Conceptual Framework
I used the enterprise risk management (ERM) and uncertainty management
theory (UMT) composite conceptual framework to understand entrepreneurs'
strategies to overcome risks resulting from business uncertainty. The Committee of
Sponsoring Organizations (COSO) first introduced the ERM in 2004 as a guide to
managing risks within organizations (Jayantha, 2018). The ERM framework is used
to inform researchers, business managers, and entrepreneurs about how top firm
directors and executives can respond to risks created by uncertainties (Jankensgard,
2019).
The principal components of the ERM involve addressing operation,
strategic, and financial risks. Managers can use the ERM framework to identify,
assess, address, monitor, and report risks resulting from unforeseen future events.
Managers can then use this information to make detailed timetables and plans to
reduce these risks (Jankensgard, 2019). Yang et al. (2018) posited ERM practices
influence competitiveness of firms because it improves financial literacy.
Essentially, the ERM framework advocates for managers to acquire financial
education to perform risk analysis. Businesses using ERM understand the
importance of communicating about risks which helps entrepreneurs manage
uncertainties and reduce surprises (Yang et al., 2018).
Nocco and Stulz (2022) argued the ERM framework helps business
managers limit, measure, and identify acceptable levels of a company’s net
exposure and cushion downside outcomes. According to the Office of Inspector
General (2022), entrepreneurs should use the ERM framework to help identify risks
early, assess risks, and effectively manage risks. Additionally, the ERM framework
provides a platform where all employees speak the same language regarding
uncertainty and risks. Thus, the ERM framework is suitable for entrepreneurs who
seek to grow their businesses.
ERM is also used with the uncertainty management theory (UMT) to inform
entrepreneurs about how to respond to risks related to unforeseen circumstances.
The UMT principal construct is information seeking and avoiding. Using the UMT
enables entrepreneurs to seek strategies that refine relationships and reduce these
risks. Using both the UMT and ERM offers entrepreneurs opportunities to identify
uncertainties and develop effective management strategies to reduce risks created
by business uncertainties.
Operational Definitions
Business Failure: Collapse or closure of business operations because of the
inability to make profits or enough revenue to cover the expense (Foss et al., 2018).
Business Manager: A supervisor who oversees operations of a business,
organization, or company (Jankensgard, 2019).
Business Uncertainties: Unforeseen or unmeasurable risks that businesses
face because of ongoing or unprecedented changing events (Pomerol, 2018).
Entrepreneur: Individuals who identify business opportunities intending to
make profits (Tomy & Pardede, 2018).
Food and Service Industry or Hospitality Industry: Service industry that
offers services such as lodging, food and drinks, travel and tourism, theme parks,
and event planning. It includes restaurants, bars, hotels, and tourism agencies
(Ozdemir et al.,
2021).
Assumptions, Limitations, and Delimitations
Assumptions
Assumptions are unverified facts in qualitative research studies that are out
of the researcher’s control (Fountouki & Theofandis, 2019). Researchers make
assumptions within studies to ensure that it is possible to conduct research. A
fundamental assumption for this study was that all the respondents understood
terminologies and definitions involved in the study (Rashid et al., 2019). I also
assumed that a sample size of 5 entrepreneurs from the food service industry was
adequate. Another assumption was that participants were truthful and honest in their
responses. The last assumption was that a multiple-case study research design was
most appropriate for this study.
Limitations
Limitations are restrictions within the study that are out of the researcher’s
control and influence study outcomes (Fountouki & Theofandis, 2019). One major
limitation of this study was that participants were from a specific geographic
location, and study results could not be generalized. According to Fountouki and
Theofandis (2019), conducting a study within a specified geographical area with a
small sample size makes it difficult to generalize findings.
Delimitations
Delimitations are boundaries of a study or choices researchers make in terms
of focus of their studies. (Fountouki & Theofandis, 2019). Interviewees were from
the Northeast region of the U.S. Participants were small food and service industry
owners and not from any other industry. Findings may not apply to small businesses
from other industries.
Significance of the Study
Entrepreneurs want to maximize profits and ensure they can control and
predict future occurrences (Pomerol, 2018). Food service entrepreneurs who
identify with this study can obtain practical strategies that will ensure they remain
knowledgeable about handling business risks created by uncertainties.
The implication for positive social change is that entrepreneurs can learn
how to handle risks created by business uncertainties. Given the role of uncertainty
in the failure of businesses, entrepreneurs need to be knowledgeable about ways to
mitigate associated risks. Entrepreneurs can use results of these study to make
informed decisions about what strategies to use. Business managers can also use
these strategies to improve business growth, competitive advantage, and
organizational performance. An improved understanding of risks resulting from
uncertainties can help create an enabling environment to improve employee
performance, communication, knowledge, and work ethics. Business managers and
entrepreneurs can use study results to catalyze beneficial social change by creating
employment opportunities for local communities.
A Review of the Professional and Academic Literature
Through this qualitative multiple-case study design, I aimed to provide in-
depth information about strategies entrepreneurs in the food service industry use to
reduce risks created by unforeseen business circumstances. My objective was to
explore the current state of research related to risks created by business
uncertainties. This literature review includes a detailed account of current and
previous studies related to this topic, with most references dating between 2018 and
2022.
The literature review has five essential topics: failure, Meijer’s classification
tool, risk, uncertainty, and business performance indicators. I further divided the
literature review into several subtopics that richly inform my study. The following
keywords were used: business uncertainties, risk, business failure, enterprise risk
management, business strategies, strategic management, startups, business
environment, and business performance.
To ensure academic rigor, I ensured most of my references were published between
2019 and 2023. I used Research Gate, Wiley Online Library, Frontiers, Springer,
SAGE journals, Google Scholar, and the Walden University Library to acquire
peerreviewed articles for my literature review. I used 130 academic sources, with
90% being peer-reviewed sources.
Entrepreneurs are people who find gaps within an economy and seek to
exploit these opportunities (Foss et al., 2018). However, there are barriers to such
opportunities that arise from circumstances that are probabilistic, ambiguous,
unpredictable, or intricate (Magnani & Zucchela, 2018). These uncertainties present
unique problems leading to strategic management and entrepreneurship risks. Lack
of sufficient and stable knowledge of risks that can arise from unpredictable
situations affects entrepreneurs’ behavior, affective state, and perceptions (Tomy &
Pardede, 2018). Businesses should address these risks to maintain a competitive
edge while investing in available market gaps. Researchers need more literature on
the role uncertainties play in creating business risks and fluctuating business cycles.
I discussed literature on uncertainties and associated risks that affect success of
businesses.
A firm’s survival depends on their ability to respond to and identify external
and internal threats. As per Meijer's classification tool, these threats are classified in
terms of the external and internal environment. External threats negatively affect
decision-making, internal processes, and organizational structures within firms,
which in turn causes competitive and performance risks (Tomy & Pardede, 2018).
Internal threats negatively affect the purchasing power of firms and pose financial
risks. Managing these threats is one of the most challenging tasks entrepreneurs or
managers can do. Entrepreneurs and managers must establish persistent, consistent,
and long-term plans to continuously improve organizational performance (Alvarez
& Barney, 2005, as cited in Zhang & Burg, 2019). Pecina et al. (2022) posited using
the ERM framework preserves and creates value for invested capital and promotes
long-term corporate sustainability. Entrepreneurs can use the ERM framework to
find ways to lower financial uncertainties and threats which would translate to
successful businesses and reduced business risks.
The creation of startups increases competitive risks by introducing new
services, goods, and technologies or by capital accumulation from situations
involving temporal monopolies. The resulting situation creates unknown patterns of
uncertainty. Shivam (n.d.) claimed these unknown patterns are sources of risk and
argued there will always be unexpected events occurring in the business
environment. Shivam (n.d.) explained annual rainfall may be sufficient for a
particular year; however, rainfall distribution is uncertain, and there may be a risk of
crop failure due to changes in rainfall distribution patterns. Shivam (n.d.) referred to
these uncertain patterns as the true ambiguity level of uncertainty, whereby it is
difficult to predict future variables. However, Shivam (n.d.) argued that nonlinear
dynamic prediction models could help solve ambiguity problems. The models are
used for predicting probability of events occurring in future. The information from
these models can help entrepreneurs make informed decisions on the direction of
their businesses.
Shabani et al. (2023) posited uncertainty patterns can exist in one or more of
the following phenomena: foreseen uncertainty, chaos, unforeseen uncertainty, and
variations. Foreseen uncertainty patterns are events affecting activity performance.
Unforeseen uncertainty patterns are unknown events that can negatively or
positively affect business performance. Variations are changes that affect business
outcomes. Chaos is uncertainty resulting in different solutions than earlier
envisioned. Syrett and Devine (2012, as cited in Jankensgard, 2019) recommended
firms engage in scenario planning and risk management to solve foreseen
uncertainties. Despite rich literature on uncertainties, only a few studies classify
uncertainties. Researchers need to provide solutions to entrepreneurs to learn about
the local nature of business uncertainties and thus comfortably formulate strategies
to reduce associated risks. Additionally, aspiring entrepreneurs need to understand
why small businesses are essential and instances that led to business failure. With
this knowledge, entrepreneurs will have an easier time evaluating strategies that can
reduce risks created by business uncertainties.
Conceptual Framework
A conceptual framework defines a study’s relevant variables and how they
relate to each other (Jankensgard, 2019). A conceptual framework gives an idea of
the relationship between the properties or variables the researcher intends to study
(Jankensgard, 2019). I used the ERM and UMT composite framework to understand
strategies entrepreneurs use to overcome risks resulting from business uncertainty.
ERM
Risk refers to any uncertain event involving reduced control and
unpredictability of the world and events. A risk delays an organization from meeting
its objectives or goals. One prominent risk framework is the ERM framework which
informs researchers about how top firm directors or executives respond to risks
created by external and internal threats (Assibi, 2022). Managing situations
involving risk is vital for businesses worldwide as it is a tool that can help managers
align knowledge, people, processes, strategies, and technologies. Additionally, risk
management can help entrepreneurs positively change the business environment
characterized by technical, political, natural, and economic resources (Jankensgard,
2019). Traditionally, organizations viewed risk as a series of unrelated elements in
which individual risks were coordinated and classified separately. Over time,
researchers have changed the narrative to deal with risk comprehensively to ensure
long-term growth and high performance.
The principal components of the ERM involve addressing operation,
strategic, and financial risks. Managers can use the ERM framework to identify,
assess, address, monitor, and report risks that result from external and internal
threats. Differences involving levels of information people have about individuals,
situations, and events determines how confident or uncertain they feel about an
event or situation (Assibi, 2022). Risk management ensures that the organization’s
leadership has information about an event, person, or situation (Jankensgard, 2019).
Entrepreneurs can use the ERM framework and the UMT to study how
entrepreneurs can respond to risks created by business uncertainty.
UMT
Researchers use the UMT to help them understand the role of entrepreneurs
in solving daily business problems. The UMT principal construct is information
seeking and avoiding. Managers using the UMT treat information and uncertainty
as two distinct concepts (Yang et al., 2021). The general principle is that people
have different levels of information about individuals, situations, and events (Wang
& Zhou, 2021). However, businesses using the UMT tend to have information about
an event, person, or situation and still feel insecure or uncertain about the state and
amount of information (Yang et al., 2021). This situation affects decision-making
processes that are essential to the success of startups.
Monteiro de Carvalho (2021) noted project risk management is
synonymous with uncertainty management. Risk management helps managers
identify and control variations and predictable uncertainties. Monteiro de Carvalho
(2021) noted risk management is essential for innovative managers. Entrepreneurs
and managers must explore opportunities and mitigate risks to ensure their projects
are successful. I incorporated the UMT as a viable framework for studying how
entrepreneurs can respond to business risks created by uncertainties. The UMT
helps entrepreneurs investigate cultural diversity, emotions, communication, and
social support to inform them about how to deal with business risks created by
uncertainty (Wang & Zhou, 2021). Culture, past experiences, and national origins
affect entrepreneurs’ different degrees of business uncertainty and anxiety. These
factors also affect how entrepreneurs understand business uncertainties and
implement specific directives or leadership styles over others for similar or different
situations (Wang & Zhou, 2021). Comparing entrepreneurs’ differing responses to
similar or different situations provides insight regarding the causes of business
failure (Yang et al., 2021). The UMT is a framework through which researchers can
learn about risks business uncertainties impose on entrepreneurs and advocate for
strategies that can reduce these risks.
Meijer’s Classification Tool
The Meijer’s classification tool is used to help individuals classify the
various types of uncertainty entrepreneurs may encounter while running their
businesses. These classifications lead to themes that I will use to analyze qualitative
data. Starting a business is relatively more straightforward than sustaining one.
Startups must contend with competitive market forces such as entry barriers,
substitute threats, buyers’ power, suppliers’ power, and competitive rivalries
(Isabelle et al., 2020). Entrepreneurs must analyze these market forces to develop
strategies that increase their chances of being successful. These forces exist as
uncertainties that entrepreneurs must look to understand (Tomy & Pardede, 2018).
