A Cognitive Perspective
1. Entrepreneurs and strategic decisions Patrick A.M. Vermeulen and Petru L. Curseu ¸ 1.1 INTRODUCTION Making decisions is a daily routine. We make decisions that involve our private life (for example, what we eat, how to dress, what to do in our free time) as well as speciﬁc decisions related to our work. Decision-making is a cognitive process that involves the selection of a speciﬁc course of action that is supposed to bring us to a certain result. The fact that there is selection in decision-making implies that there are alternative choices to be considered. Often, we do not know the exact outcomes of these alternatives and thus one of the key challenges in decision-making is the reduction of uncertainty. One way to reduce uncertainty is to gather relevant information before we make a decision. We use the speciﬁc information to ﬁll in the cognitive gaps and choose the most suitable alternative for our purposes. For example, if we want to make a choice about what to wear, we might check the weather forecast, look at our agenda for important meetings, or ask someone for advice. On the basis of this information we look over our alternatives and make a choice. Another way to reduce uncertainty is to apply pre-existing heuristics (cognitive short cuts developed through experience) and to use just a minimal number of cues when making a choice. In the example above, we might decide to take our jacket as well as an umbrella, simply based...
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