The Effects of Strategic Decision Making on Entrepreneurial Self-Efficacy

The influence of strategic decision processes on entrepreneurial self-efficacy (ESE), which measures the degree to which entrepreneurs believe themselves capable of managing new ventures, is examined. Following a general discussion of ESE and of strategic decision processes as determinants of self-efficacy, four hypotheses regarding the relationship between the entrepreneur's ESE level and the firm's strategic decision-making processes are offered. Taken together, the hypotheses suggest that an entrepreneur's ESE level is enhanced by strategic decision-making processes that are decentralized, comprehensive, based on current information, and marked by a high number of external participants.Data from a 1999 survey of 95 new firm founder-managers from New York City's "Silicon Alley" community of Internet ventures are used to test the hypotheses. Although the data support three of the four hypotheses, there is no evidence to suggest that the number of external participants in a firm's strategic decision-making process is positively related to the entrepreneur's ESE level.Implications of the findings, as well as directions for future research, are discussed. (SAA)