This study assesses the relationship between an owner's characteristic decisiveness and the performance of his or her business in a sample of small business owners who started new childcare ventures. Decisiveness was found to be positively related to performance. This finding was contrary to expectations of a negative relationship based on prior research related to the effects that the need for cognitive closure have on decision-making processes. One possible explanation for this unexpected result is that often a somewhat intuitive decision-making process is often adequate, particularly for the less complex venture. In such a case, the additional expenditure of time and other resources required to conduct a more normative logic-based decision-making process may result in fewer of these resources being available to the venture once operations have commenced.
Looking Before Leaping: The Effect of Owner Decisiveness On Small Business Performance
INTRODUCTIONThe new venture founder's decisions determine the configuration of that venture. Different configurations will achieve different degrees of fit. Different degrees of fit result in differences in performance (Venkatraman & Prescott, 1990). The accuracy of decisions made to configure the venture depends in great measure on the effectiveness of information gathering, and the analytic procedures applied to that information prior to making those decisions. Therefore, "...gathering information for decision-making is a critical activity for the entrepreneur" (Cooper, Folta & Woo, 1995, p. 108). Many factors can influence the effectiveness of information search and analysis in the decision-making process.Much small business and entrepreneurial research is based on an implicit assumption that the small business owner utilizes logic-based reasoning when making important decisions. However, business decision-making under an assumption of bounded rationality (Simon, 1955; Cyert & March, 1963) has received less research attention (notable exceptions include Cooper et al., 1995, & Busenitz & Barney, 1...