Entrepreneurial Decision Making - Research Paper Example

Entrepreneurial Decision Making No one can repudiate the fact that decision making is extremely vital for entrepreneurship. What is decision making? Hornby (2000) describes it as, the act of careful thinking about available possibilities and choosing one of them. Entrepreneurship involves establishing and running a new business venture, and this entails a lot of risk taking. Therefore, in the process of decision making, great caution should be taken to ensure that the most appropriate choice is made to effectively and efficiently achieve the desired goals of the business.

The careful thought entails critical analysis of each of the available choices; analyzing both the long-term and short-term costs and benefits of every option, and deciding on the most suitable one. Since the decisions made are very critical and determines whether a business stands or collapses, it is necessary for entrepreneurs not to be hasty in the process. There should be a systematic procedure to be adhered to in the course of decision making. According to Entrepreneurshipatease.com (2010), there are four steps for quality decision making: alternatives, consequences, information and plan.

In decision making there are varieties of alternatives, which the entrepreneurs may choose from. The main aim of a business is profit maximization and capital growth. An entrepreneur has to do proper calculations to ensure the realization of these key goals. It requires in-depth reasoning to choose wisely from the available alternatives or options. Sabrina (2011) documents two methods of reasoning that an entrepreneur can adopt in the process of decision making; traditional and effectual. Traditional reasoning involves setting goals and working diligently towards meeting them while effectual reasoning involves creating effect through evaluating how to use one’s strengths and resources in for entrepreneurial decision making (Sabrina 2011).

Information is power; an entrepreneur should have adequate and extensive information about the available alternatives to enable settling on the best choice. In the course of decision making, plans should be underway to ensure that any eventuality is tactfully dealt with. Each choice made is prone to costs and benefits. The entrepreneur must conduct a cost and benefit analysis to settle on choice with overwhelming benefits. It does not necessarily mean that if an entrepreneurial decision has numerous benefits, then it has no consequences.

Consequences often exist, some of which an entrepreneur may not have thought about. It is necessary for an entrepreneur to predict the progress of the business through proper planning. The contingencies that may arise are also planned for, so that when they arise the entrepreneur is able to handle them appropriately to ensure growth and profit maximization of the business. The world is comprised of huge numbers of unemployed people, hence high poverty rates especially in the developing countries.

The unemployed population through enablement by their various governments may venture into self employment to reduce dependency ratio. For instance, starting and running kiosks, groceries and artisan shops. This will shape the political agenda of a nation since the government and those seeking elective posts will lure voters by promising to support entrepreneurial development. It would also affect legal and regulatory issues since authorities would formulate and enact laws that favor entrepreneurship geared towards curbing the unemployment menace and subsequently alleviating poverty.

Entrepreneurship is a vital tool for curbing the unemployment rates in any country. Entrepreneurship is all about risk taking and decision making. Failure to take risks may endanger societal business development. One implemented project is more valuable than one thousand plans in the mind. People should therefore endeavor to establish and operate businesses in a bid to deal with the problem of unemployment and poverty. People must be daring to take risks and make the most appropriate decisions to ensure profit maximization and business development.

Authorities should provide favorable political, legal and social environment for entrepreneurial development. References Entrepreneurshipatease.com. (2010). How Entrepreneur Make Decision? Are They Different? (Part 1) Retrieved From http://entrepreneurshipatease.com/blog/?p=620 Hornby, A.S. (2000).

Oxford Advanced Learners’ Dictionary of Current English. New York: Oxford University Press. Sabrina. (2011). How do expert entrepreneurs make decisions? Ecentre.org. Retrieved From http://www.ecentre.org.nz/blog/2011/10/14/how-do-expert-entrepreneurs-make-decisions/