ENTREPRENEURIAL HEURISTICS - A COMPARISON BETWEEN HIGH PI (PIONEERING-INNOVATIVE) AND LOW PI VENTURES

Entrepreneurial heuristics are defined as the thumb-rules guiding the managerial decisions involved in the start-up and management of a new venture. These were identified and rated through the content analysis of 138 published undisguised cases, using the case survey method. Through a similar procedure, scores were also generated on the overall innovativeness of the ventures. Data on these two variables were collected from an additional sample of 26 entrepreneurs for verification purposes. From the final sample of 164, two groups (called the high PI and the low PI) were identified on the basis of their innovativeness scores. Preferred heuristics of these two groups and commonly used heuristics were identified through t-tests. Such heuristics were separately factor analyzed to identify the PI and general entrepreneurial orientations. A regression analysis showed that heuristic orieniations could explain 50% of the variance in innovativeness. It was also found that PI orientations could fairly well discriminate between the high PI and low PI groups with a probability of misclassification of 0.12. The findings may have implications for the selection, training, and promotion of entrepreneurs and new venture projects.