Entrepreneurs who use Meijer’s classification analysis tool is a tabular
representation of the various forms of uncertainty. The tools helps entrepreneurs
classify the various uncertainties and address the associated risks (Tomy & Pardede,
2018). It classifies uncertainty by describing the type of business environment each
uncertainty affects. Meijer’s classification tool classifies uncertainty into five major
categories as shown below.
Figure 1
Tabular Representation of Meijer’s Classification Analysis Tool
External Environment Internal
Environment
Competitive
uncertainties
Technological
uncertainties
Customer
uncertainties
Political uncertainties
Resource
uncertainties
Identify opportunity
Evaluate opportunity
Refine opportunity
Exploit opportunity
Entrepreneurs use Meijer’s classification tool to evaluate and classify the
uncertainties within the external and internal environment that may delay business
opportunities. This strategy incorporates new technology as a source of uncertainty.
Meijer’s classification tool is essential to entrepreneurs during opportunity
evaluation as it helps them decide whether to pursue or ignore a perceived
opportunity. During the opportunity evaluation stage, the entrepreneur investigates
and evaluates internal and external environments (see Figure 1) to determine
uncertainties associated with the identified opportunity (Tomy & Pardede, 2018).
Knowing the categories of uncertainty fall, via Meijer’s classification tool, enables
entrepreneurs to identify potential business risk factors and plan accordingly.
Economic trends influence entrepreneurs’ decisions to introduce new
ventures.
Usually, entrepreneurs venture into business when needed capital is low and there is high
economic growth (Foss et al., 2018). Entrepreneurs should be aware of vast and varied
business opportunities created by economic growth (Foss et al., 2018). Meijer’s
classification analysis tool helps entrepreneurs synchronize information about
uncertainties which improves decision-making processes while identifying new markets
(Assibi, 2022). Consequently, entrepreneurs can seek more information, educate
themselves on the uncertainties related to opportunities and avoid any predictable risks.
Organizations compete to retain and make new customers, increase profit
margins, and expand their market share. Hence, they need to conduct competitive
analyses to identify ways to penetrate the competitive market and grow (Assibi,
2022). Entrepreneurs must understand that limited resources and lack of established
suppliers and consumer channels negatively affects their new ventures (United
Nations Conference on Trade and Development, 2022). Entrepreneurs need to make
appropriate decisions that will help them determine their market and identify their
competitors and respective market strategies. Using the ERM framework helps
entrepreneurs gather up-to-date and relevant market information to establish risks of
starting a new business (Pecina et al., 2022). Entrepreneurs can use the ERM
framework to evaluate opportunities that they can exploit. For repeated events,
entrepreneurs can use their experiences to reduce business risks associated with
uncertainties. Zayadin et al. (2022) posited entrepreneurs using their experience to
navigate business uncertainties must be knowledgeable and confident in their skills.
Entrepreneurs should also keep an open mind and consider different possibilities
while working on their startups (Mensah et al., 2021). Meijer’s Classification tool
also provides entrepreneurs with a cognitive map that guides their imagination and
assumptions, especially when dealing with complex decisions in uncertain
environments (Hartwell, 2022). Therefore, it provides directions to entrepreneurs
whenever they are uncertain with business opportunities.
Availability of resources and starting capital are crucial to entrepreneurs
venturing into or maintaining their businesses. Entrepreneurs can use Meijer’s
classification analysis tool to accurately forecast capital and resource investments
because it is used to question skills, expertise, knowledge, and revenue (Tomy &
Pardede, 2018). Usually, uncertainty classification acts as a screening mechanism
that increases an entrepreneur’s understanding of the nature and characteristics of
risks when opening a shop with uncertainties. Such understanding helps managers
improve firm’s profit margin, sales, and innovation power and allows it to grow.
Meijer’s classification tool increases knowledge that is essential for deciding what
business they want to open.
Importance of Small Businesses
Small businesses are essential constituents of the U.S. economy. The 2020
United States small business profile report noted that small businesses were
responsible for employing 60.6 million people in 2017 (SBA, 2020). In 2019, small
businesses created 1.6 million net jobs (SBA, 2020). Interestingly, small businesses
have shaped the world into what it is today. These ventures have provided
individuals with meaningful opportunities for financial independence and success.
The economic growth of industries and countries is dependent on the
creativity of the citizens and employees (Correa-Quezada et al., 2018). According to
the Small Business & Entrepreneurship Council [SBE] (2022), small businesses
produce more significant innovation than large firms. The SBE (2022) reported
small businesses generate approximately 1.2626 patent citations per million dollars
of R&D stock. These small business patents contrast with the 0.5712 patent
citations per million dollars of R&D stock reported for large firms (SBE, 2022). The
high patents numbers indicate that small businesses are more creative and
innovative than large firms. This creativity lead to economic growth of industries.
The United States government should protect small businesses and their employees
to increase economic growth.
According to SBA (2018), small businesses are more involved in innovative
programs than large businesses. Small businesses’ high innovation levels result
from focused research programs, fast decision-making processes, and adequate
compensation structures that highly reward top performers (Mandula, 2018). The
success enjoyed by small businesses has forced large firms to downsize and
separate employees into work units spark creativity and innovation (Correa-
Quezada et al., 2018). This tendency to downsize large firms shows the importance
of the innovative capabilities of small businesses to sustainability. Scholars need to
study small businesses or startups to help eliminate or reduce risks created by
uncertainties that may lead to their failure.
Small businesses are also advantageous as they provide entrepreneurs with equity
(SBA, 2018). Most entrepreneurs run their business and later sell or pass it on to
future generations. Additionally, these businesses are a source of social prestige and
status (SBA, 2018). Small business owners have complete control of the business
operation and immerse themselves in daily operations out of passion and the desire
to achieve the set goals (SBA, 2018). An entrepreneur establishes a certain level of
control over the business, allowing him or her to create a satisfying brand for self
and consumers (Mandula, 2018). Status, social prestige, and equity provide
entrepreneurs with significant satisfaction from engaging in a business. This
satisfaction offers more significant financial gain and independence, ensuring that
small businesses or startups thrive, providing job security, and driving the local
economy.
Small businesses within the U.S. require formalized risk management
system because they form the largest and most important sector of the American
economy. The ERM is a proactive risk prevention tool that addresses risk in all
functional areas for small businesses and improves the probability of the businesses
achieving their strategic objectives (Glowka et al., 2021). The ERM framework
increases the value and effectiveness of a firm and reduces the risk of small
business failure (Manas et al., 2021). The ERM framework provides entrepreneurs
and managers with various risk mitigation options allowing them to improve their
ability to forecast future business uncertainties. However, small business
entrepreneurs rarely use the ERM framework to mitigate risks because they need to
gain awareness of ERM benefits, fear change, and need more familiarity with the
framework and the cost of implementing ERM.
Small Business Failure Statistics
Each year, thousands of entrepreneurs in America start new business ventures. In
2021, there were 5.4 million applications for new businesses (The White House,
2022). Approximately half of these startups close or exit their respective industries
within the first five years. Titus (n.d.) noted over 50% of startups fail within the first
year, while 95% still need to make it to the sixth year. Titus (n.d.) posited startups
with less than 20 employees have a 37% survival rate within the first four years and
a 9% survival rate over ten years. The uncertainties surrounding these startups lead
to massive business closures and low survival rates. According to Elbahjaoui et al.
(2022), these businesses fail because of managers’ inexperience and incompetency.
Inexperience and incompetency are associated with the lack of appropriate skills,
knowledge, and resources to handle a business. Entrepreneurs need to learn how to
plan for the success of their businesses by learning about uncertainties and
strategies to overcome them.
Dautovic (2019) also shared the same view and supported his argument
using the U.S. Bureau of Labor statistics to inform aspiring entrepreneurs of the
small business failure rates. According to the Bureau, 66.3% of small businesses
founded in 2008 did not make it to 2018. Another 49.3% of startups founded in
2013 closed before 2018. Mansfield (2019) noted only 56% of small businesses
started in 2014 made it to the fifth year and that their failure rate stood at 44% in the
fifth year. This data indicates that many small businesses fail within the first five
years. Entrepreneurs must seek ways to reduce failure rates. Otherwise, many small
businesses will continue to fail within the first five years of operation.
Entrepreneurs understanding the meaning of the term business failure can
help them avoid the collapse of their businesses. Failure refers to inadequacies or
deficiencies (Tomy & Pardede, 2018). When used in business, it mainly refers to the
companies' closure, dissolution, disappearance, discontinuance, insolvency,
bankruptcy, and entrepreneurial exit. Jayasekara et al. (2020) added small business
failure occurs whenever the management fails its operational duties. Understanding
terms such as disappearance, exit, insolvency, discontinuance, and bankruptcy is
essential to avoiding small business failure.
Exit means that a business moves away from a specific market or production
of a specific product (Díez et al., 2021). It could also mean that the entrepreneur
ended his participation in the business. The disappearance of a business means that
a given company or firm merges with another to form a new united business front.
Insolvency refers to the firm's inability to pay its debts (Díez et al., 2021).
Bankruptcy is when the debts owed exceed the value of a company's assets, capital,
and profit and usually lasts for a year (Díez et al., 2021). Bankruptcy forces
entrepreneurs to sell their non-essential assets to pay creditors. Unfortunately,
insolvency has dire consequences that exceed those of bankruptcy (Jayasekara et
al., 2020). Nevertheless, all these terms refer to business failure. Knowing these
terms helps the entrepreneur identify relevant situations that indicate the business is
close to failing.
Impact of Small Business Failure on Entrepreneurs
Business failure in contemporary society is a constant that must be studied
to ensure that entrepreneurs maintain hope in venturing into new markets. Knowing
the impact of business failure on entrepreneurs can help identify significant themes
related to business uncertainties. Dias and Teixeira (2017, as cited in Lattacher &
Wdowiak, 2022) analyzed the impact of business failure on an entrepreneur's ability
to run another business. The two researchers analyzed the progress and ability of an
individual to develop new ventures after failing during the first attempt.
Additionally, the study looked at business behavior and the consequences of failure.
Dias and Teixeira (2017. as cited in Lattacher & Wdowiak, 2022) added business
failure is a traumatic event that can result in a series of benefits and costs depending
on how organizations view it. The two researchers also focused on successful
entrepreneurs with prior experience with business failure. The researchers used a
qualitative approach that administered semistructured interviews to six
entrepreneurs: three from the south of Europe and three from the north. The
findings revealed a strong correlation between previous business failures and an
entrepreneur’s decision-making ability. Prior experience with business failure
reduces risks created by uncertainties, especially during the decision-making
process. Lattacher and Wdowiak (2022) posited age, experiences, and perception of
blame affects an entrepreneur’s career path.
Businesses are moving towards extending their markets by targeting foreign
customers as they take advantage of globalization and international agreements.
Regrettably, some of these businesses fail because of uncertainties that exist in the
form of factors such as lack of competitiveness, aggressive diversifications, poor
decisionmaking, inadequate corporate governance, misappropriation of funds, and
poor capital structures (United Nations, 2020). These factors contributing to
business failure relate to profitability, profit structures, growth, and liquidity.
Entrepreneurs with businesses that fail while operating in foreign markets or
countries tend to take a long time to repay their debts and feel discouraged to start
over. Froese et al. (2019) recommended entrepreneurs working in foreign countries
invest their time in understanding foreign countries' cultural, human resource, and
regulatory environments. These managers or entrepreneurs must also learn how to
create structures that are relevant and in line with these environments to avoid
failure in foreign markets.
Entrepreneurs start their businesses so that they can succeed. Nevertheless,
thousands of entrepreneurs experience damaging and painful failures each year
independent of the stage of the business life cycle: birth, growth, maturity, decline,
and revival stages (Klimas et al., 2020). Jayasekara et al. (2020) noted the causes of
failure for startups differed from those of older and bigger firms. Interestingly,
Jayasekara et al. (2020) posited startups and small businesses failed principally
because of inexperience, management inefficiencies, and insufficient financial
resources. After failure, some entrepreneurs choose not to reopen other businesses
because of the associated psychological costs and financial losses. Self-awareness
and career ambitions force other entrepreneurs to actively prepare for re-entry into
businesses. However, the latter type of entrepreneur must have strategies in place to
overcome risks created by uncertainties to avoid failure during the second attempt.
Risk Versus Uncertainty
Researchers frequently confuse business uncertainties with business risks.
Typically, organizations use the uncertainty and risk concepts interchangeably.
Alvarez and Barney (2005, as cited in Zhang & Burg, 2019) argued uncertainty and
risk are synonymous. However, Nisani et al. (2022) noted a significant difference
between risk and uncertainty. Risk refers to situations where the realized events are
unknown, but all their probabilities are known. In contrast, uncertainty refers to
situations where the events are unrealized, and their probabilities are unknown
(Nisani et al., 2022). The Covid-19 pandemic is an example of business
uncertainties. During the period, businesses reacted by granting employees leaves,
reducing their working hours, and laying them off (Polinkevych et al., 2021). The
actions by businesses slowed down economic growth and exposed most businesses
to the risk of failure. An example of an event under risk is when a business moves
its data to the cloud. There is always a probability that the data may be
compromised, and the business must find a way to secure such data. Understanding
when a business is facing uncertainties or risks is critical to the survival and growth
of small businesses.
