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Decision to Buy a Business in Urban Entrepreneurship: A Process Perspective and Contextual Influence by Edwin Lee, Theresa Lau and K.F. Chan _______________________________________ This paper examines the decision making process of buying a business in urban entrepreneurship. A conceptual framework is developed to explain the buying behavior with reference to strategic decision making process. The: rational, emotional and dependent decision making process is hypothesized to relate to decision outcome of buying a business. When making a strategic decision which involves a large amount of money, other contextual factors also affect one’s decision. Among them, economic environment, relevant experience and investment budget are of…show more content…
They often act very quickly to exploit brief window of opportunity (Carter, Gartner, & Reynolds, 1996). Extensive data collections, analyses to calculate risk probabilities and to choose among alternatives are generally too time-consuming (Shapira, 1995) and therefore would lead to the decision of “not buy.” Rational decision making process includes elements like choosing among best alternatives (Vroom, 1964), bounded rationality (Simon, 1947, 1955, 1983), and entrepreneurial self-efficacy (Chen, et al., 1998). Rational decision making processes require a lot of time for consideration (Pacini and Epstein, 1999, Pfeffer and Jeffrey, 1992). Busenitz and Barney (1997) 3 also state that rational decision making requires more time to process the information as compared with heuristic approach that simplifies and speeds up the decision in a risky environment. Such decision making process may delay or result in no buying decision. Dependent decision is more concerned with establishing constraints and preferences of those involved in and affected by the decision (Pfeffer and Jeffrey 1992), and it is reliant upon the direction and support of others. According to Global Entrepreneurship Monitor Hong Kong (GEM HK) 2007, it is a common but mistaken myth that 90 percent of the new businesses fail in the first year. Although such believe is grossly exaggerated, it is somewhat supported. Brian Headd,

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