Session 168

Uncertainty, Ambiguity, and Sense-Making

Track K

Date: Tuesday, October 9, 2012


Time: 17:30 – 18:45

Common Ground

Room: Terrace 1


  • Fredrik Tell, Uppsala University

Title: Entrepreneurial Action as a 3-Legged Stool: Uncertainty, Entrepreneurship and Intersubjective Knowledge


  • William Forster, Lehigh University
  • Jeffrey York, University of Colorado Boulder

Abstract: Uncertainty is a central construct in entrepreneurship and yet the determinants of the uncertainty an entrepreneur perceives remain largely unexplored. By leveraging the philosophical distinction between subjective, objective, and intersubjective knowledge we theorize how differing types of knowledge (or lack thereof) influence entrepreneurs’ perceptions of both state and response uncertainty. We then develop and test a model showing how the relationships formed by entrepreneurs early in the new venture creation process impact the uncertainty they perceive in their environments. Our study offers one of the only empirical examinations of the perception of uncertainty in the process of new venture creation and extends our understanding of the role stakeholder interaction plays in entrepreneurship.

Title: Entrepreneurial Choice under Ambiguity and the Impact of the Overconfidence Bias


  • Anisa Shyti, IE Business School

Abstract: The aim of this study is to investigate entrepreneurial behavior under ambiguity and assess the impact of overconfidence. Overconfidence, as a psychological bias, may provide further explanations on entrepreneurial choice. Risk and ambiguity attitudes may also explain entrepreneurial choice. Both ambiguity and overconfidence may contribute to the probabilistic perceptions of decision makers. Through a laboratory experiment we intend to disentangle the impact of overconfidence and ambiguity preferences on probabilistic perception. Our theoretical framework builds on Prospect Theory with an additional parameter for ambiguity preferences (Kahneman & Tversky, 1979; Budescu et al.2002). We prime participants with overconfidence as in Moore & Healy (2008), before the choice task. We find a significant overconfidence effect on ambiguity attitudes. Our participants are Executive MBA students in the Entrepreneurship track.

Title: Managing Ambiguity: Growing a New Business in a Nascent Industry


  • Tiona Zuzul, London Business School
  • Amy Edmondson, Harvard University

Abstract: This paper reports on a field study on the growth of a new company in the nascent sustainable cities industry. We examine how the company attracted a growing number of employees, despite constrained resources and the high ambiguity inherent in very early phases of a nascent industry. Our qualitative data reveal that the company’s CEO engaged in a symbolic process of ambiguity management. By signaling legitimacy, crafting aspirational stories, and communicating certainty, the CEO compelled more than 70 individuals to join the new company. By illuminating the growth of an entrepreneurial organization in a nascent industry, we contribute to literature on symbolic entrepreneurship, entrepreneurial growth, and nascent industries.

Title: Recursive Pluralism: A New Approach to Studying Strategic Rents


  • Sai Yayavaram, Indian Institute of Management Bangalore

Abstract: The core strategy question of “How do firms earn rents?” can be answered in many ways by using different theoretical perspectives such as the industry-structure view, the resources view, the innovation view, the relational view, the transactions view, and the institutional view. In this paper we present a recursive pluralistic approach, which is a novel way to integrate these different perspectives. The key idea is that any single way of earning rents (say, earning monopoly rents as per the industry-structure view) can in turn be analyzed by using all the other theoretical perspectives. Such a recursive approach has the potential to generate a more comprehensive view of how firms earn rents and also help us in identifying potential research opportunities.

Title: Selling Out or Selling In? Sensemaking in the Sale of Social Ventures


  • Yolanda Sarason, Colorado State University
  • Thomas Dean, Colorado State University
  • Dawn DeTienne, Colorado State University

Abstract: Social entrepreneurship can be distinguished from entrepreneurship by the prioritization of the generation of social wealth or value over the generation of financial gain. We have little understanding of the tension created between a company’s social mission and the pressure to create financial wealth. This qualitative investigation explores how social entrepreneurs make sense of their social pursuits when their organizations are sold to multinational corporations. There is evidence that social entrepreneurs construct understandings of their social mission in the sale of their company along a continuum from abandonment (selling out), through preservation, to expansion (selling in). Our results provide evidence that social entrepreneurs enact new mental models and take actions that may expand their social missions through the sale of social ventures.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 126: Entrepreneurship & Stakeholders - The Future Research Agenda
Sun: 09:30 – 10:45
Session 127: Teaching Strategic Entrepreneurship
Sun: 11:15 – 12:30
Session 128: Poverty, Informal Firms & Strategic Entrepreneurship
Sun: 15:15 – 16:30
Session 157: Financing Entrepreneurial Ventures
Session 161: Entrepreneurial Growth
Mon: 08:00 – 09:15
Session 158: Corporate Venture Capital
Session 175: Austrian Economics & Creative Destruction
Mon: 09:30 – 10:45
Session 178: Institutional Theory & New Ventures
Session 180: Pushing the Bounds of Agency Theory
Mon: 13:30 – 14:45
Session 159: Exploration, Exploitation, and Ambidexterity
Session 169: Spinoffs, Spinouts, and Labor Mobility
Mon: 16:30 – 17:45
Session 162: New Venture Strategy & Innovation
Session 163: Cognitive Perspectives
Tue: 08:00 – 09:15
Session 164: IPOs
Session 170: Emerging Markets
Tue: 11:00 – 12:15
Session 160: Corporate Venturing and Intrapreneurship
Session 179: Social Networks within and across Firms
Tue: 14:15 – 15:30
Session 166: Institutional Aspects of Entrepreneurship
Session 167: Firm Boundaries
Tue: 15:45 – 17:00
Session 174: Social Networks & Entrepreneurship
Session 176: Value Capture & Appropriability
Tue: 17:30 – 18:45
Session 168: Uncertainty, Ambiguity, and Sense-Making
Session 173: New Venture Creation

Strategic Management Society