Pomerol (2018) recommended entrepreneurs continually plan, monitor,
assess, and analyze all organizational necessities to meet organizational goals.
Entrepreneurs can use the ERM framework to transform strategy into operational
and tactical activities that can help reduce risks created by uncertainties.
Entrepreneurs using ERM programs tend to investigate the impacts of the external
and internal environment surrounding a business (Jankensgard, 2019). The
programs help entrepreneurs identify the sources of business uncertainties, raise the
firm’s value, create a competitive advantage, and reduce the risk of failure. Some of
the sources of business uncertainties are listed in the literature below and follow
Meijer’s classification tool.
Business Uncertainties that Create Risks
Small startups face intense pressure in a rapidly evolving, chaotic,
competitive, and uncertain environment (Tomy & Pardede, 2018). Primarily,
entrepreneurs fail because they lack adequate strategies to deal with risks created by
uncertainties. Sniazhko (2019) defined uncertainties as the lack of knowledge of
probabilities of future events, such as market prices, entry mode choices, and
entrepreneurs’ commitment levels. Tomy and Pardede (2018) referred to
uncertainties as a lack of understanding of any business situation. These two authors
also posited that uncertainties create threats and opportunities for the creation of
new ventures. Tomy and Pardede (2018) conducted a research study where they
found that their success prediction model effectively identified the weaknesses,
strengths, opportunities, and threats a business opportunity poses. Also, the findings
indicated that the model could identify highly significant uncertainties and help
with the utilization of resources.
Furthermore, the success prediction model helps identify the effects of
uncertainties on different entrepreneurial stages. Lastly, Tomy and Pardede (2018)
indicated that this model is an essential tool that gives organizations a competitive
advantage over their rivals. Pomerol (2018) argued entrepreneurs feed on
uncertainty and identify areas where they can develop and create new startups.
What these authors have in common is that they agree that entrepreneurs can use
the knowledge of uncertainties to predict associated risks and evade business
failure. That is, entrepreneurs need to manage risks associated with uncertainties to
avoid the collapse of these startups. According to
Meijer, uncertainties greatly influence entrepreneurs’ actions and innovative
decisions. Hence, entrepreneurs must continuously understand the different
business uncertainties to reduce business risks.
Environmental Uncertainties
Environmental uncertainties refer to the inability of an organization or
entrepreneur to predict future probabilities because of environmental factors.
Predicting future probabilities depends on the business or entrepreneur having
information about crucial business dimensions as informed by information
technology (IT), supply chains, a shift in customer demands, new competitors, and
socio-political factors. Yue and Gao (2021) studied the relationship between
environmental uncertainty and business investment capabilities. Yue and Gao
(2021) noted that increased environmental uncertainty makes it difficult for
businesses or firms to obtain information and negatively affects decision-making
processes.
Globalization and the recent upsurge of the Covid-19 pandemic have led to
complex changes within business environments and behavior, resulting in
environmental uncertainties. Pires and Alves (2022) noted that the war in Ukraine,
the pandemic crisis, rapidly changing technologies, increased competition, and
globalization had increased business uncertainties. Pires and Alves (2022)
recommended that managers seek financial and non-financial information to help
them make better decisions to reduce environmental uncertainties. The ERM
framework allows large companies to identify, control, measure, monitor, and
analyze corporate risks (Wirahadi & Pasaribu, 2021). Unfortunately, small business
decision-making depends on the judgment and subjectivity of entrepreneurs and
managers. Entrepreneurs tend to be reactive in the event of risks and uncertainties,
which reduces their ability to mitigate risks. Small businesses should use the ERM
framework because it helps entrepreneurs identify better governance systems and
lucrative prospects and create competitive advantages, especially in times of crisis.
High environmental uncertainty affects the ability of entrepreneurs to plan
and control the performance of their businesses. Aprisma and Sudaryati (2020)
examined the impact of environmental uncertainty on organizational performance.
They noted that environmental uncertainty decreases sales volume, increases
operating costs, and negatively affects business performance. Koç et al. (2022)
examined the impact of environmental uncertainty on the supply chain. Koç et al.
(2022) noted environmental uncertainty negatively affects the supply chain. Koç et
al. (2022) proposed entrepreneurs must become agile and explore different supply
chains to overcome environmental uncertainties. This assertion relates to the UMT
framework, where entrepreneurs are encouraged to enhance their creativity,
participation, and imagination to develop risk management strategies to overcome
environmental uncertainty. Later, entrepreneurs can use the ERM framework to
convert the strategies into actionable solutions that reduce environmental
uncertainties.
The food service industry can borrow some strategies from the healthcare
industry to adapt to the external environment. The healthcare industry faces a
complex and changing external environment in the form of intense government
regulations, changing reimbursement schemas, workforce scarcity, and consumer
demands. Adhikara et al. (2022) conducted a study to obtain empirical evidence on
the effect of environmental uncertainty on hospital performance. The United States
healthcare industry is moving towards value-based services to keep the population
healthy. Lu et al. (2022) argued hospitals should find ways to adapt to new
environments by encouraging innovations. Nevertheless, this healthcare industry
has a complex structure with fragmented and idiosyncratic stakeholders who form
the external environment and make it difficult to set up uncertainty management
strategies.
Adhikara et al. (2022) noted the social and physical factors considered
during decision-making form a firm’s environment. Adhikara et al. (2022) indicated
situational uncertainties in the environment cause variations in hospital performance
because different managers respond differently to the uncertainties. Adhikara et al.
(2022) recommended managers in hospitals use management control systems and
budgetary slack to reduce environmental uncertainties while improving hospital
performances.
Lewandoski (2022) argued management control systems help hospital managers
review, monitor, and establish performance standards. Lewandoski (2022) stated
managers using management control systems can focus on strategic uncertainties
and develop effective strategies against environmental uncertainties. Adhikara et al.
(2022) further recommended that healthcare managers develop adequate, complete,
relevant, and related data on the professional environment to help improve decision-
making processes. From the findings of this study, entrepreneurs in the food service
industry should introduce information technology as an effective strategy to manage
and control environmental uncertainties.
A firm’s success depends on its management having an edge over its
competitors. Managers do not always have an edge over their competitors because
of the dynamic business environment. Firms must match their operations with the
environment to improve performance and success rates. Zayadin et al., (2022) noted
entrepreneurs must understand regional and local markets as their environment if
they intend to make better decisions in situations with environmental uncertainties.
Jabnoun et al. (2020) recommended organizations integrate environmental
uncertainty with business strategy and quality management practices. Furthermore,
Jabnoun et al. (2020) advocated organizations view environmental uncertainty as a
function of environmental complexity and dynamism. Jabnoun et al. (2020)
proposed four adaptive decision patterns to curb environmental uncertainty:
reactors, analyzers, prospectors, and defenders’ strategies. A defender strategy looks
at market stability whereby an organization must safeguard a limited product within
a given potential market segment (Jabnoun et al., 2020). A prospector strategy
encourages creativity, product innovation, market opportunity, and flexibility over
efficiency. An analyzer strategy focuses on balancing innovation and efficiency.
Lastly, reactors focus on responding to environmental changes (Jabnoun et al.,
2020). Focusing on environmental changes helps entrepreneurs identify new
opportunities, plan, tap useful resources, and improve profitability and performance
of their businesses. Overall, these decision patterns help entrepreneurs maintain a
competitive edge over their rivals and reduce environmental uncertainty.
Businesses need to maintain a competitive edge over rival businesses. To do
so, firms must determine the effects of environmental uncertainty on their
performance.
Zayadin et al. (2022) argued environmental uncertainty affects entrepreneurs’
decisionmaking capabilities and perceptions. Perceptions change dynamically
affecting entrepreneurial behavior. Poor perception and decision-making abilities
reduce organizational performance. Linn and Maenhout (2019) conducted a study to
determine the effect of environmental uncertainty on the performance of the rice
supply chain in the Ayeyarwaddy region in Myanmar. Linn and Maenhout (2019)
interviewed 215 respondents who were selected using a purposive ad stratified
random sampling method. Additionally, the interviewed sample contained several
actors—exporters, rice millers, retailers, farmers, and wholesalers—across the rice
value chain. The authors also incorporated questionnaires and relevant published
sources from the government and other organizations. Linn and Maenhout validated
the data from the interviews and questionnaires using the Tobit regression model
and the data envelopment analysis. The study’s findings indicated that high
environmental uncertainty causes a delay in the delivery of finished goods, lowers
efficiency, and destabilizes inventory levels within the rice value chain.
Additionally, uncertain drought occurrences and poor distribution of rainfall
negatively affect rice yields. Linn and Maenhout (2019) noted high uncertainty in
government policies, especially in developing countries, contributes to
unpredictable levels of competition. These authors noted the rice supply chain could
benefit from actively seeking relevant information to avoid environmental
uncertainties. Linn and Maenhout (2019) recommended for the rice value chain to
reduce environmental uncertainties, the various actors must prioritize their needs
and resources, prepare for adverse climatic conditions, and work to formulate
supply chain cooperatives. Koc et al. (2022) noted organizations need to seek
realistic information about resource availability, market conditions, and
technological advancement to gain competitive advantage over rival firms. With
these information, managers can overcome environmental uncertainties.
Managers and entrepreneurs must distinguish environmental uncertainty’s
source, level, and nature of environmental uncertainty. Environmental uncertainty
exists in the form of variability and cognitive uncertainties (Samsami et al., 2015, as
cited in Drekolias, 2020). Cognitive uncertainty is dependent on the level and
limitations of information and knowledge. Decision-makers reduce this form of
uncertainty through learning, creating knowledge, and research. Variability
uncertainty depends on a system’s variability, such as cultural and social-economic
dynamics, human behavior, and the randomness of nature. Entrepreneurs also need
to establish the level of uncertainty surrounding a given business situation. Koc et
al. (2022) noted uncertainties constantly change and businesses must be agile while
responding to uncertainties. Unfortunately, entrepreneurs could have a complete
understanding to complete ignorance of a subject matter (Samsami et al. 2015, as
cited in Drekolias, 2020). As a result, there will be businesses that survive while
others that will fail. Overall, entrepreneurs need to be agile and informed to make
better decisions to reduce high levels of environmental uncertainties.
Samsami et al. (2015, as cited in Drekolias, 2020) further indicated
decisionmakers are uncertain about various environments. Thus, to improve
organizational performance, entrepreneurs must understand the contextual and
transactional environment. Samsami et al. (2015, as cited in Drekolias, 2020)
established two sources of environmental uncertainty: external and internal. The
internal sources result from information processing, financial impact, and impact of
organizational values. The external sources result from human and natural
problems, organizational response to environmental uncertainty, rules and
regulations set within a company, or a combination of two or more factors (Chen et
al., 2022) . An entrepreneur must be privy to these conditions to avoid making the
wrong decisions and contributing to the failure of his/her business. All in all, the
knowledge of the level, nature, and sources of uncertainty helps decision-makers
settle for the right choice of action.
The ever-changing technology and globalized competition have made
business environments less predictable. Tweiqat and Al-Adaileh (2020)
recommended organizations be flexible to survive uncertain environments. They
argued that companies should adopt flexible production methods and workplace
rules. Therefore, Tweiqat and Al-Adaileh (2020) conducted a research study
examining the impacts of environmental uncertainty on human resource (HR)
flexibility. The study used a mixed-method approach. The researchers issued valid
questionnaires, which 266 managers of Jordanian banks filled out. The data
collected was subjected to structural equations modeling to determine the
relationship between HR dimensions under environmental uncertainty. These
dimensions of HR flexibility included functional flexibility, market-oriented
flexibility, behavior flexibility, financial flexibility, HR sustainability, and skill
flexibility (Tweiqat & Al-Adaileh, 2020). The study revealed a relationship between
HR flexibility and environmental uncertainty. According to Zandvoort et al. (2018),
firms must develop a robust human resource management system to adapt to the
ever-changing environment.
Consequently, this will improve the chances for business success.
According to Sharma et al. (2020), the current Covid-19 pandemic presents
environmental health uncertainties. The pandemic has negatively impacted the US
hotel industry because of the social distancing policies and the unknown scale of the
outbreak. Riaz (2020) noted hotels in the US have resulted in staff reduction,
furloughs, and on the extreme, others have closed. The author also noted that hotel
occupancy and revenues had dropped significantly in the United States.
Correspondingly, some governments had to give their citizens cash to survive the
pandemic. The Covid-19 crisis has led to the collapse of businesses. This
breakdown is because of the fear of contracting the disease in public spaces.
Sharma et al. (2020) noted most governments restricted human movement,
consequently impacting economic activities more so in the hotel industry. Taking
that into account, hotels need to find ways to overcome the overall uncertainty
associated with the pandemic.
Resource Uncertainties
Resource uncertainty within the business environment refers to a limited
skilled workforce and financial resources. Difficulties in forecasting accurate capital
investments and resources needed for innovation contribute to resource
uncertainties. The success of any business depends on the managers’ capability to
find ways to avail the required expertise, knowledge, machines, revenue streams,
technology adoption, cost structure, and expenditures (Foss et al., 2018). When
operating a business, an entrepreneur must answer questions on the number of
critical activities and resources to develop the necessary strategies to execute their
business. According to Yang et al. (2018), entrepreneurs must continuously evaluate
external and internal conditions and their effect on the value of resources.
