Ambiguity tolerance theory and entrepreneurship

Ambiguity tolerance theory can be traced back to Polish psychologist Else Frenkel-Brunswik, whose work in 1949 focused on authoritarianism and ethnocentrism in children. Ambiguous information is everywhere and it can lead to the conclusion that there is no way out, no way to understand, or no viable way to proceed. The decision-making process can become paralyzed by ambiguity that prevents conclusive prescriptions.

When there exist high levels of uncertainty about a particular entrepreneurial venture, those individuals that exhibit higher levels of tolerance of ambiguity, are more likely to succeed. The ability to tolerate conflicting information and deal with missing information makes the difference.

The more uncertain a particular business opportunity, the more important it is that individuals are capable of tolerating the demands of conflicting information and vague information. We might expect that ventures of traditional business types, like restaurants, might get more consistent information, whereas those in new industries, such as technology companies would have more ambiguous market information.

When entrepreneurs enact strategies to create new businesses, they typically do so without knowing the probability they will succeed. They are not taking risk, they are bearing uncertainty.


There are several other competing and complementary psychological theories that might interest you:


Sources:

Schere, J. L. (1982, August). Tolerance of Ambiguity as a Discriminating Variable Between Entrepreneurs and Managers. In Academy of management proceedings (Vol. 1982, No. 1, pp. 404-408). Academy of Management.

Mac Donald Jr, A. P. (1970). Revised scale for ambiguity tolerance: Reliability and validity. Psychological reports, 26(3), 791-798.

Not a bad intro:

Comments

Post a Comment

Popular posts from this blog

Marshall McLuhan's theory of entrepreneurship

Image
“The crossing or hybridizations of the media release great new  force and energy a s by fission or fusion…” (1964:48).  Marshall McLuhan was a Canadian academic and celebrity who famously coined the phrase “ the medium is the message ” back in the 1960s to express his thesis about the effect of new technologies on culture and society. At a time when critics railed against sex, violence, and blasphemy on vacuum tube televisions, McLuhan claimed that the content of television was irrelevant, as it is the medium of television that really changes us by creating new audio/visual tribes, and seating us passively in front of the tube. New environments! The implication of McLuhan’s theory was that new technologies shape environments and perceptions, by making accessible new dimensions of time and space. He gave the example of the light bulb, which is a medium devoid of any content (or message), yet it creates an environment by its mere presence, illuminating the dark, extending our a...
Read more

Impulsive theory of entrepreneurship

Image
Impulsiveness  refers to taking action without thinking about it first and considering data before deciding. Wiklund et al. (2016) state that "acting without thinking is characterized by rapid decision making in situations that would seem to require extensive analysis and deliberation." They go on to explain that individuals need to act impulsively in some entrepreneurial conditions because it is impossible to complete a throughout analysis due to uncertainty, ambiguity, and urgency. Rather than succumbing to analysis paralysis, entrepreneurs take leaps of faith that most others are not willing to. As it turns out, there is a way to measure impulsivity. Attention deficit and hyper-active disorder (ADHD) is usually considered a problem that need to be addressed. For instance, many parents medicate their children with drugs like Ritalin in order to combat the negative effects of ADHD.  Interestingly, ADHD has been associated with entrepreneurial behaviors. The disorder increase...
Read more

Cultural theory of entrepreneurship

Image
Thomas Cochran (1965) proposed that entrepreneurs are influenced by their own attitudes toward their occupation, and the expectations of groups facilitating new ventures, as well as the difficulty level of the operational requirements of the career. He argues that both attitudes of potential entrepreneurs and the expectations of sanctioning groups are culturally determined. He looked to evidence in historical cases such as the entrepreneurial prominence of Protestants in America , Samurais in Japan , the Yoruba in Nigeria , the Kikuya in Kenya , Christians in Lebanon, the Halai Memon in Pakistan , and the Parsis in India . Each of these cases can be considered interpretations derived from cultural biases. Hofstede (1980) proposed that culture captures the set of values, beliefs and expectations about behaviors that are shared by a social group. Cultural values can be unconscious or conscious, rational or irrational, but either way, they influence the social, political and technological...
Read more