As defined within the core concepts, strategic decision making is the process of allocating organizational resources in order to reach organizational goals, when information is scarce and variables and contingencies involved are highly complex. A consistent body of literature has explored the personal attributes and characteristics that impact on decision-making effectiveness, and several attitudinal (for example risk taking), motivational (for example self-esteem), emotional (for example anticipated affect) and cognitive (for example heuristics and biases) factors have been demonstrated to impact on the way people decide (Vermeulen & Curşeu, 2008). Entrepreneurial strategic decision making has all the characteristics of the strategic decision making process with the difference that the decision-maker is either an entrepreneur or a small-business owner (Vermeulen & Curşeu, 2008). They further state that there are four important psychological factors involved in entrepreneurial strategic decision making; risk propensity, entrepreneurial motivation, cognitive heuristics and emotions. Vermeulen and Curşeu (2008) state that the differences between entrepreneurs and managers can be traced back to differences in the way they process information.
Uncertainty is an important concept inherent in making strategic decisions. In contrast to managers, entrepreneurs have been described as risk seekers, less likely to adhere to established norms of behaviour, and less predictable in their decision-making (Busenitz & Barney, 1997:10). Risk propensity is an attitudinal component referring to an individual's tendency to take risks in his/her actions that varies across distinct decision contexts (Vermeulen & Curşeu, 2008). Entrepreneurial strategic decision making situations involve a considerable amount of risk and as a consequence, these 'risky decisions are not based exclusively on rational calculations but are also affected by individual...