Additionally, entrepreneurs need to work on their networks and personal resources.
Entrepreneurs should also rely on other businesspeople and businesses to acquire
resources. Entrepreneurs should also rely on skilled human resources to improve
innovation processes within their startups.
Resource uncertainty can also exist as a lack of access to social networks.
Entrepreneurs grow by connecting with others who share ideas, messages, and
businesses. Social networking provides entrepreneurs with communication channels
that are particularly suitable for improving customer relations and increasing brand
awareness
(Foss et al., 2018). Tomy and Pardede (2018) argued that social networks help
entrepreneurs reduce overhead costs and the potential risk of ownership because
they provide entrepreneurs with resources without controlling them. Thus,
entrepreneurs need social networks, especially those starting new ventures.
Technological Uncertainties
The high demand for new technology and innovations has created complex
technologies that cause competition risks. The complexity of these technologies has
increased technological uncertainties (Tomy & Pardede, 2018). These uncertainties
provide a wide range of future outcomes that may threaten a startup’s success.
Furthermore, the speed of innovation has affected startups’ ability to compete with
established rival firms. Businesses must acquire technological infrastructure to
manage and keep their customers (Tomy & Pardede, 2018). The availability of
technological resources increases the chances of a business surviving, especially
with the high uncertainty associated with emerging technologies. The high
technological uncertainties call for entrepreneurs to predict a wide range of futures
and research potential markets where they can introduce their products and services
(Kapoor & Klueter, 2021). This future long-term strategy requires entrepreneurs to
explore their creativity and intuition, tenets of the ERM framework. Entrepreneurs
should also document the objectives of their business and how they intend to
achieve the goals by using a business plan. A careful analysis of a start-up business
plan will reveal the dimensions of uncertainty the entrepreneur should have
considered while starting the business (Welter et al., 2021). For example, the
business plan may reveal that an entrepreneur made an error by postponing key
innovative activities in certain phases of the business (Welter et al., 2021). These
revelations will help the entrepreneur fast-track these innovative activities to save
the startup from competition risks. Identifying such weaknesses and strengths is
essential to developing strategies to deal with technological uncertainties.
Managers and entrepreneurs must continuously update their technology to
remain relevant in their specific markets (Tomy & Pardede, 2018). The growth of
companies and economies is dependent on product market innovation, rising
income, and technological upgrades. These technological upgrades also translate to
introducing new technology within the industry. The new technologies and their
associated uncertainties influence the decision-making processes. Xiao et al. (2019)
analyzed the impact of technological uncertainty on organizational product
development. The authors noted that technology uncertainties affect manufacturers
and suppliers. Xiao et al. (2019) recommended manufacturers tap into suppliers’
knowledge of complementary resources and capabilities. The authors noted that
suppliers’ involvement with consumers helps inform manufacturers of designs and
modifications they can make to their products as per consumer preferences. Xiao et
al. (2019) further argued businesses could overcome technological uncertainties by
sharing technology and involving suppliers in product development teams. The
inability of entrepreneurs to predict future outcomes originates from the
unavailability of information and the lack of proper information processing
mechanisms. Startups will likely experience technological uncertainties, especially
when competing with larger firms. Tapping into the suppliers’ knowledge of
technology can help entrepreneurs obtain information related to their product
designs and curb the adverse effects of technological uncertainties.
Technological uncertainty plays a significant role in decision-making and
the introduction of new products and technology. Business owners are slowly
increasing the use of technology and social media to advertise and market their
products (Welter et al., 2021). A lack of familiarity with technological development
creates indecisiveness among entrepreneurs and puts a business at risk of failure.
Cedlöf and Nordengren (2021) conducted a qualitative study to explore existing
literature on technological uncertainty. Additionally, the two authors interviewed
company representatives to identify how decision-making processes are affected by
uncertainty. The findings indicated that a lack of enough information on a potential
technology made it difficult to decide on possible investments (Cedlöf &
Nordengren, 2021). They recommended the use of technology vigilance and
product flexibility to improve the chances of success for any business. Therefore,
entrepreneurs need to invest in innovation and technology to increase their chances
of success. Moreover, decision-makers must build platforms that allow their
organizations to adapt, incorporate, and fine-tune new technology.
Introducing new technologies in the business environment is a challenge for
most firms. The more complex a technology is, the more uncertainties it poses to
firms and managers (Kapoor & Klueter, 2021). Firms that incorporate and
understand the importance of IT are more likely to make better decisions than those
that do not. Using IT systems allows entrepreneurs to forecast customer demands,
receive consumer feedback, and make informed decisions that steer the firm in the
right direction. For example, the Covid-19 pandemic negatively affected the food
service industry because governments worldwide ordered restricted movement and
the closure of hotels and restaurants. The food service industry reacted to this
uncertainty by introducing contactless options such as live promotions, robots for
food delivery, and delivery apps (Lau, 2020). For this reason, small business
managers and entrepreneurs must adapt to huge technological uncertainties by
investing in information technology systems.
Political Uncertainties
Analyzing political uncertainty helps entrepreneurs understand government
policies that promote and regulate their businesses. Uncertainties in taxation, trade
restrictions, copyrights, trade unions’ policies, consumer law, safety regulations, and
intellectual property significantly impact entrepreneurs’ decisions (Brown et al.,
2020).
Meijer’s classification analysis tool allows entrepreneurs to make dynamic
decisions that can be amended or reconsidered with time (Tomy & Pardede, 2018).
Interestingly, this method incorporates the entrepreneur’s imagination and
experience in solving uncertainties. For example, if the political environment is
unstable, most entrepreneurs will shy away from venturing into business (Montes &
Nogueira, 2022). Further, classification allows firms to set conventions and terms
within an organizational setting.
Additionally, imposing a classification system increases the level of accountability.
Meijer’s classification analysis tool allows a startup to keep organized records of
government policies and strategies to deal with business uncertainties.
Brown et al. (2020) noted government policies significantly impact the
growth of startups and a country’s economy. Brown et al. (2020) posited the
polarization of the United Kingdom electorate is because of intensified political
uncertainty. This political uncertainty has led to Brexit policies that have made the
search for opportunities and forward economic planning challenging even for the
most adept firms. Brown et al. (2020) indicated Brexit policies resulted in the loss
of jobs, low innovative expenditure, and reduced exports for small and medium
enterprises in the U.K. Montes and Nogueira (2022) noted political uncertainty
affects economic policies and reduces business confidence. Uncertainty in
economic policies reduces entrepreneurial opportunities and makes it difficult for
opportunity entrepreneurs to venture into new businesses.
Amore and Corina (2021) posited political uncertainty affects firms’ abilities
to access resources and attain financial profitability. For example, the United States
‘fiscal cliff’ crisis in 2013 negatively impacted businesses in Washington. Amore
and Corina (2021) noted political uncertainty rises during election periods because
organizations are unsure of the voting outcomes and the effects of the policies that
the incoming government will implement. Governments are critical in encouraging
business expansion and creation through tax incentives and friendly trade policies.
Political uncertainties also negatively affect businesses because it lowers
productivity growth rates and hinders business continuity (Ozdemir et al., 2021).
Amore and Corina (2021) recommended entrepreneurs and firms seek information
on specific elements of political institutions within the country they intend to invest
in.
Political uncertainties relate to uncertainty regarding the future path that the
government will take. Governments must adopt strategies and policies that drive the
food service industry to practice corporate social responsibility (Fahad, 2022).
Corporate social responsibility scores in the food service industry decrease with the
increase of political uncertainty. Political uncertainty causes changes in a country’s
policies and risk perception that affect consumer behavior, firms’ hiring behavior,
and the financial markets. According to Ozdemir et al. (2021), political uncertainty
negatively affects hotel occupancy and consumer confidence, with consumers
avoiding visiting areas experiencing political instability. There is also the tendency
for consumers to favor businesses with longer operating histories over newer
businesses. Political uncertainties also cause substantial financial losses, with most
hotels and restaurants being vacant during peak season (Ozdemir et al., 2021).
Therefore, governments, with the help of food service industry stakeholders, must
develop risk management systems for the failure of the food service industry
because of political uncertainties.
Innovation Uncertainties
Small startups need to decide what innovation to incorporate to increase
their chances of survival, especially if there are large and established firms in the
same industry (Pomerol, 2018). Innovation refers to practices, products, or ideas
considered new by business organizations that intend to adopt them (Dagan et al.,
2021). By extension, innovation consists of four generic processes: struggle,
variation, retention, and selection (Benner & Beunza, 2020). Variation refers to all
the new ideas from which entrepreneurs select. Selection refers to picking and
eliminating ideas and depends on environmental factors and organizational
competencies. Struggle refers to the scarcity of resources required to implement the
selected ideas. Retention refers to the duplication or preservation of new ideas for
future use.
Innovation processes are surrounded by uncertainties and may not always
solve the problems that the innovators intend them to. Given that the future is
uncertain, it is also true that future innovations integral to business success are
uncertain (Dagan et al., 2021). Luthfa (2019) noted these planned and deliberate
innovative processes paradoxically could have negative and positive consequences.
For that reason, entrepreneurs need to control and monitor the initiation and
implementation processes for all innovative ideas that their businesses intend to
adopt. Jalonen (2012, as cited in Luthfa, 2019) also noted innovation is a creative
destruction in that new ideas and practices replace old organizational, technological,
economic, and regulatory paradigms. The author also noted that the process is
neither causal nor linear but one of failure or success. Luthfa (2019) conducted a
qualitative case study research to understand uncertainties within the business
innovation processes. Luthfa (2019) noted the innovation process is uncertain and
that innovations possess unanticipated, indirect, and undesirable consequences.
Additionally, the interdependency of managerial, political, consequence, timing,
acceptance, institutional, technical, and market uncertainty also affect the
innovation process.
Success and communication are intertwined factors that are important for
the survival of any organization (Van der Bles et al., 2019). Van der Bles et al.
(2019) noted businesses should identify trustworthy people who communicate and
relay information about uncertainties within an organization. Nevertheless,
innovation creates uncertainties, as evidenced by employees who feel that their
positions or jobs are threatened whenever innovation teams make progress. Having
an entire organization suspicious of the intention of the innovation team will only
contribute to a conflict of interest and the company’s downfall. To avoid such
situations, entrepreneurs and team managers should communicate to all employees
why the company needs innovations. Luthfa (2019) also noted innovations provide
organizations with a competitive edge because they can adapt to the ever-changing
market. To drive growth, firms actively communicate about innovations within an
organization.
Strategic uncertainty plays a significant role in causing innovation failure.
Innovation teams that ignore corporate strategies and goals fail most of the time.
Firms should ensure that those in senior leadership roles can effectively
communicate the company’s strategic goals (Medne et al., 2022). Innovative teams
can meet the firm’s goals and targets with a clear strategy. Innovative teams also
need to provide a firm’s management with the necessary feedback to inform
changes in the strategic goals (Johnsson, 2022). The constant communication and
feedback eliminate the strategic uncertainties that can hold back the potential of
innovation teams. Medne et al. (2022) proposed organizations should identify
stakeholders, define their intrinsic benefits, and design strategies to increase the
benefits to eliminate strategic uncertainty. These preplanned actions help
stakeholders demonstrate higher persistence toward implementing a firm’s specific
goals and vision. Johnsson (2022) noted continuous teamwork and strict plans
create proper synergy levels that enable innovative work among innovative teams.
This cooperation stimulates result integration and faster knowledge transfer in
innovation teams. Johnsson (2022) acknowledged companies rely on being the first
and best in developing innovation for commercial purposes. The faster the
knowledge is passed, the earlier these organizations avoid strategic uncertainties.
Promoting innovation in business is inherently complex because innovations
can only be partially predicted or planned. Bentley et al. (2021) examined the
complexity and uncertainty surrounding innovative projects within the agricultural
sector. The authors noted that businesses could overcome innovative uncertainties
by identifying potential innovation gaps, involving all stakeholders in innovations,
having flexible funds to seize potential opportunities, and anticipating changes
during the implementation phases of innovations. Shoemaker and Day (2018) noted
businesses should tolerate and encourage mistakes because it helps develop
adaptive strategies to innovation uncertainties.
Entrepreneurs should also identify uncertainties at the inception phase and help
change the result (Bentley et al., 2021). Shoemaker and Day (2018) argued
businesses should not stick to the known because stagnation limits their capabilities
to create new, innovative, and exciting products. Shoemaker and Day (2018) noted
businesses could not evade uncertainties because uncertainties form a significant
characteristic of future occurrences and affect present decision-making. The authors
further recommended that businesses promote trial and error and experimental
approaches to help businesses learn and overcome uncertainties.
Another form of uncertainty in innovation is commitment uncertainty.
