A Cognitive Perspective
Chapter 6: Entrepreneurial Decision Styles and Cognition in SMEs
6. Entrepreneurial decision styles and cognition in SMEs Gerardus J.M. Lucas, Patrick A.M. Vermeulen and Petru L. Curs eu ¸ 6.1 INTRODUCTION This chapter focuses on decision-making in small and medium-sized enterprises (SMEs). The success of an SME depends to a large extent on eﬀective strategic decision-making (Robinson and Pearce, 1983). However, not much is known about the decision processes that underlie the decisions of SME entrepreneurs. In contrast to decision-making in large enterprises, decision-making procedures in SMEs involve fewer actors or just one actor and generally do not involve organizational politics. Hence, it has been argued in the literature that explaining decision-making processes in SMEs requires new models (Brouthers et al., 1998; Papadakis et al., 1998; Gilmore and Carson, 2000). Busenitz and Barney (1997) argued that entrepreneurs are more likely to fall prey to biases in decision-making and to improperly rely on heuristics compared to decision-makers in large ﬁrms. This implies that decision-making by entrepreneurs in SMEs is indeed a distinct phenomenon, with its own characteristics and peculiarities. Given that in a typical SME one or only a few individuals are involved in decision-making, we assume that the decision-making style of such an entrepreneur is bound to have an impact on the decision process, as well as on its outcomes. Chapter 2 argued that a variety of entrepreneurial types can be distinguished. The most relevant diﬀerence in this regard is their approach to decision-making and their perception of what is important in this process. Gibcus et al. (2008)...
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