The Impact of Friendship on Entrepreneurial Decision-Making: An Abstract

Abstract

This paper explores the influence of friendship on the relationship between heuristics and biases on decision-making within entrepreneurial founding teams. The research question builds on the recognition that better decision-making promotes venture success. The entrepreneurial environment is characterized by high levels of complexity, ambiguity, and time constraints. By employing heuristic shortcuts, the mind is able to attend to a vastly larger number of decisions in a given space of time than if it were to consciously and deliberately evaluate each and every alternative in the decision-making process. While extant literature in entrepreneurship has begun to focus on the role that heuristics and biases play in shaping the decisions that entrepreneurial teams make, most research has focused on the individual entrepreneur. However, large portion of ventures are founded and led by teams rather than by individuals. Further, most of the literature available on the nature of the entrepreneurial team focuses on how the team functions once it has been established or how a team within a company possesses degrees of entrepreneurial orientation.