done given possible means and imagined ends, implying a process...

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