From Knightian uncertainty to real‐structuredness: Further opening the judgment black box

Abstract

AbstractResearch SummaryEntrepreneurial judgment remains a concept that resembles a black box. This article attempts to further open that black box by developing a dimensionalization of types of judgment. To achieve this, it joins recent efforts to explicitly link entrepreneurship to Simonian themes by integrating the notion of decision problem structures into the judgment‐based approach (JBA) to entrepreneurship. This article proposes a more comprehensive and nuanced approach to judgment in the face of decision problems we label “real‐structured.” Extending the JBA comes with several important implications: It uncovers additional entrepreneurial knowledge problems, provides new insights for both economic organization and judgment communicability, and informs research on entrepreneurial success and failure. It also sheds new light on the controversy over the relationship between effectuation and judgment.Managerial SummaryWhen taking decisions, entrepreneurs cannot know how the future will pan out. Those decisions are made under conditions of uncertainty and only time will tell whether they prove astute or otherwise. The uncertainty of the future leads entrepreneurs to exercise judgment based on their individual beliefs and to act accordingly. The components of that entrepreneurial judgment remain rather underexplored. The purpose of this article is to dig deeper into, and thereby improve, the understanding of entrepreneurial judgment. The main result of this article is a four‐part dimensionalization of judgment, covering entrepreneurial (sub‐)judgments on the effects incurred by action, the appraisal of action alternatives, the goals underlying action, and resolving the decision problem.