The value of business planning before start-up — A decision-theoretical perspective |
Abstract:
In this paper we analyze business planning from the perspective of the nascent entrepreneur.
We measure its value for the entrepreneur at the point where he must decide whether or not to
plan, and we contrast our results with empirical studies that compare firms' performance after
market entry. Within a formal decision-theoretical framework we show that the value of
planning is driven by the possibility of evaluating alternative actions and being able to improve
strategies. Before market entry, the main purpose of evaluation is to pursue good and terminate
bad business ideas. We show how the value of planning is determined by the venture under
consideration and how it depends on the quality of planning. Our theoretical model yields
several behavioral and statistical implications that we compare with empirical observations
found in the literature. In particular, we show how our model of rational decision making can
be used to explain important hypotheses and contradictory observations that have fueled the
debate on business planning. |
| Keywords: |
Business plan, Start-ups, Entrepreneurship, Decision Making, Uncertainty |
| Author(s): |
Anne Chwolka , Matthias G. Raith |
| Source: |
Journal of Business Venturing (available at ScienceDirect) |
| Subject: |
کارآفرینی |
| Category: |
مقالات ترجمه شده - دانلود ترجمه مقاله |
| Release Date: |
2011 |
| No of Pages: |
12 |
| Price(Tomans): |
0 |
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