Committing to an innovation project requires that employees commit to in-depth
research because the research guides the employees in turning an idea into
transformative innovations (Johnsson, 2022). Most employees are not prepared to
work more hours, especially when there is no compensation or evaluation. As a
result, an innovation team may become disinterested. Firms need to find creative
ways to motivate these teams (Salisu et al., 2019). One such way can be through
identifying and recruiting volunteers that want to be part of something bigger than
their day job (Johnsson, 2022). Additionally, a company can opt to include
evaluation forms that measure the value of employee innovation. This strategy
encourages employees to demonstrate innovation skills and improve an
organization’s outcome.
Salisu et al. (2019) evaluated the impact of employee commitment on
innovation strategy and SMEs’ performance. The two authors noted that SMEs that
engage in sustainable innovation increase their competitive edge and chances of
survival. Salisu et al. (2019) adopted a quantitative survey research design to collect
data from 229 managers and owners of SMEs located in Nigeria. The study
revealed that innovation involved a certain degree of uncertainty, especially if the
employees were not committed to the innovation process. Salisu et al. (2019)
posited that effective innovation strategies and increased SME performance depend
on an adequate level of employee commitment. Commitment also means that the
employees must be open-minded and eager to learn to encourage innovative
behavior (Johnsson, 2022). Leaders or top management must also be devoted to
providing the necessary resources to allow innovations to succeed. Salisu et al.
(2019) further posited that commitment uncertainty affects relationships between
employees and the organization and results in demotivated employees, which
negatively affects employees’ innovative behavior.
Managing Risks
Small businesses are the largest contributors to the American GDP (SBA,
2020). Surprisingly, small business owners lack the knowledge and experience to
manage risks created by the changing business environment. The focus should be
on helping these small businesses manage risks created by uncertainties to ensure
economic sustainability. Chen et al. (2022) examined the relationship between risk
management and business uncertainty. The authors recommended that entrepreneurs
and managers should actively seek the most accurate information about future
trends and patterns if their businesses are to survive. Chen et al. (2022) noted
entrepreneurs must continuously improve their enterprise management framework
to reduce risks and encourage innovation. All these strategies result in improved
competitive intelligence, market strategies, competitive position, and decision-
making capabilities under risk and uncertainty. However, decisionmaking under risk
and uncertainty differs, as discussed in the literature below.
Decision-Making Under Risk
Risk occurs when an entrepreneur takes a given course of action dependent
on known or estimated probabilities. Entrepreneurs need more control over the
consequences or outcomes of the action they intend to take. Eliminating risk is
arduous as one may reduce one risk and increase risks for other instances. An
entrepreneur must evaluate all feasible alternatives and their outcomes. Further, an
entrepreneur must explore and identify the optimal strategy that works with respect
to work factors. Yang et al. (2018) indicated managing risk plays a significant role
in building strong economies. Malewska (2018) revealed entrepreneurs need to
classify risks if they intend to reduce risk. Malewska (2018) indicated decision-
making under risk and uncertainty relies on incomplete information to realize
unknown outcomes. Thus, decision-makers should invest in proper investigations to
make better decisions under risk.
Decision-making under risk calls for entrepreneurs to evaluate different
options.
Sometimes, settling for a specific decision to eliminate risks may reveal other risks.
Entrepreneurs must conclusively evaluate all feasible alternatives and their possible
outcomes (Gul & Ak, 2018). Nevertheless, entrepreneurs must understand that risk
and return are positively related; the higher the risk, the higher the returns
(Malewska, 2018).
Gul and Ak (2018) recommended businesses calculate and quantify risks because it
provides decision-makers with the most efficient decision. Investing in programs
that help them quantify risks will help them make informed decisions.
Decision-Making Under Uncertainty
The COVID-19 pandemic, global shifts such as technological
transformations, evolving business models, and changing consensus on trade have
created an uncertain business environment. These uncertainties have forced
company executives to make slow and illogical or fast and superficial decisions
(Monitor Deloitte, 2020). To make decisions under these uncertainties, company
executives might wait and see, hedge their bets, or make flexible investments.
Shoemaker and Day (2020) recommended companies explore multiple outcomes,
emphasize organizational transformation, support research into new technology and
markets, build trustworthy reputations, respond quickly to consumers, and identify
predictable elements to inform their decisions. Sato and Altamirano-Cabrera (2019)
proposed scenario analysis as the best strategy to predict a wide range of future
possibilities. In scenario analysis, entrepreneurs or executives must identify a
scenario of the highest priority within a firm and identify long-term risk
management strategies to react to the situation before competitors do so.
Developing strategies to manage businesses successfully is complex because
of factors such as culture, managerial behavior, and personal characteristics that
significantly determine the orientation and strategies managers take while running
their businesses. Sakikawa (2022) defined resilience as the ability of an
organization to avoid, absorb, learn, and rejuvenate from shock and transforming in
a way that it can handle long-term changes, uncertainty, and stress. Fietz et al.
(2021) noted national culture affects organizational resilience. The authors
analyzed the North American Free Trade Agreement region to understand the
influence of culture on uncertainty avoidance and a firm’s resilience. Uncertainty
avoidance refers to how different societies or societies tolerate and react to
unpredictability or, in this case, business uncertainties. Fietz et al. (2021) noted
entrepreneurs from national cultures with high uncertainty avoidance feel
threatened by uncertain situations and tend to implement strict structures and rules
to avoid unpredictability. Entrepreneurs from low uncertainty avoidance cultures are
flexible, less formal, open to change, and willing to take risks.
Fietz et al. (2021) posited managers should be aware of cultural aspects to
develop organizational resilience, which helps businesses anticipate uncertainties
and recover from adverse situations. However, cultural differences do not limit the
flexibility of these managers to adapt to the evolving business environment.
Additionally, cultural uncertainty avoidance had minimal influence on approaches
adopted by managers. Entrepreneurs should not discriminate but involve individuals
from different cultural backgrounds in decision-making. This participatory
management style makes it easier to improve success probabilities as a company
draws information and knowledge from a vast pool of professionals (Wang et al.,
2022). Unfortunately, the study does not include individual personalities and
organizational culture while determining the influence of cultural uncertainty
avoidance.
Uzoamaka et al. (2018) defined uncertainty as a situation that lacks credible
outcome possibilities, is unpredictable, and the order of occurrence is unknown.
Uncertainties affect business operations’ implementation, planning, expansion, and
evaluation processes. Himounet et al. (2021) noted uncertainty was the primary
cause of the slow global recovery from 2007-2008 financial crisis in the U.S.
Uzoamaka et al. (2018) indicated decisions made under uncertainty involve a
degree of risk. For emerging markets, institutional changes and the interpretation of
these changes affect decisionmaking during the initial business stages. Uncertainty
cannot be clearly measured and managers have to rely on intuition that depends on
partial ignorance and guesswork (Himounet et al., 2021). Such situations favor
entrepreneurs or managers with high emotional intelligence. Uzoamaka et al. (2018)
focused on the performance of manufacturing firms in Southeast Nigeria. The
findings indicated that decision-making under uncertainty positively affected
manufacturing firms' financial performance, shareholder returns, and product
market performance in Southeast Nigeria. Uzoamaka et al. (2018) recommended
that organizations identify empirically supported strategies to increase shareholder
returns. By extension, managers should invest in market research to reduce the risk
associated with uncertainty and improve market share performance.
Transition and Summary
Section 1 included information about the problem that some entrepreneurs
in the food service industry lack strategies for reducing risks caused by business
uncertainties.
This section also included the literature review involving fundamental forms of
business uncertainties, decision-making in terms of uncertainty and risk, and
various conceptual frameworks small businesses can use to manage uncertainties. I
used interview questions to determine strategies some entrepreneurs in the food
service industry used to reduce risks created by uncertainties.
Section 2 contains information on the purpose of the study, my role as the
researcher, importance of ethical research, and support for the chosen research
design and method. This section also contains information about the data collection
process and an overview of the study’s reliability and credibility.
Section 3 includes study findings, recommendations, implications for social
change and practice applications, personal reflections, and a concluding statement.
Section 2: The Project
In this section, I included a restatement of the purpose statement and
description of my role as the researcher, participants, research design and method,
and data collection, analysis, and presentation. I used nine open-ended interview
questions directed to entrepreneurs. I used data to establish risks created by business
uncertainties and related themes. These themes helped me determine strategies that
entrepreneurs can use to reduce risks created by business uncertainties.
Purpose Statement
Through this qualitative multiple-case study, I explored strategies that
entrepreneurs in the food service industry use to reduce risks caused by business
uncertainties. The targeted population for this study was five food service
entrepreneurs within the Northeast region of the U.S. who have successfully dealt
with risks caused by business uncertainties.
Addressing business uncertainties can contribute to social change by helping
food service entrepreneurs reduce associated risks. Individuals seeking to open
businesses in the food service industry may use recommendations from this
proposed study to improve their chances of success and thereby improve profit
margins. Improved profit margins can contribute to positive social change by
increasing job opportunities, improving local economies, and improving people’s
living standards within Northeast region of the U.S.
Role of the Researcher
Researchers employ qualitative studies to explore feelings and thoughts of
respondents to develop meaning and understanding of their lived-in experiences.
Getting respondents to open up about their personal experiences is difficult as
people tend to hesitate to reveal their experiences. Researchers must assure
respondents that information is confidential (Quiles, 2021). This is a tenet of ethical
researcher that researchers need to follow. Researchers are responsible for
safeguarding information and study participants. The Institutional Review Board
(IRB) and relevant bodies have clearly articulated processes researchers must
review and follow before, during, and after the research process. As a researcher, I
familiarized myself with research ethics. Ethics refers to moral principles
researchers must adhere to at every time and place.
My role as a researcher as the primary research instrument was to ensure
that my work did not violate any IRB guiding principles. I obtained informed
consent, protected participants’ confidentiality and anonymity, minimized risks of
harm to participants, allowed respondents to withdraw from the research at their
discretion, and avoided deceptive practices. These principles promote fairness,
accountability, trust, and mutual respect and protect original ideas of researchers
(Michler et al., 2021). By enforcing these principles, the IRB promotes professional
behavior among researchers (Quiles, 2021). As the researcher, I ensured all
respondents signed written consent forms. Additionally, I ensured all respondents
fully understood applicable incentives, withdrawal procedures, and their role in the
study.
I was also responsible for data collection, analysis, and representation. After
getting approval, I ensured I used appropriate methods and tools for data collection
and analysis. The rationale for using interviews is to reduce bias and provide rich
information on the topic under study (Johnson et al., 2020). I prepared interview
questions acted as a guide for interviews. These questions followed a logical order
for ease of transition (Saunders et al., 2015). To avoid bias, I reported all findings
irrespective of whether they aligned with my views. I also used an audit trail
whereby colleagues and friends explored selection biases, examined judgments,
ensured data saturation, located omissions, assessed explanations, and reviewed my
interpretations.
Further, I sought participants’ validation by getting their views on how they
perceived the interview process and myself. I also used other individuals to help
code data to ensure interpretation consistency (Saunders et al., 2015). Additionally,
I made sure participants and I had no previous relationship. This sampling method
ensured I did not pick respondents who shared similar perspectives with me, as this
can promote personal bias (Johnson et al., 2020). As a researcher, I interacted with
respondents within the confines of the research process. Such honesty and
transparency reduces personal biases that affect credibility of research findings.
The 1979 Belmont report served as a guide that established ethical
principles that all research studies involving human participants must follow.
According to Anabo et al. (2019), three basic ethical principles for conducting
research studies involving human participants are; respecting persons, distributing
burdens and benefits (justice), and having the interest of the participants in mind
(principle of beneficence). Respect for persons involves protecting people with
diminished autonomy and treating them as autonomous agents (Johnsson et al.,
2020). Researchers must maximize benefits and reduce harm to human subjects via
the principle of beneficence. Lastly, the justice principle dictates fairness and
equality while selecting research subjects.
Participants
According to Patino and Ferreira (2018), researchers seeking to design
highquality research protocols must establish exclusion and inclusion criteria.
Inclusion criteria are characteristic that suitable participants for the study should
possess. Exclusion criteria are characteristics of potential participants that could
interfere with the study’s success (Patino & Ferreira, 2018). I specified participants
must own a business within the food service industry. Additionally, the business
must have been operational for the past five years. As mentioned earlier, most
businesses fail within the first five years. Interviewing entrepreneurs who have been
operational for over five years ensured I got necessary and rich information about
risks created by uncertainties these businesses have faced.
I intend to search for businesses that are over five years old with the help of
a colleague and over the internet. I randomly picked five food service companies
from the list and sought the audience of entrepreneurs who started those companies.
I made personal visits to introduce myself and provided an overview of my study
and informed consent process. I later followed up through calls and emails. I sent a
copy of the consent form and letter of acceptance to willing participants to sign and
return via email. The consent form explained the interview process and ethical
guidelines that ensured confidentiality of data as mandated by Walden’s IRB. I
created rapport with the participants and prioritized their comfort during the
interview process. Lastly, I set 60 minutes as the maximum interview length.
Research Method and Design
I used a qualitative multiple-case study design and interviewed
entrepreneurs to get an overview of risks created by uncertainties they faced while
in operation.
