Uncertainty Types and Transitions in the Entrepreneurial Process (original) (raw)
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Whether new business ventures emerge in the context of start-ups or corporate giants, one of the enduring and fundamental assumptions underlying theories of entrepreneurial action is that entrepreneurs operate in uncertain environments. And yet, nearly a century since the unveiling of Knightian uncertainty as a precursor to profit-making, the identification, description, and operationalization of uncertainty as a construct continue to exhibit conflicting definitions, tautological measures, and unwitting conflation with more precise constructs along the spectrum of ignorance and unknowingness. The purpose of this study is to review the multiple research streams that together constitute the literature on knowledge problems to identify critical boundary conditions of uncertainty as an analytical construct. Based on this review, we then set forth a multilevel research agenda for exploring entrepreneurial action under conditions of ambiguity, complexity, equivocality, and uncertainty.
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Entrepreneurship research on decision making under uncertainty has focused largely on the effect of uncertainty on the entrepreneur actions while an attempt at the individual level particularly, from the cognitive framework seeks to explain why actions differ. There are growing attempts to characterize what informs actions and decisions on opportunities under uncertainty. Understanding from the thinking process of the entrepreneur asserts a more heuristic and bias framework of actions towards decisions on the opportunity that encompasses complementing personal and cognitive abilities. In this paper, we offer a review of decisions under uncertainty and develop propositions on the complementing role of entrepreneurial personality traits and cognitive abilities towards opportunity decisions under uncertainty. We provide a conceptual basis for a broader perspective on behaviors that motivate or hinder entrepreneurial actions. While positioning the entrepreneur decisions at the core center of decision theory, we also explore how the entrepreneurial decision process under uncertainty differ from the normative reasoning to decision making and the role information play in this process.
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