On predictive entrepreneurial action in uncertain, ill-structured conditions

Abstract

Decision-making is at the heart of entrepreneurship. Unsurprisingly, entrepreneurship research has engaged with processes of entrepreneurial decision-making resulting, most importantly, in the notions of causation, effectuation, and enactment. Nevertheless, the range of processes delineated to date remains somewhat incomplete. Drawing on crucial insights from the analysis of decision problem structures reveals that entrepreneurship theory has lacked a process that both recognizes the ill-structuredness typically surrounding entrepreneurial decisions and places prognoses center stage. While effectuation implicitly addresses structural defects but denies prognoses a central role, causation emphasizes the importance of predictions while being associated with well-structured, risky environments, and thus, unaffected by structural defects. Theorizing about a combination thereof, that is, a process recognizing and considering the ill-structuredness of entrepreneurial environments yet building on predictions of the future is overdue. This paper, therefore, seeks to foster a more comprehensive yet nuanced understanding of entrepreneurial decision-making processes by outlining the intrinsic features of one such process that we term execution and relating it to existing processes.

Entrepreneurs as Scientists: A Pragmatist Approach to Producing Value Out of Uncertainty

“…We do though concur with Knight's conclusion that coping with uncertainty demands imagination and judgment. However, uncertainty as a concept has played a problematic role in entrepreneurship, as it has led many to conclude that not much can be done in the face of it other than rather blindly explore (Rapp & Olbrich, 2020), and that entrepreneurs must humbly accept this. We take issue with such fatalistic conclusions.…”

Towards a network-based view of effective entrepreneurial ecosystems

“…Entrepreneurial ecosystems represent interdependent actors and factors coordinated to enable productive entrepreneurship within a particular region or territory (Stam and Spigel 2018). Effective entrepreneurial behavior then must transcend beyond network structures (Aarikka-Stenroos and Ritala 2017; Hughes et al 2014;Rapp and Olbrich 2020;Scott et al 2019;Spigel 2017). The coordination of complex social and human behavior is required to generate knowledge necessary for different outputs (Kogut and Zander 1992;Nonaka 1994;Rodan and Galunic 2004).…”

Net Present Value, Duration, and CAPM in Light of Investment Theory: A Comment on Kruk

“…Kruk conveys the impression that entrepreneurial decision problems could-with some assumptions (146, 147) here and there-be solved mathematically. However, in the presence of Knightian uncertainty, decision problems are not well-structured and optimal solutions out of reach (Wilson and Alexis 1962;Adam and Witte 1979;Adam 1983;1996;Rapp and Olbrich 2020) of even the most elaborate math. Rather, entrepreneurs (must) imagine how the future might look and apply judgment to ultimately make their (investment) decisions (Klein 2008;Foss and Klein 2012;Packard, Clark, and Klein 2017).…”