This article develops a theoretical model that suggests that differential levels of uncertainty, knowledge relatedness, and richness of information will have a substantial impact on the decision to engage in entrepreneurship. Effects of the individual differences fear of failure and general self-efficacy are also considered. Using a metric conjoint methodology, respondents are asked to evaluate a series of profiles with different levels of each attribute and then indicate their willingness to invest in an entrepreneurial opportunity. This approach allows for the calculation of main and interaction effects as well as the importance of each factor in the investment decision. Results indicated that all three factors and their interactions play a significant role in the decision to engage in entrepreneurial action. The degree of opportunity-related uncertainty was found to be the most important factor in the decision-making process.
Aiman-Smith, L., Scullen, S., & Barr, S. ( 2002). Conducting studies of decision making in organizational contexts: A tutorial for policy-capturing and other regression based techniques . Organizational Research Methods, 5, 388-414.
2.
Aldrich, H., & Wiedenmayer, G. (1993). From traits to rates: An ecological perspective on organizational foundings. In J. A. Katz, & R. H. Brockhaus, Sr. (Eds.), Advances in entrepreneurship, firm emergence, and growth, volume 1 (pp. 145-195). Greenwich, CT: JAI Press.
3.
Aldrich, H. ( 1999). Organizations evolving. Thousand Oaks, CA: Sage.
4.
Aldrich, H., & Fiol, C. ( 1994). Fools rush in? The institutional context of industry creation. Academy of Management Review, 19, 645-670.
5.
Alvarez, S., & Barney, J. ( 2007). Discovery and creation: Alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1, 11-26.
6.
Arenius, P., & De Clercq, D. ( 2005). A network based approach on opportunity recognition. Small Business Economics, 24, 249-265.
7.
Atkinson, J. ( 1957). Motivational determinants of risk-taking behavior. Psychological Review, 64, 359-372.
8.
Bandura, A. ( 1997). Self-efficacy: The exercise of control. New York: Freeman.
9.
Barbosa, S., Gerhardt, M., & Kickul, J. ( 2007). The role of cognitive style and risk preference on entrepreneurial self-efficacy and entrepreneurial intentions. Journal of Leadership and Organizational Studies, 13, 86-104.
10.
Barney, J. ( 1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120.
11.
Baum, J., & Locke, E. ( 2004). The relation of entrepreneurial traits, skills, and motivation to subsequent venture growth. Journal of Applied Psychology , 89, 587-598.
12.
Birney, R., Burdick, H., & Teevan, R. ( 1969). Fear of failure motivation. New York : Van Nostrand.
13.
Boyd, N., & Vozikis, G. ( 1994). The influence of self-efficacy on the development of entrepreneurial intentions and actions. Entrepreneurship Theory and Practice, 18, 63-77.
14.
Busenitz, L., & Barney, J. ( 1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision making. Journal of Business Venturing, 12, 9-30.
15.
Casson, M. ( 2003). The entrepreneur: An economic theory (2nd ed.). Northampton, MA: Edward Elgar.
16.
Chen, C., Greene, P., & Crick, A. ( 1998). Does entrepreneurial self-efficacy distinguish entrepreneurs from managers? Journal of Business Venturing, 11, 354-359.
17.
Chen, G., & Klimoski, R. ( 2003). The impact of expectations on newcomer performance in teams as mediated by work characteristics, social exchanges, and empowerment . Academy of Management Journal, 46, 591-607.
18.
Choi, Y., & Shepherd, D. ( 2004). Entrepreneurs’ decisions to exploit opportunities . Journal of Management, 30, 377-395.
19.
Companys, Y., & McMullen, J. ( 2006). Strategic entrepreneurs at work: The nature, discovery, and exploitation of entrepreneurial opportunities. Small Business Economics, 28, 301-322.
20.
Conroy, D. ( 2001). Progress in the development of a multidimensional measure of fear of failure: The performance failure appraisal inventory. Anxiety, Stress, and Coping, 14, 431-455.
21.
Daft, R., & Lengel, R. ( 1986). Organizational information requirements, media richness, and structural design. Management Science, 32, 554-571.
22.
Daft, R., Lengel, R., & Trevino, L. ( 1987). Message equivocality, media selection and manager performance: implications for information systems. MIS Quarterly, 11, 355-366.
23.
Dean, T., & McMullen, J. ( 2002). Market failure and entrepreneurial opportunity. Academy of ManagementProceedings, ENT, F1-F6.
24.
Dennis, A., & Kinney, S. ( 1998). Testing media richness theory in the new media: The effects of cues, feedback, and task equivocality. Information Systems Research, 9, 256-274.
25.
Elliot, A., & McGregor, H. (1999). Test anxiety and the hierarchical model of approach and avoidance achievement motivation. Journal of Personality and Social Psychology, 76, 628-644. Finkle, T., & Deeds, D. (2001). Trends in the market for entrepreneurship faculty, 1989-1998. Journal of Business Venturing, 16, 613-630.
26.
Foo, M., Wong, P., & Ong, A. ( 2005). Do others think you have a viable business idea? Team diversity and judges’ evaluations of ideas in a business plan competition . Journal of Business Venturing, 20, 385-402.
27.
