Entrepreneurs and strategic decisions - Slide 6 MODULE 1

Slide 1

Entrepreneurs and Strategic Decisions

Slide 2

Objectives

• Discuss the fundamental elements of entrepreneurial decision-making
• Connect cognition to the entrepreneurial process
• Examine strategic decision-making as a unique and significant tasks for entrepreneurs

Slide 3

Decision making is a cognitive process.

• Cognitive = Thinking
• Cognition involves individual decision-making involving the selection of a specific course of action that is supposed to bring a certain result.
• Decision-making implies choice.
• Alternative are available is a decision exists.
• Exact outcomes are unknown, albeit estimated.

Slide 4

Strategic decisions typically share the same process.

1. Recognizing a problem situation
2. Generating alternatives
3. Evaluating the various alternatives
4. Selecting the alternative that best satisfies our evaluation criteria

Slide 5

Study of entrepreneurial decision-making leads to better decisions.

• Decisions of entrepreneurs differ from company managers
• Operate with limited information
• Must be action-oriented and decisive
• Accept risk
• Involve major consequences

Slide 6

Decision-making is a strategic activity.

• Setting specific courses of action to reach strategic goals.
• Revenue and profit goals
• Market share and competitive advantage
• Product superiority and technical advantage
• Strategic decisions involve critical analysis, resource investment, and company commitment.

Slide 7

Strategic decisions share four fundamental characteristics.

1. Complexity: facts, variables, and contingencies relevant for the decision at hand
2. Uncertanty: all possible outcomes are not known and are difficult to forecast
3. Rationality: a specific goal is intended by making a decision
4. Control: intentional and deliberate actions are made by decision-makers

Slide 8

Environment of entrepreneurs is uniquely challenging.

Slide 9

Environment of entrepreneurs is uniquely challenging.

Slide 10

Environment of entrepreneurs is uniquely challenging.

• Entrepreneurs are doing new things.
• Entrepreneurs are without the resources and relationships typical of established companies.
• Uncertainty and complexity levels are high.
• Consequences of failed decisions include failed business, significant financial and emotional pain.

Slide 11

Summary

• Understanding entrepreneurial decision-making critically important for earliest stages
• Without opportunity discovery, there's no venture
• Decision-making is a unique and significant tasks for entrepreneurs
• riquires quick, high-stakes decisions with incomplete information in dynamic market