Objectives

The current Covid-19 pandemic has confronted the hospitality industry with an unprecedented challenge. The corona crisis provides an exceptional platform to further our understanding on how entrepreneurs operate under extreme uncertainty. We adopt an exploratory qualitative approach to study the decision-making heuristics Finnish restaurant entrepreneurs have used during a time of external crisis. More specifically we ask ourselves 1) how do entrepreneurs come to the decisions made, i.e. their decision making heuristics? and 2) what is the underlying logic of that rational?

Prior work

Decision making in the context of entrepreneurial action and uncertainty is largely covered in the effectuation framework, which outlines principles employed by experienced entrepreneurs when starting new firms and/or creating new markets. The corona crises offers a unique opportunity to study effectuation under absolute uncertainty and with unpredictable temporal dynamics.

Approach

We interviewed 11 restaurateurs in Helsinki and using a thinking aloud -protocol we analyseddecision-makers’ cognitive processes, priorities and related actions for a period of one year, starting from thecommencement of Finland’s first national Covid-19 lockdown in March 2020 and lasting until March 2021.

Results

The 11 entrepreneurs differed considerably in terms of their use of effectual and causal logics despite their seemingly similar backgrounds and business context. In order to understand the decision-making logic of the entrepreneurs, two other aspects appear pivotal: first, the entrepreneurs’ time horizon and second, an additional set of pre-heuristics rooted in the entrepreneur’s personal beliefs and values used to steer the direction of future decisions.

Implications and value

The main contribution of the present study for the entrepreneurship research field is the identification of three separate heuristics used by entrepreneurs during a temporal crisis: 1) creating opportunities responding to personal values, 2) pragmatic action and 3) preserving business values. Both the first and third are strongly linked to values; the first to the personal values of the entrepreneur and the third to the business values of the enterprise.