Inspired or Foolhardy: Sensemaking, Confidence and Entrepreneurs’ Decision-Making

Abstract

The purpose of this paper is to investigate the role of confidence in how both new and experienced entrepreneurs interpret and make sense of their business environment to inform decision-making. We illustrate our conceptual arguments with descriptive results from a large-scale (n 6289) survey on entrepreneurs' perception of business performance and their decisions taken at a time of uncertainty in an economic downturn. Quantitative findings are stratified along experiential lines to explore heterogeneity in entrepreneurial decision-making and directly inform our conceptual arguments, while qualitative data from open questions are used to explain the role of confidence. Newer entrepreneurs are found to be more optimistic in the face of environmental risk, which impacts on their decision-making and innovative capabilities. However, the more experienced entrepreneurs warily maintain margin and restructure to adapt to environmental changes. Instead of looking directly at the confidence of individuals, we show how confidence impacts sensemaking, and ultimately, decision-making. These insights inform research on the behaviour of novice and experienced entrepreneurs in relation to innovative business activities. Specifically, blanket assumptions on the role of confidence may be misplaced as its impact changes with experience to alter how entrepreneurs make sense of their environment.

Cultures and entrepreneurial competencies; ethnic propensities and performance in Malaysia

“…Moreover, Barringer and Ireland (2019) suggest different ethnic groups may have different abilities, but we argue this may also be a cultural artefact. What counts as an appropriate ability is socially constructed (Cunningham and Anderson, 2018). Accordingly, looking at ethnic differences in competencies and performances should be illuminating.…”

More popular, more listings? Effects of popularity on Airbnb host expansion

“…In general, considering nascent entrepreneurs are more flexible than experienced ones, they are more likely to find new opportunities and have better learning ability and adaptability (Cunningham and Anderson, 2018). Thus, when the entrepreneurial entry speed is faster and managerial seniority is low, the host has a more urgent attitude to accumulate new knowledge and resources quickly, as well as the positive attitude to spot opportunities in the market, learn and adapt to change (Salavou and Lioukas, 2019).…”

Sensemaking of environmental commitment: a socio-historical contextualization of post-Soviet managers’ views

“…Although earlier research on sensemaking tended to be mainly qualitative in nature, applying quantitative research methods has recently emerged as a potential approach in this context due to studies, for instance, on the role of cue utilization in sensemaking (Gacasan & Wiggins, 2017) and on the role of sensemaking in sustainability accounting (Al-Abrrow et al, 2019). Recent studies (e.g., Cunningham & Anderson, 2018) have also showed how the sensemaking approach can be incorporated into mixed methods studies that can account for decision-making types in management and entrepreneurship. Therefore, although such approaches were not the focus of the present study, we suggest that future studies could aim to quantify sensemaking in line with, for instance, different types of environmental commitment.…”