Different thinking or similar models: do entrepreneurs and franchisees apply the same decision-making models prior to establishing a company?
by Galit Klein
J. for International Business and Entrepreneurship Development (JIBED), Vol. 9, No. 3, 2016

Abstract: This study examines the (dis)similarities between franchisees' and entrepreneurs' decision-making models, and how satisfied they are with their decisions. Based on decision-making theories, the study examines whether entrepreneurs and franchisees use the same decision-making model, rational or intuition, in the first stages of establishing a firm. One hundred and forty-one subjects responded to a questionnaire, of whom 70 owned a business (i.e., were independent entrepreneurs), and 71 were franchisees. The results of the study indicate that the two groups used different models during the pre-establishment stage. Entrepreneurs tended to behave more intuitively, deciding to become self-employed based on their hunches. Nevertheless, after deciding on the form of business, both groups engaged in rational decision-making throughout the stages of establishing their business. Differences were also found in the preparations made by the two groups, indicating that entrepreneurs felt less secure in their choice compared with franchisees. The franchisees were also more satisfied with the decision to become self-employed. The results thus suggest that entrepreneurs and franchisees are not just diversified in their form of organisation; they also employ different types of cognitive decision-making during the first stage of becoming independent.

Online publication date: Thu, 14-Jul-2016

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