Research Method
Various reasons influenced my decision to use a qualitative approach for this
study, such as my philosophical view, literature available on the topic, and research
questions. My interest in this study was to explore strategies that entrepreneurs from
food service industries use to address risks created by uncertainties by
understanding experiences and views of successful entrepreneurs in this industry.
According to Saunders et al. (2015), qualitative approaches are helpful when the
researcher intends to understand and explore the meaning of a human or social
problem. My philosophical viewpoint was anchored in social constructivism,
whereby learning is viewed as an interactive process in which individuals gain and
develop knowledge through interactions. I used a qualitative multiple-case study
approach to get the thoughts, experiences, and feelings of entrepreneurs working
under different environments and conditions (Mohajan, 2018). I also conducted
semistructured face-to-face interviews held at open and more neutral places
(Saunders et al., 2015). Gill and Baillie (2018) noted qualitative researchers use
interviews as the best data collection method. These authors also noted that
interviews are easy to conduct and are good ways to seek opinions. Qualitative
interviews helps researchers explore matters that are unique to interviewees and
ensure readers understand phenomena as perceived and experienced. Researchers
also use qualitative techniques to investigate normative behavior, attitudes,
institutional perspectives, beliefs, and texts to expose knowledge in individuals’
minds. .
Researchers using the quantitative method tend to generalize findings or
explore relationships between variables. Quantitative methods incorporate closed-
ended questions to collect and test relationship between variables. As a result,
quantitative methods do not provide generalized data that thoroughly develop an
understanding of strategies that entrepreneurs can use to reduce risks created by
uncertainties (Gill & Baillie, 2018).
Mixed methods use qualitative and quantitative approaches to answer research
questions. Given the above argument, a quantitative approach was inappropriate;
thus, using mixed methods was also inappropriate. The type of data needed to
answer the research questions and identify strategies to reduce risks created by
uncertainties was also another reason why a quantitative approach was
inappropriate for addressing the research question (Saunders et al., 2015). The
qualitative approach is suited for this study because the study focused on why and
how a specific phenomenon existed. Researchers use qualitative studies to
understand how participants view the world. Furthermore, I used the interview
responses to generate helpful information on the strategies entrepreneurs within the
food service industry use to support sustainability and reduce risks created by
uncertainties.
Research Design
The research design refers to processes that link data to research questions
(Mohajan, 2018). Qualitative research designs include phenomenology, case study,
grounded theory, and ethnography (Saunders et al., 2015). For this study, I used the
multiple-case study to inform entrepreneurs in the food service industry of the
available strategies to reduce business risks: performance, competitive, and
financial risks created by business uncertainties and their impact on social change.
A gap in knowledge or our understanding requires that we seek explanation or
clarification in a systematic manner (Mohajan, 2018). Researchers use multiple-
case study designs when the study focuses on analyzing real-world issues and not
the respondents' lived experiences. This method provides insight and raises
awareness about the phenomenon under scrutiny, in this case, strategies for
overcoming business uncertainties.
According to Neubauer et al. (2019), phenomenology focuses on the lived
experiences of individuals and is a powerful approach for researchers who seek to
explore and inquire about challenging problems. Neubauer et al. (2019) noted
phenomenological research answers questions about what and how individuals
experienced a phenomenon. Data obtained from phenomenological research is often
large and disorganized because it involves large quantities of tape recordings and
interview notes. Thus, researchers must categorize data from phenomenological
research into key issues and themes without bias (Qutoshi, 2018). However, a
phenomenological design will only offer an understanding of the issue but will not
address the strategies entrepreneurs can use to reduce risks created by business
uncertainties. Therefore, I did not use phenomenological design for my study.
I could not use an ethnographic approach as this method involves engaging
the participants’ environment for years to clearly understand the themes, cultures,
motivations, and challenges (Mohajan, 2018). With this approach, the researcher
experiences the environment firsthand. For this research, I was not looking to
understand the essence of entrepreneurs’ experiences in guiding their businesses
toward success. I was looking to explore strategies through which entrepreneurs in
the food service industry can use to reduce risks created by uncertainty. Using a
multiple-case study approach allowed me to involve interviews, observe, analyze
documents, and engage participants to understand the study (Saunders et al., 2015).
The multiple-case study design was the best-suited method for this study. The
narrative research design is also ideal when forming cohesive stories from one or
two individuals. This design was inappropriate for my doctoral study as I needed
views for specific questions (Sim et al., 2018). The grounded theory approach seeks
to explain the theory behind an event. For my study, I looked to know about a
phenomenon rather than the theory behind an event.
The approach was inappropriate for this research.
Data saturation is a methodological principle that indicates further data collection
and analysis is unnecessary. Data becomes saturated when researchers explore numerous
data sources and repeatedly find similar instances without new information. A researcher
must reach saturation to maintain the validity of the research conducted. For qualitative
research, the depth of data is more important than sample size (Fusch et al., 2018). I
asked probing questions and conducted follow-up interviews to achieve data saturation.
A researcher should probe more about their interview questions (Fusch et al., 2018). I
repeated these steps until I reached data saturation where there was no new information
collected.
Population and Sampling
Population refers to the totality or aggregate of members, objects, or
subjects that conform to specific study or research guidelines (Gill & Baillie, 2018).
I interviewed approximately 5 entrepreneurs in the food service industry currently
running a business in the Northeast region of the United States. Chishimba (2018)
noted using 5 participants and member checking in a research study helps achieve
data saturation. Each interviewee had run their food service business for more than
5 years and had strategies that they had used to address risks created by
uncertainties. To ensure that these individuals meet the criteria, I emailed and called
them to verify if they had the experience to answer the interview questions. I then
invited 5 of those participants that had met the qualifications.
Obtaining information from an entire population is an impossible task.
Luckily, sampling enables researchers to collect a sample of the population that is
representative of the rest. Sample sizes used in qualitative studies are smaller than
those used in quantitative studies to support in-depth case-oriented analysis.
Dworkin (2012, as cited in Sim et al., 2018) noted many books and articles
suggested and recommended sample sizes of between 4 and 30 as adequate for
qualitative case studies. I interviewed 5 participants and achieved data saturation.
Yin (2018) noted that careful sampling, small interview numbers, and strict data
collection techniques could yield the answers to one’s research question.
Researchers use purposeful sampling in qualitative studies to identify
information-rich samples that provide an in-depth view of the phenomena under
research
(Shaheen et al., 2019). I used purposeful sampling to identify experienced and
knowledgeable individuals running small restaurants within the food and service
industry in the Northeast region of the United States. Researchers also use
purposeful sampling to generate validity and credibility (Shaheen et al., 2019). For
this research study, I got entrepreneurs who have successfully run their small food
and service businesses in the past five years. This criteria helped me choose the
most experienced entrepreneurs from a large pool (Saunders et al., 2015). I also
needed participants who were available, willing to participate, and could clearly
articulate their opinions and experiences. Using purposeful sampling was
advantageous because I got information-rich responses from willing participants.
I sent the participants the consent forms, sample interview and research
questions, and procedures for the study before the date of the actual interview. The
respondents chose areas where they felt relaxed to engage in the exercise. I
provided each participant with a means to contact Walden IRB staff to confirm the
authenticity of the research.
Additionally, I informed the respondents that their participation was voluntary and
that they could withdraw at any time from the interviews for any reason.
Ethical Research
Ethical issues are at the forefront of social research, with the increasing
concern about legislative changes and inquiry limits researchers must abide by
(Bos, 2020). These issues challenge researchers on what constitutes the right ethical
decisions. Humans research to contribute to knowledge that results in the
progression of society (Shaheen et al., 2019). This knowledge is valuable when
shared with scholars and other individuals. Researchers must also conduct research
processes morally and soundly as ethical principles dictate (Bos, 2020). Ethical
considerations ensure that research works to protect the welfare, rights, and dignity
of research participants. Ethical research regulates research processes by ensuring
that researchers maintain acceptable, moral, and legal behavior.
I used the Belmont Report to guide my research for this study. Belmont
Report contains ethical guidelines that detail how to treat research participants
justly and ethically. It also details the academic freedoms accorded to researchers
(Bos, 2020). Ethical guidelines help researchers focus on upholding intellectual
rights of other researchers (Johnsson et al., 2020). It also focuses on plagiarism,
data falsification, sponsorship, beneficence, advocacy, and safety, writing and
publishing rights, deception, confidentiality, informed consent, and vulnerable
groups. I discussed these issues in depth to ensure that the readers understood how
each ethical guideline relates to my research study.
The Belmont Report has three basic ethical principles: respect for persons,
beneficence, and justice. The respect for person principle indicates that participants
are entitled to their choices and opinions (Anabo et al., 2019). According to this
principle, not all participants can have self-determination and such individuals
require protection (Johnsson et al., 2020). The accorded protection depends on the
risk of harm and associated benefits (Anabo et al., 2019). The respect for person
principle indicates that participation should be voluntary and that participants
should have adequate information on the particulars of the research study to make
an informed decision.
The beneficence principle ensures that researchers treat all participants
ethically by making it an obligation. This principle emphasizes that researchers
need to minimize or eliminate the risk of harm while maximizing benefits (Anabo et
al., 2019). Researchers seek to add knowledge and associated long-term benefits
that all members of society can enjoy. As such, society should help in the
development and improvement of knowledge (Coleman, 2021). Such an obligation
helps participants understand their importance in minimizing the risk of harm and
maximizing benefits. Researchers must explain the principle of beneficence to all
participants to ensure they provide the correct information.
The third principle is justice, which notes that researchers are ethically
obligated to fairly distribute burdens and benefits associated with their studies
(Anabo et al., 2019).
According to the principle of justice, researchers must never exclude or exploit the
vulnerable without reason. The researcher must justify including vulnerable groups
as warranted and not a matter of convenience (Bos, 2022). I followed these three
principles and maintained the required ethical standards for my research study.
Voluntary and informed consent is an essential requisite for any research
study. Voluntary meant I could not coerce the participants into participating in the
research process. Before conducting any interviews, I issued several documents,
including a confidentiality agreement, a letter of cooperation, and an invitation
letter to all participants (Bos, 2022). The invitation letter explained the research
process, purpose and use of research, the fact that participation did not include
incentive, rewards, gifts or payment, and the privacy measures I had taken to
protect the participants. Incentives encourage biased enrollment, undue inducement,
and exploitation. Biased enrollment occurs when participants from lower
socioeconomic status enroll at a higher rate than wealthy participants. Offering gifts
or incentives undermines participants’ autonomous decision-making because it
encourages financially-motivated choices rather than their better judgment
(Różyńska, 2022). Some researchers may also take advantage of participants by
offering low wages compared to the economic benefits of the research.
The incentives may also encourage a participant’s tendency to frame situations
which results in exaggerated findings.
I also provided informed consent forms to the participants explaining their
participation is voluntary and they can withdraw from the interviews at any time
without consequences or giving reason(s). The informed consent form had my
contact information for any concerns or questions participants might have had
(Johnsson et al., 2020). Participants signed the form to acknowledge they
understood the guidelines and had agreed to participate (Bos, 2022). I also ensured
participants had sufficient information on the research procedure and allowed them
to ask questions. Withholding information or misleading participants is an
unacceptable form of deception. All these protocols ensured that I was in line with
the Belmont report’s principle of respect for persons.
Another primary responsibility of a researcher is to ensure confidentiality or
anonymity. I protected data and information I collected from all participants during
the interview process as dictated by the Walden University core values of integrity
and quality. I stored interview notes, consent forms, transcripts, and interview
recordings on my password-protected computer, which is only be accessible to me
(Bos, 2022). I ensured I stored all hardcopy information in a locked area only
accessible to me. Offering incentives depicts a lack of respect for the autonomy of
persons (MacKay, 2022). I avoided such bias by ensuring participants understood
that there were no incentives for their participation. Lastly, I ensured I did not use
the participants’ real names for any aspect of the research study or publications to
protect participants' privacy. I used codes such as R1, R2, and R3 to refer to
participants to protect their privacy. I ensured details that might identify the location
of the restaurants remained private.
Data Collection Instruments
For this study, I was the primary data collection instrument. I gathered
firsthand experiences of entrepreneurs and got answers to specific questions as
guided by the interview questions. Primary data refers to information collected from
participants’ firsthand experiences with a given phenomenon and is objective,
reliable, and authentic
(Ruslin et al., 2022). I served as this qualitative research study’s primary data
collection instrument. I conducted semistructured interviews in this multiple-case
study to understand and determine strategies entrepreneurs can use to overcome
risks created by business uncertainties. The qualitative data collected was in the
form of sentences and words that captured participants’ subjective perceptions,
feelings, or emotions on a given topic (Taherdoost, 2021). These interviews were in
the form of face-to-face conversations with participants. For those who were not
comfortable with such an arrangement, I used the zoom online platform they
deemed user-friendly. I conducted in-depth interviews with five entrepreneurs
within the food service industry in the Northeast region of the U.S.
There are three major types of interviews: structured, unstructured, and
semistructured (Taherdoost, 2021). Structured interviews are interviews that strictly
follow given protocols to guide the researcher. These types of interviews are rigid;
as such, the researcher is not allowed the freedom to explore or probe further.
