Decision Making: Vital Component to Entrepreneurship

Decision Making: Vital Component to Entrepreneurship

Decision Making in Entrepreneurship

The decision involves a choice on the basis of information previously treated. It is therefore decide to select an action among a set of possible actions made on the basis of assumptions (changes in demand, the commodity prices, the strategy of competitors etc.) or based on expectations (future changes in taxation, labor law or employment law) (Fitzgerald, 2002). The decision aims to choose a target and select the means to achieve given the many contingency factors (level of decision making, leadership style, time horizon, corporate culture). The decision is a rational act that opposes a random act, due to chance. The decision is a process involving three successive stages:

The perception of a problem to solve,

Detection of different solutions to the problem,

The choice of the solution (i.e. a comparison)

The decision of the manager is also related to the nature of the surrounding of the firm at its own personality, and the inclusion of the time. The environment is a contingent factor that represents a set of constraints (technological, financial, economic and competitive) hanging over the head (and thus may pose threats to the company), but that this same officer seeks to use the advantage of the company (by turning them into opportunities). In this context the decision is related to the size of the company and its competitive position in the market, the evolution of it (expansion or stagnation), the degree of importance of financial logic given by owners (short-term profitability or investment strategy over the medium term), and the maneuvers of competition (commercial or technological innovations, pricing strategy, alliances) in a context characterized by the growing influence of the globalization of markets (Gladwell, 2005). The personality of the leader is involved in decision making given his ...