Edited by Hans Landström and Franz T. Lohrke
Chapter 8: On the Relevance of Decision-making in Entrepreneurial Decision-making
Saras D. Sarasvathy and Henrik Berglund INTRODUCTION: ENTREPRENEURSHIP AS DECISION-MAKING The very first Frontiers of Entrepreneurship Research, published in 1981, included an article on venture capital decision-making. Mostly atheoretical, it just mapped out the process of decision-making. Thereafter, Olson defined entrepreneurs as decision makers: This paper has characterized entrepreneurs as decision makers who identify and capitalize on opportunities through approaches that emphasize innovation, profitable venture identification, effectiveness rather than efficiency, and nonprogrammed or ambiguous situations. (Olson, 1986) The link between decision theory and entrepreneurs was noted as early as 1959, however, in Administrative Science Quarterly. In a paper entitled ‘Managers and entrepreneurs: a useful distinction?’, Heinz Hartmann argued for decision-making as a basic and useful differentiator between managers and entrepreneurs. More recently, however, scholars are beginning to include affect and even biological and neurological processes in determining entrepreneurial behavior. Yet, when we examine the actual use of decision-making research in our scholarship, it is clear that only a thin slice of what is possible has been accomplished, to date. Even more importantly, hardly any efforts have been made to take results from entrepreneurship back to scholarship in decision-making – whether to cumulate overlapping findings or to challenge assumptions and claims. Accordingly, in this chapter, we hope to highlight both the untapped possibilities from decision-making to entrepreneurship and the opportunities for dialog back from entrepreneurship to decision-making. We begin with a brief overview of the history of decision-making, which turns out to be a tapestry of arguments around the notion of...
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