Training and Entrepreneurial Decision-Making Revisited: the differential effects of training approaches on entrepreneurial decision making

By Anand Nandkumar, Anusha Sirigiri, Kannan Srikanth

Citation

Nandkumar, Anand., Sirigiri, Anusha., Srikanth, Kannan. Training and Entrepreneurial Decision-Making Revisited: the differential effects of training approaches on entrepreneurial decision making .

Abstract

Using an RCT with 658 early-stage startups, we replicate how three entrepreneurial training approaches—scientific decision-making, heuristics, and effectuation—affect outcomes such as exit probability, pivot frequency, and revenue generation. We introduce two innovations: the inclusion of a pure control group and the exploration of training effects on entrepreneurs' omission and commission errors. Our findings show that while all training methods reduce the likelihood of exit and increase revenue, heuristics results in the fewest judgment errors and the most effective pivot behavior. Scientific decision-making, though associated with higher revenues, increases judgment errors, while effectuation training exhibits moderate effects. These results provide fresh insights into how training shapes decision-making precision, errors, and entrepreneurial performance.

Anand Nandkumar is an Associate Professor of Strategy, Executive Director of SRITNE at the Indian School of Business (ISB), and Associate Dean of the Centre for Learning and Teaching Excellence. He explores industry and firm-level phenomena that influence innovation - the generation of new ideas, and entrepreneurship - distribution and commercialisation of new ideas. His research focuses on high-technology industries such as pharmaceuticals, biotechnology, and software, and it falls in between industrial organisation (IO), economics of technological change, and strategy.

Professor Nandkumar’s current work in the innovation stream examines the effect of stronger intellectual property rights (IPR) on different aspects of innovation, such as the influence of stronger patents on long run incentives for innovation or the influence of stronger patents on the functioning of Markets for Technology (MFT). In the entrepreneurship stream, his current work examines the influence of venture capitalists on entrepreneurial performance.

Professor Nandkumar graduated with a PhD in Public Policy and Management, with a focus in strategy and entrepreneurship from Carnegie Mellon University in 2008. Prior to his PhD, he worked for 3 years with a startup in Silicon Valley, and prior to that, in New York City with one of the world’s largest financial services firms.

True to his expertise, at ISB, Professor Nandkumar teaches Strategic Innovation Management and Strategic Challenges for Innovation-based startups.

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Anusha Sirigiri is an Assistant Professor of Entrepreneurship at the Indian School of Business (ISB). Her research and teaching interests lie in entrepreneurship, strategic management, and strategic human capital. Professor Sirigiri received her PhD in Business Administration and Management from Bocconi University, Italy, and a dual degree in B.E (Hons.) Mechanical Engineering and M.Sc. (Hons.) Economics from the Birla Institute of Technology and Science (BITS), Pilani, India.

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