This paper studies the effects of training entrepreneurs in low-income countries to apply different approaches to strategic decision-making under uncertainty on their subjective perceptions of ability to cope with different challenges that can affect the development of new ventures.
Entrepreneurs in low-income countries operate under extreme uncertainty and resource constraints. However, interventions to help them cope with the various challenges they face as they grow new ventures are largely limited to short courses on basic business skills. Conversely, the authors of this study use a field experiment with entrepreneurs in three regions of Tanzania to show that strategy-based training has important effects on their perceived ability to cope with different sources of uncertainty that can hinder the development of new ventures. The study’s findings suggest that training entrepreneurs in low-income countries to apply a theory-based approach to strategic decision-making increases their perceived ability to deal with uncertainty stemming from the development of a viable business model, and that this can have positive implications for business outcomes. In the paper, the authors elaborate on the mechanisms behind these results and discuss the implications for current and future research.
