MCMULLEN SHEPHERD Entrepreneurial Act

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஽ Academy of Management Review 2006, Vol. 31, No. 1, 132–152. ENTREPRENEURIAL ACTION AND THE ROLE OF UNCERTAINTY IN THE THEORY OF THE ENTREPRENEUR JEFFERY S. MCMULLEN Baylor University DEAN A. SHEPHERD Indiana University By considering the amount of uncertainty perceived and the willingness to bear uncertainty concomitantly, we provide a more complete conceptual model of entrepreneurial action that allows for examination of entrepreneurial action at the individual level of analysis while remaining consistent with a rich legacy of system-level theories of the entrepreneur. Our model not only exposes limitations of existing theories of entrepreneurial action but also contributes to a deeper understanding of important conceptual issues, such…show more content…
However, the role this uncertainty plays in preventing entrepreneurial action has remained a matter of debate. As a result, two research streams have emerged, each inspired by alternative conceptualizations of uncertainty. The first stream focuses on the amount of uncertainty perceived and frequently discriminates those who decide to act entrepreneurially from those who do not as a matter of differences in knowledge (e.g., Busenitz, 1996; Gaglio & Katz, 2001; Kaish & Gilad, 1991; Kirzner, 1979). Thus, the amount of uncertainty is considered to be the barrier between prospective entrepreneurs and entrepreneurial action. The second stream highlights the willingness to bear uncertainty and typically proposes that those who decide to act entrepreneurially are distinguishable from those who do not owing to differences in motivation, attitude, or risk propensity (e.g., Douglas & Shepherd, 2000; Knight, 1921; Schumpeter, 1934). In this scenario, an unwillingness to bear uncertainty is deemed responsible for preventing prospective entrepreneurs from engaging in entrepreneurial action. Because an individual must ultimately act to become an entrepreneur, and because action involves knowledge and motivation (Higgins & Kruglanski, 2000), we propose that each stream merely emphasizes a different aspect of the uncertainty experienced in the decision to act entrepreneurially.

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