The Impact of Friendship on Entrepreneurial Decision-Making: An 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.
This paper is concerned with friendship as it pertains to the practical application of entrepreneurial founding teams whose friendship precedes the venture and did not begin for the purpose of starting the venture. Friendship may have both negative and positive implications for the founding and operation of the entrepreneurial venture, providing for both strengths and weaknesses in the organization. This paper develops a number of researchable propositions, which can be tested and then either accepted, rejected, or extended in empirical work. The methodology connects characteristics of friendship from extant literature to a series of previously identified bias groups which can logically be expected to influence decision-making classified within previously identified stages of entrepreneurial venture development. The product of this work is a series of researchable propositions, as well as managerial implications to consider when entering a venture.
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