An entrepreneur is more susceptible to the use decision making biases and heuristics than are managers in large organizations (Schade, 2007). To understand why entrepreneurs and managers in large organizations may vary in the extent to which they manifest biases and heuristics in their decision making, it is important to understand the utility of nonrational decision making (Schade, 2007). Under conditions of environmental uncertainty and complexity, biases and heuristics can be an effective and efficient guide to decision making (Schade, 2007). In such settings, more comprehensive and cautious decision making is not possible, and biases and heuristics may provide an effective way to approximate the appropriate decisions (Schade, 2007).
The use of heuristics has also been found to be associated with innovativeness (Schade, 2007). Perhaps a critical difference between these sets of individuals is the extent to which they manifest biases and heuristics in their decision making (Schade, 2007). There are several traits and demographic factors, enduring support was found for the way entrepreneurs make decisions (Schade, 2007). We speculate that without the use of biases and heuristics, many entrepreneurial decisions would never be made (Schade, 2007). With entrepreneurial ventures in particular, the window of opportunity would often be gone by the time all the necessary information became available for more rational decision making (Schade, 2007).Additionally, successfully starting a new business usually involves overcoming multiple hurdles (Schade, 2007). Using biases and heuristics as simplifying mechanisms for dealing with these multiple problems may be crucial (Schade, 2007).To face such hurdles from a strict econometric approach would not only postpone decisions, but would in all likelihood make them overwhelming (Schade, 2007). More specifically, overconfidence may be particularly beneficial in implementing a specific decision and persuading others to be enthusiastic about it as well (Schade, 2007).
The use of biases and heuristics may also offer some help in explaining why entrepreneurs sometimes make bad managers (Beamish, 2010).Whereas the use of cognitive biases may be beneficial in some circumstances, it can lead to major errors in others (Beamish, 2010). Although research has yet to establish performance implications, it is possible that the more extensive use of heuristics in strategic decision making maybe a great advantage during the start up years (Beamish, 2010). However, it may also lead to the demise of a business as a firm matures (Beamish, 2010).
In any industry we find that social heuristic collectively constructed and maintained interpretive decision making frames influence economic decision making practices and material outcomes (Beamish, 2010). Social heuristics are widely institutionalized and commonly relied upon to reduce uncertainty in decision making they provide actors with both a priori and ex post facto justifications for economic decisions that appear socially rational (Beamish, 2010).
Let’s say a person in the commercial construction industry, social heuristics sustain market order but also discourage novel technologies and impede innovation (Beamish, 2010). Social heuristics are actor level constructs that reflect macro-level institutional arrangements and networked production relations (Beamish, 2010). The concept of social heuristics offers the promise of developing a genuinely social theory of individual economic choice and action that is historically informed, contextually situated, and neither psychologically or structurally reductionist (Beamish, 2010).
Casual observation suggests that individuals who start their own organizations are
Somehow different from those that work in large organizations (Anderson E 2003). Entrepreneurs have been described as risk-takers and rugged individualists as engaging in deviate social behavior and as being a "breed apart" (Anderson E 2003). In contrast, managers in large organizations have been described as being risk averse adhering to broadly accepted norms of behavior and more professional and predictable in their decision making (Anderson E 2003). For each decision there is a risk (Anderson E 2003). The risk actually occurs when you exit the comfort dynamic balance in the status quo situation (Anderson E 2003).And each decision and action hit directly in the comfortable position for you as an entrepreneur (Anderson E 2003). Because of that the risk is ingredient part of the whole process (Anderson E 2003).
A lot of scholars have recognized that managerial decision making often falls short of the purely rational model (Anderson E 2003).Several factors that prevent purely rational decision making have been cited, including (Anderson E 2003). First the high costs of such decision making efforts and second the information processing limits of decision makers (Anderson E 2003).Third the differences in decision making procedures adopted by managers and last the differences in the values of decision makers (Anderson E 2003). One of the most important classes of models that explain deviations from rational decision making focuses on biases and heuristics (Anderson E 2003). Biases and heuristics are decision rules, cognitive mechanisms, and subjective opinions people use to assist in making decisions (Anderson E 2003). Frequently, the use of biases and heuristics yields acceptable solutions to problems for individuals in an effective and efficient manner (Anderson E 2003).
Like with any business entrepreneur faces a series of challenges (Branson, 2012). Some challenges they may not be able to control, such as the legal limitations or not having all of the time and money they would like to dedicate to business (Branson, 2012). The best way to deal with obstacles like these is to have the information that is need to be prepared (Branson, 2012). Then entrepreneur can look for ways to turn the situation into an opportunity, through finding a unique solution or drawing on support from other people (Branson, 2012). Other challenges will present entrepreneur with decisions you will have to make (Branson, 2012).Another challenged faced with a choice that draws on own sense of morals, values or ethics (Branson, 2012). An example might be selling a product that they know is of poor quality or even harmful to a community (Branson, 2012). Most good entrepreneurs only make three or four key decisions every year (Branson, 2012). Running a business's day-to-day operations and managing your team can take much of their time, so there are usually only a few that stands out the game changing decisions that can make or sometimes break a business (Branson, 2012). An entrepreneurs job is to lead there team in the search for the best solutions, which are not always the easiest ones (Branson, 2012).
As an entrepreneur decides about action on a way of full action implementation (Gibcus, 2003).This is the most important element in the action taking process (Gibcus, 2003).This is because if an entrepreneur not decides to take action, the action won’t happen (Gibcus, 2003). The faster is the process of decision making the faster will be the process of overall action taking (Gibcus, 2003). The better is the process of making decision, the better will be implementation of that action (Gibcus, 2003).However, the speed of decision making affecting the quality of the decision (Gibcus, 2003).Because of that you must to optimize the process, if you would like to receive the best results for each action (Gibcus, 2003).When entrepreneur already know what needs to be implemented, they already know the necessary steps for that entrepreneurial action (Gibcus, 2003). However, this sub-process implementation, can also affect the failure of the whole action taking process (Gibcus, 2003). If you don’t implement the decision, there won’t be action (Gibcus, 2003). Once a decision is made to take any type of action, they must implement that decision without additional thinking’s (Gibcus, 2003). Thinking’s are finished in the process of decision making (Gibcus, 2003).
The decision to start a venture based on a new product or service involves making numerous decisions for which there is little or no hard information (Gibcus, 2003). Furthermore, the market's acceptance of the new product or service almost always contains a great deal of uncertainty (Gibcus, 2003). However, efforts by entrepreneurs to reduce their uncertainty in decision making are likely to be very costly and usually not terribly effective (Gibcus, 2003).And yet, decisions still need to be made if the venture is going to be launched or to quickly move forward once the venture has started (Gibcus, 2003).

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