Decision-Making Flashcards
5 Aspects of Decision Making in the Entrepreneurial context
- High Uncertainty
- Time Pressure
- Emotional Intensity
- Ambiguity
- Consequential Extreme
Risk
When the probability of an outcome is possible to calculate or knowable
Uncertainty
when the probability of an outcome is not possible to determine or is unknowable
Describe S.M.A.R.T. Goal Setting
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Action planning
Goals need to be broken down into sub-goals and plans for how to achieve them
- Goal Intention
“I intend to achieve x” - Implementation Intention
“when situation Y arises I will do Z”
Four Principles of effectual decision-making
- Principle: Start with your own Resources
- Principle: Affordable Loss
- Principle: Form Partnerships
- Principle: Leverage Surprise
Explain Effectuation
The basis for decisions and new opportunities;
Who am I? What do I know? Who do I know?
Unique resources drive unique ideas;
e.g. Steve Jobs calligraphy knowledge
Advantages of being Resource-Driven (4)
- Not chasing investors
- Not waiting for the perfect opportunity
- Working on own strengths
- Forcing yourself to be creative with fewer resources
Principle of Affordable Loss
Step 1: Assess what you really need in order to start
Step 2: Assess what you can afford- and are willing to lose
Principle of Forming Partnerships
- Each stakeholder brings new means for the venture
- Each stakeholder only invests what they can afford to lose
- Cost of the venture are shared
Principle of Leveraging Surprise (Effectuation)
Surprises and even failures can lead to new
opportunities
Lemonade Principle
The unexpected is not a cost but a resource
Surprises Can provide new information for new opportunities
