Exploring Positive Outcomes of Decision Making Biases in the Field of Entrepreneurial Marketing

Nouri, Pouria; Imanipour, Narges; Talebi, K H Sagheb; Zali, Mohammadreza

doi:10.46743/2160-3715/2018.3280

Cited by 8 publications

(8 citation statements)

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“…However, before such benefits have been realised, entrepreneurs must have learnt to cope with failure they would have gone through. Whilst failure could affect the ability to learn critical lessons from the incidents, Shepherd (2003) has proposed that failure arising from entrepreneurial strategic decision-making, if well managed, can become a relevant learning curve and an important source of wisdom and entrepreneurial education for entrepreneurs (Kuntze & Matulich 2016;Nouri et al 2018), especially as they may want to embark on a business rescue mission (le Roux & Pretorius 2017), where learning from the failure would prove worthwhile. Other scholars such as Cannon and Edmondson (2005) have noted that benefits of failure are more in providing counselling and encouragement than they are in pragmatic situations; it is therefore important to comprehend the environment and circumstances in which failure has occurred in order to make the best out of the situation.…”

Section: Entrepreneurial Failure: Performance Nexusmentioning

confidence: 99%

The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe

Kapepa

Vuuren

2019

The Southern African Journal of Entrepreneurship and Small Busi

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Background: At the dawn of the 21st century, Zimbabwe started moving towards dangerous levels of the infamous hyperinflation trajectory that made management of businesses a nightmare. Many businesses failed.Aim: This study seeks to explore if entrepreneurship, and in particular the aspects of risktaking and tolerance of failure, could have saved the few companies that survived the menace that ravaged the insurance industries among many other sectors of the economy. Setting:The study looks at this particular entrepreneurial behaviour of risk-taking among insurance companies in Zimbabwe during the hyperinflationary environment that ravaged and defied economic logic and fundamentals. Savings were being eroded at a pace faster than anywhere in the world ever before, taking a toll on businesses as they struggled to survive.Methods: Using a survey sample of insurance companies in Zimbabwe, a quantitative approach was adopted. Questionnaires were used to extract data from participants to establish the nature and extent of risk-taking, and in particular tolerance for failure during this period. Therefore, tolerance of failure in corporate entities is discussed in this article as a critical aspect of risk-taking that enhances entrepreneurial innovation and ultimate prospects of corporate prosperity among insurance companies. A measure is developed to gauge the extent of tolerance of failure from the perspective of employees in the insurance industry in Zimbabwe. Results:The benefit of tolerance of failure or the lack thereof was measured on the dimension of profitability and growth. Results revealed that tolerance of failure is a necessary entrepreneurial virtue that encourages knowledge acquisition by both experimental and experiential learning -a risk element that also spurs entrepreneurial innovation and ultimately encourages both profitability and growth of the business entity, if well managed. Conclusion:The study concluded that firms that tolerate failure are more likely to be entrepreneurially innovative and perform better than those that are risk-averse and do not tolerate failure.

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Section: Entrepreneurial Failure: Performance Nexusmentioning

confidence: 99%

The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe

Kapepa

Vuuren

2019

The Southern African Journal of Entrepreneurship and Small Busi

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“…Busenitz (1999) argues that in the uncertain environment of business start-ups, many new ventures wouldn't exist without the use of biases. Nouri et al (2018) conclude that biases could have certain positive outcomes such as survival in the market, overcoming rivalry, as well as innovative behavior. And finally, Zhang et al (2020) suggest that certain levels of biases may enhance entrepreneurs' performance.…”

Section: Theoretical Backgroundmentioning

confidence: 94%

Exploring decision-making biases among Iranian entrepreneurs: some novel insights

Nouri

2021

JEEE

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Purpose Decision-making biases play decisive roles not only in entrepreneurs’ decisions but also in the fate of entrepreneurial businesses. While the extant literature in this regard is relatively rich, it has predominantly focused on certain biases like overconfidence and overoptimism at the expense of other possibly influential biases, which could influence entrepreneurial decisions. Thus, to address this serious research gap, this paper aims to explore four of the less-researched biases of escalation of commitment, the illusion of control, confirmation and the belief in the law of small numbers in entrepreneurial decisions. Design/methodology/approach By taking a qualitative approach, the data for this study were collected through face-to-face interviews with 19 Iranian habitual (experienced) entrepreneurs running small businesses and analyzed by a qualitative thematic analysis. Findings According to the results, the environmental uncertainty, the reluctance to lose face and the experiences of previous failures contributed to the escalation of commitment, while disregard for external factors beyond one’s control caused the illusion of control, factors like prior successful businesses in the same sector, looking for resorts to manage uncertainty, along with the decision to exploit opportunities resulted in the confirmation bias, while the expenses of conducting sweeping pilot tests in the market and the reluctance to reveal a business secret to the competitors were the main contributors of the belief in the law of small numbers. Originality/value This study is a pioneer in scrutinizing four less-researched but important biases in entrepreneurs and, thus extending the line of research in this regard.

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“…On the other hand, regarding heuristics, the study of Sinyard et al (2020) agree that heuristics and entrepreneurship with the evidence of entrepreneurial action are related. Likewise, Nouri et al (2018) observed that heuristic influence entrepreneurial behaviour while it also supported entrepreneurs in making decisions despite limited resources.…”

Section: The Key Findingsmentioning

confidence: 97%

Heuristics and optimism - Towards entrepreneurial behaviour and success

Akinbinu

Chiloane-Tsoka

2021

Journal of Contemporary Management

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Purpose of the study: Entrepreneurial behaviour or actions do not exist in a vacuum instead are influenced by different cognitive factors such as heuristics and optimism level inherent in the entrepreneurs. Many scholars have investigated heuristics effect on entrepreneurial decision and process, but the study of heuristics and optimism regarding the behaviour of the entrepreneurs and their business performance are short-lived. Therefore, this study examined the effect of the duo factors (heuristics and optimism) on the behaviour of the entrepreneurs in their journey from the existing enterprises.Design/methodology/approach: A mixed-method was engaged in the data collection and analysis process while the entrepreneurs with the intrapreneurial background are the unit of analysis. Findings:The findings revealed a significant relationship between entrepreneurial behaviour and the selected duo factors (heuristics and optimism) of the entrepreneur. From the qualitative outcomes, many entrepreneurs agreed that both heuristics and optimism are instrumental to their entrepreneurial behaviour or actions and reflected in the individual performances and business successes.Recommendations/value: This paper, however, recommend that entrepreneurs embrace the concept of ''now', 'next' and 'new' for key performance indicator and new business deliverables. Managerial implications:This paper observed that businesses, at the cutting edge of innovation via deliberate learning and new discovery from previous task, thrive and enhance business successes.

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Exploring Positive Outcomes of Decision Making Biases in the Field of Entrepreneurial Marketing

Cited by 8 publications

References 0 publications

The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe

The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe

Exploring decision-making biases among Iranian entrepreneurs: some novel insights

Heuristics and optimism - Towards entrepreneurial behaviour and success

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