How Does Extreme Uncertainty Affect Entrepreneurial Processes, Actions, and Opportunities?

Alaydi, Sharif; Buck, Trevor; Tang, Yee Kwan

Abstract

Uncertainty is a cornerstone of entrepreneurship theory; however, the exact role it plays in stimulating and/or obstructing entrepreneurial processes, opportunity and action has remained a matter of debate. This study uses two case studies, an indigenous firm and an MNE, of mobile phone providers in Palestine in order to investigate whether extreme uncertainty creates and/or inhibits entrepreneurial opportunities and motivates and/or hinders entrepreneurial processes and actions. A thematic analysis of one indigenous firm case study, with 12 semi-structured interviews, and one MNE case study, with 11 semi-structured interviews, allows us to claim a contribution to the institutional and entrepreneurship literatures. Our analysis finds some evidence of the negative impact of uncertainty, i.e. extreme uncertainty as an inhibitor and disincentive for entrepreneurial processes, actions and opportunities; however, the two phone operators also perceive to some extent uncertainty as a source of opportunities and an incentive for entrepreneurial processes and actions. More importantly, our study reveals a turning point, an inverted U-shape. Beyond a maximum, the previously positive responses of firms to uncertainty may convert into passive or even negative responses. We label this phenomenon as ‘uncertainty overload’. We also confirm the role that psychological factors, especially emotions, may play in determining entrepreneurial actions in this hostile business environment.

Citation

Alaydi, S., Buck, T., & Tang, Y. K. (2020, August). How Does Extreme Uncertainty Affect Entrepreneurial Processes, Actions, and Opportunities?. Presented at 80th Annual Meeting of the Academy of Management (AOM 2020), Online

• Presentation Conference Type: Conference Paper (published)
• Conference Name: 80th Annual Meeting of the Academy of Management (AOM 2020)
• Start Date: Aug 7, 2020
• End Date: Aug 11, 2020
• Acceptance Date: Mar 16, 2020
• Online Publication Date: Jul 29, 2020
• Publication Date: 2020-08
• Deposit Date: Sep 23, 2021
• Publisher: Academy of Management
• Volume: 2020
• Pages: 13768
• Series Title: Academy of Management Proceedings
• Series ISSN: 2151-6561
• Book Title: AOM Annual Meeting Proceedings
• DOI: https://doi.org/10.5465/ambpp.2020.13768abstract
• Public URL: http://researchrepository.napier.ac.uk/Output/2804572