Entrepreneurial Opportunity Evaluation Research Articles

An Opportunity for Me? The Role of Resources in Opportunity Evaluation Decisions

abstractWe apply the prescriptions of the resource‐based perspective to develop a model of entrepreneurial opportunity evaluation. We propose that opportunity evaluation decision policies are constructed as future‐oriented, cognitive representations of ‘what will be’, assuming one were to exploit the opportunity under evaluation. These cognitive representations incorporate both (1) an evaluation of the existing resource endowments (already under the control of the venture), which may be employed to exploit the opportunity under evaluation, and at the same time (2) an assessment of the future, wealth generating resources that must be marshalled (and subsequently under the control of the venture) in order to exploit the opportunity under evaluation. We empirically test this model using conjoint analysis and hierarchical linear modelling techniques to decompose more than 2300 opportunity evaluation decisions nested in a sample of 73 entrepreneurs. Our findings suggest that entrepreneurs are attracted to opportunities that are complementary to their existing knowledge resources; however, we also identify a set of opportunity‐specific and firm‐specific conditions that encourage entrepreneurs to pursue the acquisition and control of resources that are inconsistent with the existing, knowledge‐based resources of the venture. We identify these conditions and discuss implications for theory, practice, and future research.

Self‐regulation and decision heuristics in entrepreneurial opportunity evaluation and exploitation

PurposeThe paper seeks to explore the role of self‐regulation in the use of decision heuristics by entrepreneurs.Design/methodology/approachAn exploratory mixed‐methods study incorporating qualitative and quantitative data, and generating propositions to guide future research and practice.FindingsThe findings suggest that entrepreneurs use heuristics frequently in relation to the evaluation of opportunities, but rely on more systematic decision means during the exploitation phase. In addition, entrepreneurs appear to employ heuristics in an effective fashion by using skills of self‐regulation. This finding questions widespread assumptions about the inherent bias and cognitive errors associated with this type of entrepreneurial decision‐making.Research limitations/implicationsBeing an exploratory study of a relatively small sample, the findings are tentative and not generalized to a wider population. However, the study implies that future researchers should explore these topics in greater depth.Practical implicationsSelf‐regulatory skills can be primed and enhanced using systematic interventions and the study suggests that these techniques could be used to improve the education and management of heuristic decision making by entrepreneurs.Originality/valueThis study is one of the first to explore the complex role played by self‐regulation in the use of heuristics by entrepreneurs, and also one of the first to explore the conditions surrounding the use of specific decision heuristics. The study also adopts an original approach by assuming that heuristics may be effective and rational decision means.