Uncertainty and Competing Goals: Advancing Behavioral Theories of Entrepreneurial Processes and Outcomes

Submission Deadline: July 9, 2023

The global COVID pandemic highlights the significant challenges entrepreneurs and managers must address when dealing with uncertainty, rapidly changing markets, and dynamic technological advances that evolve quickly in complex and unpredictable ways. This observation resonates with many recent calls in the literature to further understand how entrepreneurs and managers simultaneously address the profit opportunities and the unpredictability present in complex decision situations. This is exemplified by Knightian uncertainty (Alvarez & Barney, 2007; Lampter et al., 2020; Feduzi et al, 2021; Hitt et al, 2021; Rindova and Courtney, 2020; Zellweger et al, 2021), where reliable information on available options and their probabilities are not accessible a priori (Knight, 1921). Moreover, the complexity in the decision-making process is further amplified when entrepreneurs and managers seek other goals than profitability. In this case, they might engage in “mixed gambles” involving a dual risk of gains and losses across multiple – often competing – dimensions of wealth for the decision-maker (March & Shapira, 1987; Martin et al., 2013; Wu & Markle, 2008).

In contexts where uncertainty and competing goals overlap, strategic responses would depend not only on existing knowledge, but also on decision-makers’ underlying attitudes toward uncertainty (Rindova & Courtney, 2020). Research applying a socio-cognitive perspective suggests a variety of cognitive and motivational factors that influence strategic choices under uncertainty (e.g., Hodgkinson, et al, 1999; Koudstaal et al., 2016; McMullen & Shepherd, 2006; Rindova & Martin, 2018; Zuzul & Tripsas, 2020). Recent work by Rindova and Courtney (2020), for example, calls for greater attention to the underlying attitudes and values of entrepreneurs in influencing their strategic responses to uncertainty. Likewise, scholars studying family firms – the most common form of business ownership worldwide (Villalonga & Amit, 2020) – have emphasized that under duress and uncertainty, their trade-offs between economic and socio-emotional goals (Gómez-Mejía et al., 2007), drive them to pursue distinctive decisions related to diversification, innovation, growth, internationalization, corporate social responsibility, generational renewal and entrepreneurial exit (e.g., Alessandri et al., 2018; Berrone et al., 2010; Chirico et al., 2020a, b; Chrisman & Patel, 2012; Cruz & Justo, 2017; Eddleston & Mulki, 2021; Fang et al., 2021; Gómez-Mejía et al., 2014, 2018; Kotlar & Sieger, 2019; Kotlar et al., 2018). Social entrepreneurship scholars also recognize the difficult trade-offs entrepreneurs often need to make when seeking to increase their social impact amidst complex and, often, corrupt environments (e.g., Arend, 2020; Nega & Schneider, 2014).

Building on these empirical observations and research trends, we believe that more research is needed to address important theoretical gaps and nuances about how entrepreneurs and managers cope with uncertainty, especially when they have competing goals that go beyond pure profit maximization. The issue of making decisions when multiple and competing goals are present can be fruitfully explored in various entrepreneurial contexts, such as among social entrepreneurs (Bacq & Eddleston, 2018; Short et al., 2009), enterprising families and family businesses (e.g., Chirico et al., 2020a; Cruz & Justo, 2017; Gómez-Mejía et al., 2014), and high-reliability/resilient (Lengnick-Hall, Beck, & Lengnick-Hall, 2011; Weick et al., 1999) and not-for-profit organizations (Valentinov, 2008). In all these (and possibly other) contexts, complex decisions are to be made to deal with multiple goal considerations pertaining to current/future, financial/non-financial, and individual/collective wealth, among others. Understanding how organizations cope with uncertainty while managing these goal trade-offs is needed to advance our understanding of the dilemmas commonly encountered by entrepreneurs and managers and the related actions taken to succeed in complex environments.

The aim of this Special issue is to encourage scholars to advance new theoretical and empirical insights about entrepreneurial decision-making processes and outcomes in complex environments under conditions of uncertainty and competing goals. Accordingly, a wide repertoire of behavioral theories should be considered to further develop and enrich current understanding of entrepreneurial processes and outcomes. For instance, the mixed gamble concept has recently emerged as a powerful lens to explicate complex decisions in contexts that are hard to make sense of and decide upon (e.g., Bromiley, 2009, 2010; Gómez-Mejía et al., 2014; Hoskisson et al., 2017; Nalick et al., 2020). Also, the concept of Knightian uncertainty has been used to address situations in which neither outcomes nor their probabilities can be estimated ex ante (Arikan et al., 2020; Alvarez and Barney, 2007; Knight, 1921). Real options theory is another theoretical tool for helping managers and entrepreneurs deal with decision-making under uncertainty to enhance strategic flexibility (McGrath, 1997; McGrath & MacMillan, 2000; Bowman & Moskowitz, 2001). There has also been research dealing with how biases might distort the rationality of the real options decision approach (Coff & Laverty, 2001; Miller & Shapira, 2003; Adner & Levanthal, 2004). Additionally, scholars rooted in the tradition of the behavioral theory of the firms have started to examine how interrelated and conflicting goals are prioritized and resolved (Gaba & Greve, 2019). Unfortunately, however, these concepts and related models of uncertainty and competing goals have not received adequate attention in the entrepreneurship literature. Moreover, we encourage scholars to use cognitive mental models, such as the “small world representation” (SWR)’ concept that is gaining traction in the behavioral strategy and entrepreneurship literatures (e.g., Feduzi et al, 2021: Csaszar & Levinthal, 2016; Packard et al., 2017).

Entrepreneurial Decisions in the Digital Age

Submission Deadline: September 3, 2023

The present digital age is characterized by the rapid shift from a traditional economy established by the Industrial Revolution to an economy based on digital technologies (Giustiziero et al. 2021). Many economic activities now take place digitally and a vast amount of information and data are made widely available by digital technologies (Karhade and Dong 2021a). Entrepreneurs and entrepreneurial organizations increasingly employ new organizations, organizational designs and business models based on new digital technologies such as AI and digital platforms (Kretschmer and Khashabi, 2020; Oehmichen et al. 2022). The new organizing principles they engender (e.g., data-driven decision making and meta-organizational forms) (Cennamo et al. 2020; Kretschmer et al. 2022) can likewise empower entrepreneurial activities and decisions originating from entrepreneurs’ subjective judgment (Foss and Klein, 2012).

Interestingly, digital technologies may become tools that reduce information asymmetries and consequently moral hazard between stakeholders and entrepreneurs (Chakravarty et al. 2021), unlocking innovation potential (Karhade and Dong 2021b). However, digital technologies can also constrain innovation and entrepreneurial initiatives towards specific paths. For instance, digital platforms leverage their extensive API tools, interfaces, add-ons and governance rules to shape the innovation effort and activities of their ecosystem participants towards directions that are aligned with the platform firm’s strategic objectives (Cennamo 2021; Jacobides et al. 2018), constraining what these actors can do. There is a need to extend our understanding about how new technological resources (e.g., AI and digital platforms) adopted within the organization and/or leveraged through other organizations affect the quality and scope of entrepreneurial decisions.