When do Entrepreneurs Benefit from Acting like Scientists? Strategic Choice Commitment, Uncertainty and Performance

Abstract

RESEARCH SUMMARY: This study abductively investigates how a firm’s degree of business model development –the extent to which its strategic choices are crystallized—moderates the impact of a scientific approach to decision-making on performance. We present findings from a field experiment involving 261 entrepreneurs, where treated entrepreneurs learn to apply a scientific approach, while control counterparts receive comparable content without this approach. Treated entrepreneurs at a higher degree of busi-ness model development elaborated their theories of value focusing on lower-level choices, leading to superior economic performance compared to control firms. Conversely, treated entrepreneurs at a lower level of business model development reevaluated fundamental aspects of their business models, resulting in increased epistemic uncertainty and less favorable economic outcomes in the short term compared to controls.

 

MANAGERIAL ABSTRACT: Using a field experiment involving 261 entrepreneurs, we explored how the degree to which their business strategy is already defined can influence the benefits of adopting a scientific approach to decision-making. In the experiment, half of the entrepreneurs were taught to use a scientific approach for making decisions (the treated group), while the others received similar training without the scientific approach (the control group). Our results show that treated entrepreneurs with already defined strategies benefited more, experiencing improved performance even in the short term. Conversely, treated entrepreneurs with strategies still under definition experienced more uncertainty and lower short-term economic performance, as the scientific approach prompted them to reassess and adjust their core strategic decisions.

Keywords: Entrepreneurial Strategy, Experimentation, Field Experiment, Innovation, Value Creation