However, researchers can use a comprehensive list of interview questions that help
them target specific experiences under research (Ruslin et al., 2022). Unstructured
interviews have no format as they follow a conversation-based format with no
written interview questions. Researchers must establish rapport with interviewees to
ensure they obtain beneficial information. Researchers using unstructured
interviews must conduct several interviews to ensure they obtain necessary
information (Taherdoost, 2021). Semistructured interviews follow a given interview
protocol incorporating a written list of questions. I used semistructured interview
questions to probe further for any additional information.
For my study, I used the semistructured interview technique to collect
necessary information. This semistructured interview incorporated a conversational
aspect that allowed me to probe further for any information I considered helpful for
the study (Ruslin et al., 2022). I used a set of written interview questions to direct
the conversation. I had compiled a list of nine interview questions related to the
conceptual framework and research questions that I used to ask each of the five
respondents (Appendix A). I used notes that I read to my respondents at the end of
the interview to reduce errors in presentation (Johnson et al., 2020). The purpose of
reviewing notes to the respondents was to ensure the notes reflected accurately
answers they provided during the interview. Using this transcript review strategy
helped me reduce my personal biases and data falsification.
Semistructured interviews are topic or thematic-centered or follow a
narrative approach where a researcher must discuss or cover specific topics or
themes (Ruslin et al., 2022). For this study, I ensured all my interview questions
were open-ended and lasted a maximum of 60 minutes to ensure interviewees
maintained interest in the process. I allowed for the flexibility of interviews by
conducting interviews at places convenient to the respondents to help interviewees
feel safe and comfortable and contribute to collecting quality data (Taherdoost,
2021). Open-ended interviews allowed participants to talk freely, clarify, and even
ask follow-up questions themselves. This process helped develop research-related
themes.
Qualitative researchers must strengthen the reliability and validity of their
interview protocols prior to conducting them. This process helps increase the
quality of data I obtained from the interviews. Qualitative researchers must ensure
the interview questions align with the primary research question (Taherdoost, 2021).
I had my chair and colleagues review my interview and research questions for this
study. The two groups found the questions necessary and would help the
participants explain their experiences. I also developed open-ended interview
questions that allowed me to converse with the interviewees and probe further for
answers (Bushle et al., 2021). I also had my chair check the suitability and if
participants could easily understand the interview questions. Through their
feedback, I revised the vague and confusing questions and developed precise,
simple, and understandable interview questions. Lastly, I conducted a field test to
try out my recording devices and simulate consent, timing, recording, and rapport
with my research study supervisor. These experiences prepared me for the actual
interview. The experiences also helped me improve my interviewing skills, crucial
to obtaining quality data. All these processes help me refine and develop reliable
and valid interview protocols.
I made notes and recorded responses to enhance the reliability and validity
of my findings. Record keeping was essential as it allowed participants and I to
review the interview questions (Noble & Heale, 2019). It also provided an
opportunity for future reference if the need arose. I stored the recordings and notes
in a safe place only accessible to me to protect the privacy of the interview
respondents (Taherdoost, 2021). I also sent all participants a summary of the
interviews with my interpretations and requested them to member-check whether
the interpretation represented their feelings, thoughts, emotions, and opinions.
I also used data triangulation from multiple literature review sources to
validate the data collected. Data triangulation refers to using more than one method
by qualitative researchers to establish and check the validity of their work (Noble &
Heale, 2019). Researchers use data triangulation to capture the different dimensions
of the phenomenon under research (Yin, 2018). As the primary researcher in this
study, I used data triangulation to verify the research study by comparing the
findings with data from small business websites, social media, and promotional
brochures describing risk reduction strategies, thereby increasing its validity. I used
triangulation by using multiple perspectives to construe the study’s data set and
achieve data saturation (Yin, 2018). I conducted a follow-up interview to discuss
my interpretations of the answers with the participants. To achieve data
triangulation, I reviewed multiple sources such as peerreviewed scholarly journals,
books, scholarly articles, face-to-face interviews, and observations to support the
research design, findings, claims, and decisions herein. I used the data collected to
establish common and relevant themes related to business uncertainty strategies
from the interview recordings and notes. The study findings aligned with the major
tenets of Meijer’s classification tool, UMT, and ERM theory, which indicated that
the study was valid. I also documented the participants’ reviews. All these processes
helped me collect high quality data.
Data Collection Technique
Qualitative researchers prefer to use data collection techniques that are less
structured and more open-ended (Barrett & Twycross, 2018). One such technique is
semistructured interviews. Interviews allow researchers to conduct in-depth analysis
which brings forth new insights and evidence from participants on the phenomenon
under study. The semistructured interviews are ideal for obtaining comprehensive
knowledge from participants because communication is two-way (Yin, 2018).
Researchers use semistructured interviews to learn the reasons behind interviewees’
answers.
Semistructured interviews give participants enough time and space to respond to
sensitive issues. However, using semistructured interviews has challenges. Yin
(2018) noted the possibility of a participant misunderstanding questions within a
semistructured interview. Another disadvantage of using semistructured interviews
is the interview may take longer than earlier scheduled. Even so, the benefits of
semistructured interviews outweigh the disadvantages, and qualitative researchers
should continue using them to obtain comprehensive knowledge of phenomena
under research.
For my research study, I used semistructured face-to-face interviews to
explore and determine strategies entrepreneurs use to address risks created by
uncertainties. It is also essential for a researcher to establish a healthy working
relationship with participants. A confident participant is a plus for the interview
process. As such, I disclosed all information related to the research process as an
assurance of goodwill to participants (Fusch et al., 2018). Individuals who are
relaxed, comfortable, and at peace tend to give open-ended responses rather than
one-word answers (Saunders et al., 2015). Creating rapport in interviews as a data
collection technique helps the researcher avoid miscommunication and distortion
during data collection. Additionally, using the semistructured open-ended interview
questions helped me get a better and deeper understanding of strategies
entrepreneurs used to reduce risks created by uncertainties.
I used member checking and data triangulation to check resonance of my
interviews with respondents’ experiences and accuracy of data (Fusch et al., 2018).
For the data triangulation, I researched several scholarly and online sources to
cross-check data and avoid bias if participants are unresponsive or emotional to the
interview questions. I compared this information with participants’ responses to
determine a point of convergence of information. Member checking is one factor
that determines data credibility (Gill & Baillie, 2018). Member checking involves
sharing either a brief or whole summary of research findings with participants. I
ensured participants reviewed my notes, recordings, and findings to ascertain what I
had genuinely reflected in their opinions and truths they hold. Sharing the data
enhanced the trustworthiness of the study and also helped me clarify any ambiguous
answers provided by participants. Memberchecking and data triangulation enhanced
the validity of my study.
A quality research report depends on asking the right questions.
Inexperienced researchers may need help developing the right qualitative interview
questions (Yin, 2018). Field testing allows researchers to practice interviewing and
test soundness of the questions. Field tests help the researcher identify flaws or
limitations within the interview protocol and allow enough time to make necessary
modifications. Buschle et al. (2021) argued field test interviews do not require IRB
approval because the researcher does not collect data during this stage. For this
study, I conducted a field test with subject matter experts to ensure content validity.
The process helped refine my interview protocol and mitigate research bias, which
was critical to obtaining quality data.
A researcher uses interviews to control the order of questions and allow
greater flexibility (Saunders et al., 2015). Additionally, interviews have better
response rates when compared to mailing respondents. The researcher must ensure
that personal biases do not affect the validity and credibility of the process. For this
study, I followed the systematic interview protocol detailed in Appendix A.
Interviews follow five main steps:
introductions, small talks, information gathering, question-answer section, and
conclusions. For my research study, I used the following interview protocol (See
Appendix B). I prepared a notebook to note important details such as non-verbal
cues. I then introduced myself and set the stage for the interview by creating some
form of rapport with the respondents (Yeong et al., 2018). I also recorded and
paraphrased the answers from the respondents. These answers helped me probe
further whenever necessary. Once I was through with the interview questions, I
concluded and thanked the respondents for their time and knowledge. I also
inquired about an appropriate time participants can be available for follow-ups or
member checking.
Data Organization Techniques
Data organization is classifying and categorizing data in a usable, orderly,
and logical manner (Hartson & Pyla, 2019). All research works rely on a large
amount of data that, if not properly arranged or stored, would confuse people with
access to the research data. According to Hartson and Pyla (2019), data organization
is an essential aspect of concept mapping, whereby the researcher builds an audit
trail. It makes data interpretation and analysis easy and ensures high-quality
findings (Hartson & Pyla, 2019). Additionally, data organization techniques help the
researcher remain focused on the research task. Organizing all my interview
research data helped me attain high-quality research findings.
I intended to determine strategies entrepreneurs can use to address risks
created by business uncertainties. To explore these strategies, I used open-ended
interview questions. I ensured data from these interviews was safe as I secured it
into my passwordprotected laptop. I used the Microsoft Excel program because it is
cheap, efficient, and saves time. Moreover, excel simplifies the organization,
analysis, identification, and thematization processes. I coded data into themes to
reduce data and create search aids for data that was in the form of hours of audio
recordings and interview transcripts. The Microsoft Excel software helped me
reduce the large amounts of data into smaller packages arranged by themes relevant
to the research topic.
I stored all raw data and documentation on my password-protected private
computer that is only be accessible to me for five years. I used data for my research
study to protect the interviewees' confidentiality. I then stored the data safely and
securely on my password-protected laptop for five years. After five years, I will
destroy the data.
Data Analysis
Through this research, I established strategies entrepreneurs within the food
service industry have used to reduce risks created by business uncertainty. I used
thematic analysis to analyze the raw data I collected from interview notes and
transcripts and compared with the literature and conceptual frameworks. Thematic
analysis is a technique in which the researcher identifies patterns in data (Linneberg
and Korsgaard, 2019). These patterns or themes answer the research questions
posed. I read the interview transcripts extensively to familiarize myself with data.
After familiarizing myself with data, I generated initial codes by identifying central
concepts as dictated by associated conceptual frameworks and literature review
(Kiger & Varpio, 2020). As the primary data collector, I analyzed meaning of whole
paragraphs, sentences, phrases, and words related to the research questions and
objectives to develop codes. For the next step, I used the codes to extract broader
themes with significant meaning to the phenomenon under study. For this process, I
sought help from others and used excel to review the themes. In the last step, I
defined themes and developed a thematic map showing all possible relationships.
The developed themes helped me develop meaningful strategies to reduce risks
created by uncertainties.
Linneberg and Korsgaard (2019) noted analyzing qualitative data is
challenging as researchers must deliberately identify themes and codes that answer
the research questions and objectives. The authors noted researchers must
deliberately ensure the act of coding remains transparent. Researchers must
structure data by considering its relevance, importance, and accessibility for
subsequent data analysis (Kiger & Varpio, 2020). To achieve this objective, I broke
my interview data into themes using the Excel software. The rationale for using
Microsoft Excel was to provide structured and organized approach to analysis and
save time. I derived and compared the themes from current and past literature
reviews of the phenomenon under study. I established a clear pattern with the
interviewees’ responses to obtain some semblance of data undeniability (Linneberg
& Korsgaard, 2019). I derived these patterns by focusing on themes correlated to
the literature review, conceptual frameworks, any new studies, and analysis of data.
After proper analysis, I revisited all the categorized data (codes and themes) to see
if I could trigger other analytical ideas from recollections and selective impressions.
Reliability and Validity
Researchers face numerous challenges that negatively influence data and results.
If not fully addressed, these challenges affect the reliability and validity of a study.
Researchers must meet specific data quality dimensions to make their studies fit for
use.
According to Yin (2018), any research study must have a clearly outlined and systematic
flow that depicts researcher’s academic rigor, which is synonymous with high-quality
research findings. I was thorough with my study to ensure it is credible, dependable,
trustworthy, confirmable, and transferable.
Reliability
The quality of qualitative studies depends on the validity and reliability of
the method used (Saunders et al., 2015). There are numerous definitions of
reliability, but for this study, I will refer to consistency and repeatability of the
research findings (Coleman, 2021). I provided substantial details of each phase of
my research study, design and data collection and analysis. I used well-ordered,
scalable, and repeatable sound practices that can replicate the same results if used
by other scholars or researchers, such as interview transcripts, field notes,
accounting for research and personal biases, and meticulous record keeping
(Coleman, 2021). To further establish the dependability of this research study, I
conducted a field test before the actual interview. The field test helped me develop
valid interview questions for the research topic. It also helped me avoid bias,
ambiguity, and repetition and improve the authenticity of the interviews by
adjusting the language and word choice ((Linneberg & Korsgaard, 2019). The field
test also helped me correct mistakes I might have made when collecting,
conceptualizing, and interpreting
data.
Using member checking and triangulation increases the dependability of the
interview process by confirming the accuracy of the field data. I provided each
study participant with my interpretations, supporting data, recommendations, and
findings.