Galbraith, J. ( 1977). Organizational design. Reading, MA : Addison-Wesley.
28.
Green, P., & Srinivasan, V. (1978). Conjoint analysis in consumer research: Issues and outlook. Journal of Consumer Research , 5, 103-123.
29.
Gupta, V., & Bhawe, N. ( 2007). The influence of proactive personality and stereotype threat on women’s entrepreneurial intentions. Journal of Leadership and Organizational Studies, 13, 73-85.
30.
Hair, J., Black, W., Babin, B., Anderson, R., & Tatham, R. ( 2006). Multivariate data analysis. Upper Saddle River, NJ: Prentice Hall.
31.
Johannison, B. ( 1990). Economics of overview - Guiding the external growth of small firms. International Small Business Journal, 9, 32-44.
32.
Keegan, W. ( 1974). Multinational scanning: A study of the information sources utilized by headquarters executives in multinational companies. Administrative Science Quarterly, 19, 411-421.
33.
Klein, P. ( 2008). Opportunity discovery, entrepreneurial action, and economic organization. Strategic Entrepreneurship Journal, 2, 175-190.
34.
Knight, F. ( 1921). Risk, uncertainty, and profit. Washington, DC: Beard Books.
35.
Krueger, N. ( 1993). The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability. Entrepreneurship Theory and Practice, 18(1), 5-21.
36.
Krueger, N. ( 2000). The cognitive infrastructure of opportunity emergence . Entrepreneurship Theory and Practice, 24(3), 5-23.
37.
Krueger, N., & Dickson, P. ( 1994). How believing in ourselves increases risk taking: Perceived self-efficacy and opportunity recognition. Decision Sciences , 25, 385-400.
38.
Locke, E., Latham, G., & Erez, M. ( 1988). The determinants of goal commitment. Academy of Management Review, 13, 23-39.
39.
Luszczynska, A., Diehl, M., Gutierrez-Dona, B., Kuusinen, P., & Schwarzer, R. ( 2004). Measuring one component of self-regulation: Attention control in goal pursuit. Personality and Individual Differences , 37, 555-566.
40.
McGrath, R. ( 1999). Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Review, 24, 13-30.
41.
McGregor, H., & Elliot, A. ( 2005). The Shame of Failure: Examining the link between fear of failure and shame. Personality and Social Psychology Bulletin , 31, 218-231.
42.
McMullen, J., & Shepherd, D. ( 2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur. Academy of Management Review , 31, 132-152.
43.
Mitchell, R. ( 2006). Articulating the intuitive: Mechanismsfor entrepreneurs to communicate opportunity evaluation decision policies. Unpublished doctoral dissertation, Indiana University.
44.
Mueller, S., & Thomas, A. ( 2000). A case for comparative entrepreneurship: Assessing the relevance of culture. Journal of International Business Studies , 31, 287-301.
45.
Rauch, A., & Frese, M. ( 2007). Let’s put the person back into entrepreneurship research: A meta-analysis on the relationship between business owners’ personality traits, business creation, and success. European Journal of Work & Organizational Psychology, 16, 353-385.
46.
Romanelli, E. ( 1989). Organization birth and population variety: A community perspective on origins. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior (Vol. 11, pp. 211-246). Greenwich, CT: JAI.
47.
Shaver, K., & Scott, L. ( 1991). Person, process, choice: The psychology of new venture creation. Entrepreneurship Theory and Practice, 16(2): 23-45.
48.
Schumpeter, J. ( 1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Cambridge, MA: Harvard University Press.
49.
Shackle, G.L.S. ( 1979). Imagination and the nature of choice. Edinburgh, Scotland: Edinburgh University Press.
50.
Shane, S. ( 2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11, 449-469.
51.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25, 217-226.
52.
Shepherd, D., & Zacharakis, A. (1999). Conjoint analysis: A new methodological approach for researching the decision policies of venture capitalist . Venture Capitalist, 1, 197-217.
53.
Singh, R., Hills, G., Hybels, R., & Lumpkin, G. ( 1999). Opportunity recognition through social network characteristics of entrepreneurs. In Frontiers in Entrepreneurship Research . Babson College: Wellesley, MA ; http://www.babson.edu/entrep/fer/papers99/X/X_B/X_B.html
54.
Specht, P. ( 1987). Information sources used for strategic planning decisions in small firms. American Journal of Small Business, 11, 21-33.
55.
Speier, C., & Frese, M. ( 1997). Generalized self-efficacy as a mediator and moderator between control complexity at work and personal initiative: A longitudinal study in East Germany. Human Performance, 10, 171-192.
56.
Venkataraman, S. ( 1997). The distinct domain of entrepreneurship research: An editor’s perspective. In Advances in Entrepreneurship, Firm Emergence, and Growth, vol. 3 (pp. 119-138). Greenwich, CT: JAI Press.
57.
Wennekers, S., Thurik, R., Van Stel, A., & Noorderhaven, N. (2007). Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976-2004. Journal of Small Business Economics, 17, 133-160.
58.
Zacharakis, A., & Meyer, G. ( 1997). A lack of insight: Do venture capitalists really understand their own decision process? Journal of Business Venturing , 13, 57-76.
