Entrepreneurial judgment as empathic accuracy: a sequential decision-making approach to entrepreneurial action

Jeffery S. McMullen

Journal of Institutional Economics, 2015, vol. 11, issue 3, 651-681

Abstract: Entrepreurship theory within economics has long touted the importance of judgment in entrepreneurial action. More recently, proponents have begun to advocate extension of this work to organization studies. However, critics of entrepreneurial judgment have responded by claiming that the construct is only meaningful post hoc and vapid when examined ex ante. Instead, they claim that, if entrepreneurship theory is to progress, then judgment must be replaced by a process logic known as effectuation. This article examines their claims and redefines the judgment dilemma as one of scope rather than existence. Empathic accuracy is then introduced to offer a means of addressing their criticism without having to deny the existence of entrepreneurial judgment. Empathic accuracy is also shown to be capable of explaining some of the cognitive mechanisms necessary for effectuation and dynamic socio-economic order.

Date: 2015
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