Gergely Németh

Illusions of Entrepreneurship / Theories of Entrepreneurial Behaviour

How do we think about ourselves as entrepreneurs and how do we develop our business?


The legal form

The legal form of a business is not related to its size, but rather to the guarantees, rights and obligations that the owner assumes (Beck, Demirgüç-Kunt & Maksimovic, 2005). The legal form is essentially a strategic decision. One factor must be highlighted, which is based on a perception bias: both the external perceivers (customers and competitors) and the founder (internal member) have some kind of feeling when they see the legal form. For example, there is a misperception of size and reliability when people see the name Ltd. or LLC in the name of the company. This is a classic misperception, which we classify as a variety of inadequate calibration, i.e., ‘random regression’ (Lichtenstein, Fischhoff & Phillips, 1977; Kahneman & Tversky, 1996; Mitchell, Mitchell & Smith, 2008). We regress to the mean when we see an entity and draw inferences based on the most common cases. In our example, the legal forms LLC and a Plc may suggest larger and more reliable firms than a sole trader. We have a similar perceptual bias for old and new firms in terms of reliability, even though here too, the individual has no reliable data to factualise.

Illusions of Entrepreneurship / Theories of Entrepreneurial Behaviour

Tartalomjegyzék


Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2022

ISBN: 978 963 454 839 3

In his book Gergely Németh is right to not promise a sure-fire solution to successful entrepreneurship, but he does make you think about the opportunities and pitfalls. The great advantage of the work is that it uses multiple scientific and logical approaches. It is a true interdisciplinary work. In addition to its diversity, it provides a good, readable reflection on becoming an entrepreneur. The author gently strips away illusions about the process but remains optimistic throughout. It is an important Hungarian work in entrepreneurship literature.

Prof. Dr. Balázs Heidrich

The author concludes by inviting the reader to join him in thinking differently about business and entrepreneurs. Drawing on his conclusions from the literature and empirical research to date, and from his two decades of experience as a consultant, he creates a new model of the entrepreneurial process, in which he explains the stages of the entrepreneurial process along four dimensions and suggests what entrepreneurial competences and behaviors are needed at each stage of the process, even in uncertain times, to ensure that the business can function safely.

A lot of work has gone into writing this book and the author sets out sometimes provocative findings, as well a novel approach and conclusions. These differ in many ways from the general approach and may inspire many educators, researchers, and even entrepreneurs and managers to look at corporate operations from a new perspective and to apply the author’s suggestions in a preventive way in their future work.

Prof. Dr. Erzsébet Noszkay

Hivatkozás: https://mersz.hu/nemeth-illusions-of-entrepreneurship-theories-of-entrepreneurial-behaviour//

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