Appeared on May 2, 2009
Management Professor and Associate Dean for Strategic Initiatives Donna DeCarolis, Ph.D., discussed self efficacy and overconfidence in entrepreneurs and how this can lead to a decrease in performance for a new company, for her business commentary. Self efficacy and overconfidence are main factors in deciding to start a business and normally is assumed will lead to better performance but research have shown that it is the opposite. This is commonly seen in industries that are dynamic and uncertain since entrepreneurs have unrealistic assessments and expectations of what they can accomplish and the outcomes they expect to gain. Entrepreneurs in ambiguous situations need to be more cautious than usual with their behavior and strategies.