Sharing this information allows the participants to affirm what I have is accurate as
per their thoughts and experiences. It also shows that, as a researcher, I am prepared
to exhibit the highest standards of honor and integrity (Saunders et al., 2015). To
further strengthen the dependability of my research study, I maintained a meticulous
record of all data collected and ensured data interpretation is transparent and
consistent (Coleman, 2021). I also accounted for personal biases. To increase
dependability of the study, I have included in detail the rationale for using a
qualitative case study design and semistructured interviews. I also included the
interview protocol which acts as a guideline for the interview. Ensuring the
interview questions aligned with the research question further enhanced the
dependability of the study.
Validity
Validity refers to the degree of accuracy, appropriateness, and
generalizability of the methods used, and the results obtained (Saunders et al.,
2015). There are three aspects of validity: measurement, external, and internal.
According to Saunders et al. (2015), internal validity ensures a study is consistent in
using various researchers to collect, evaluate, and analyze data. External validity
refers to the consistency of the findings whereby the results are applicable outside
of the test (Yin, 2018). That means that a different researcher can replicate the
findings for the same results. The measurement validity assesses a research study's
criterion, content, and construct. Researchers must ensure the study’s content
matches instructional objectives (Yin, 2018). In addition, to achieve construct
validity, researchers must use different forms of converging evidence.
For a qualitative study, validity refers to data transferability, confirmability,
and credibility (Fusch et al., 2018). Credibility refers to confidence in the
trustworthiness and believability of research findings. One way of enhancing
credibility is member checking which helps validate data gathered through the
interview process (Yin, 2018). I used member checking to enhance the credibility of
the interpretation and address findings from the participants’ viewpoints.
Transferability refers to the possibility that future researchers and readers can use
the research findings for their studies (Kyngäs et al., 2020). To enhance
transferability, I made sure I provided a thick description of the research design and
methodology, interview protocol, interview questions, participants’ data, conceptual
frameworks, and findings. The thick description was crucial as it ensured readers
understood my study, its purpose, application, and where to incorporate it in future
studies (Yin, 2018). Thus, it will be easy for them to decide which parts of my
research study can fit into their future studies.
Confirmability refers to a research study's accuracy, validity, and truth.
According to Kyngäs et al. (2020), researchers can improve the confirmability of
qualitative studies through triangulation, audit trails or diagrams, the admission of
assumptions, limitations, and beliefs, and the in-depth methodological description.
For this study, I stated any assumptions made and used the member-checking
approach to ascertain my study's confirmability. I used the triangulation of multiple
sources to establish the confirmability of my study. Having multiple sources that
support my findings and research topic is a good measure of credibility and validity
(Noble & Heale, 2019). Triangulation is an important aspect that helps researchers
develop a comprehensive understanding of the phenomena under study. I used two
conceptual frameworks to help interpret data I collected during the interviews. The
credibility of a research study increases if repeated observations suggest similar
findings.
Data saturation occurs when a researcher can no longer find new data or
themes while examining the data sources within the study. Researchers arrive at
data saturation through the abundance and richness of the research information
regardless of the sample size (Yin, 2018). To achieve data saturation, I took the
steps listed below. I gathered relevant research articles to guide my interview
process, data collection, and presentation. I collected rich and informative data to a
point where further data collection does not yield new information (Saunders et al.,
2015). I also probed further during the interviews to ensure that the respondents had
no new information on my research topic. I repeated these steps until I reach data
saturation. All these processes helped me achieve data saturation for the research
study.
Transition and Summary
Section 2 contains information on the purpose of the study, my role as the
researcher, importance of conducting ethical research, and support for the chosen
research design and method. This section also contains information about the data
collection process and an overview of the study’s reliability and credibility. I carried
out semistructured interviews with five entrepreneurs within the Northeast region of
the U.S. to determine strategies that entrepreneurs can use to address risks created
by business uncertainties. I made official communications and set dates for
interviews. I also made time to inform all participants about the interview process
and sought their consent. I also created secure electronic files to store data from
interviews. Securing such data helped with data analysis and the member-checking
approach, which was essential for establishing my study’s validity, trustworthiness,
and integrity.
Section 3 includes study findings, recommendations, implications for social
change and practice applications, personal reflections, and concluding statements.
Section 3: Application to Professional Practice and Implications for Change
This section contains a summary of findings, overview of the study,
possible implications for social change, application of the study to
professional practice, and recommendations for action and further research. I
also provide a reflection and conclusion of the study.
Through this qualitative multiple-case study, I explored strategies
entrepreneurs within the food service industry can use to reduce risks created by
business uncertainties. Data analysis included interviews with entrepreneurs
who have run their food service outlets for over five years. Findings revealed
business uncertainties, associated risks, and strategies these entrepreneurs used
to prevent businesses from failure and increase their longevity.
I gathered, reviewed, and analyzed interview data from five
entrepreneurs. I explored literature from different scientific and academic
sources to identify themes and codes associated with the research. I used
Excel to code themes that were relevant to the study. All participants agreed
that to understand strategies entrepreneurs can use, entrepreneurs had first to
understand various forms of business uncertainties and associated risks.
Findings adequately answered the research question. This section includes
results and related literature.
Presentation of Findings
The overarching research question for this study involved strategies
entrepreneurs in the food service industry use to reduce risks created by business
uncertainties and support sustainability. Data for the study was from interviews,
observations, and existing documents such as risk registers, contingency plans, and
business plans. The study will help other businesses in the food industry understand
risks and uncertainties and assist entrepreneurs in terms of understanding strategies
to support sustainability. Participants answered eight open-ended questions that
were instrumental to gathering information from their perspectives.
Findings included strategies entrepreneurs in the food service industry use to
reduce risks created by business uncertainties. I also reviewed risk registers,
contingency plans, and business plans of five small businesses to identify the risks
and strategies they have used. I also used transcript review, and each participant
attested to the accuracy of transcripts. I interpreted data using the ERM framework
to address operations, and strategic and financial risks. I also interpreted strategies
using the UMT to address risks through information sharing and avoiding. I
identified six key themes entrepreneurs in the food service industry use to reduce
risks created by business uncertainties. Eight major themes emerged from data
analysis: financial planning, diversification, quality control, environmental,
technological, resource, political, and competitive uncertainties.
Through this research study, I added to the body of knowledge regarding
strategies entrepreneurs can use to sustain their businesses for a long time. I
reviewed recent literature and compared it to findings from interviews. Findings
from interviews indicated that food and service businesses faced uncertainties such
as COVID-19, inadequate finances, changes in technology, evolving customer
preferences, competition, changing government policies, and misappropriation of
finances. These problems can be classified as financial, technological, resource,
political, customer, and competitive uncertainties. Therefore, entrepreneurs need to
address these issues to improve their productivity and survival rates.
Key Themes
There was a consensus among participants regarding risks created by
uncertainties that they faced while running their businesses. Participants largely
mentioned challenges related to financial inadequacy, competition, government
policy changes, mismanagement of funds, evolving customer preferences, and
technological advancements.
Financial Management
Financial uncertainty affects investment decisions as entrepreneurs tend to
delay expanding or investing. Lestari (2021) noted making financial decisions
during uncertainties is challenging for both the government and individuals.
Financially literate individuals tend to make better decisions and strategies. These
strategies help individuals and organizations reach more favorable financial
outcomes. These findings are in line with findings from my interviews. The
consensus among participants was that small businesses must have effective
financial management strategies involving fair resource allocation, proper
budgeting, and maintaining financial reserves for emergencies in order to survive.
There was consensus regarding the need for entrepreneurs and employees to
prioritize and control finances to reduce failure rates among small businesses
(Jayasekara, 2020). Small businesses must plan, organize, direct, and control all
financial undertakings to overcome business uncertainties. R3 and R4 noted small
businesses need to have effective financial systems and avoid high debts. R5 noted
firms should have financial buffers for emergencies and financially literate
individuals running operations. R1 stated businesses should make right financial
decisions.
Community and Professional Networking
Having networks can help overcome crises, especially when facing resource
constraints. Having a support system helps entrepreneurs respond and even benefit
from crisis-induced uncertainties (Brändle et al., 2022). Entrepreneurs in crisis
primarily interact with individuals within their professional network to further their
interests. Participants noted they tended to collaborate with peers and professionals
within the industry as valuable sources of advice and support. Small business
entrepreneurs should seek other entrepreneurs in their industry to get useful insights
regarding best practices and risk management strategies (Lestari, 2021). R4 used
more experienced industry leaders and experts as a barometer to help prepare for
change, including regulation changes, and monitor regulations and government
mandates. R4 stated, “There is also the aspect of collaborating and networking with
other peers in the business. Again, I tried to stay informed to avoid legal issues and
penalties that would have diverted my funds.”
Diversification of Products and Services
Entrepreneurs desire to have sustained improvement and growth for their
businesses. One way of achieving sustained growth is through product and service
diversification. Diversification involves offering a new line of a service or product
to expand or ensure business survival. Such diversification also improves business
image and profitability. The food and service industry is dynamic, making it
difficult for individual firms to maintain their competitive positions. Enobong et al.
(2022) noted firms tend to diversify into unrelated and related businesses to
improve their competitive position, sustainability, and market visibility in the long
run. Participants indicated diversifying their products and service ranges helped
their businesses improve their performance and gain competitive advantage. R5
stated “Diversify the products so that you are always in business at all times.” R3
stated “Again, I diversified my products to meet customers’ preferences.”
Diversification of products and services helped participants adapt to risks created by
uncertainties.
Leveraging Technology
A lot of uncertainties existed during Covid-19 pandemic. According to
Abdelwahed and Soomro (2023), COVID-19 pandemic caused different economic,
societal, and environmental risk and uncertainties. These uncertainties affected
policymakers creating further uncertainties on decision making capacities. The
pandemic damaged various sectors especially business start-ups (Abdelwahed &
Soomro, 2023).
People were not sure what would happen to the world because of the restrictions set
by the governments around the world. Kumar and Ayedee (2021) posited small and
medium enterprises to adopt technology such as e-commerce and social media
platforms to solve problems during COVID-19 pandemic. The researchers also
noted entrepreneurs had to consider perceived usefulness and ease of use of
technology, and their willingness to facilitate the adoption of the technology they
chose. These assertions aligned with participants’ responses regarding embracing
technology to stay competitive and manage the uncertainties. For example, R5
stated “One is leveraging technology for contactless payment, online ordering and
adapting to changes in consumers preferences.” R3 stated
“A good example is going contactless since the onset of COVID.” These
interviewees noted that they adopted technologies such as online ordering systems,
contactless payment methods, and leveraged online platforms for marketing and
delivery services.
Employee Engagement and Training
Businesses need to build internal capacity and competency to survive in
today’s dynamic business environment. Entrepreneurs must ensure employees are
committed towards business objectives. Failure to motivate employees leads to high
turnover rates that burden organizations with high costs of hiring and training new
employees.
Prioritizing employee engagement improves productivity, efficiency, and
effectiveness
(Muzeyin et al., 2022). R1 stated “It’s really spending time with our employees,
educating them on how to handle customer interactions.” R3 also stated “I also try
to keep the employees motivated and offer bonuses once in a while especially when
the profit margins are high.” Entrepreneurs should create work environments that
spar high level of interest and dedication. Muzeyin et al. (2022) argued businesses
must develop good, rewarding work-related frameworks. Participants emphasized
the importance of having motivated and skilled employees. Participants noted
training programs were good examples of reward systems. Participants noted
training programs should focus on improving communication, teamwork, problem-
solving, and crisis management skills, all of which are essential for managing risks
created by business uncertainties. Training programs create positive attitudes among
employees essential to developing effective strategies for dealing with risk created
by uncertainty.
Market Research and Customer Feedback
Customer satisfaction is a great predictor of customer behavior and
company profitability. Businesses engage in market research to identify research
information such as market segmentation, customer habits, track customer
satisfaction, evaluate pricing tactics, and develop new products (Bilro & Loureiro,
2022). Understanding customer behavior and satisfaction helps businesses uncover
reasons and thought processes involved when making purchase decisions.
Businesses use this information to predict consumer action. Market research
coupled with listening to customer feedback helps businesses develop products and
mechanisms that suit the target tastes and preferences (Bilro & Loureiro, 2022).
Findings from interviews indicate entrepreneurs need to listen to customers. R1
stated “I mean here we really focus on the customer experience and making sure
that the customer always has a great experience.” Feedback is essential for adapting
to changing market conditions and evolving consumer preferences. Listening to
customers improves customer retention and satisfaction because they feel that
businesspeople value their opinions. Entrepreneurs must also plan and conduct
market research to understand customers’ needs and tailor their marketing activities.
Government Policy Compliance
Policy uncertainties cause disruptions that delay progress of all businesses.
Lei and Luo (2022) noted political and policy uncertainties affect capital flows,
economic recoveries, and business cycles. These policy uncertainties negatively
impact on information asymmetry by decreasing accuracy of information forecast.
Additionally, these uncertainties allow managers with opportunities to distort
nonfinancial and financial information (Lei & Luo, 2022). Multiple laws and
regulations govern businesses in the United States. Failure to comply with these
government policies puts enterprises at risk. Participants noted entrepreneurs who
wish to succeed must comply with government regulations and policies to avoid
legal issues and penalties especially by collaborating with local authorities and
following guidelines to reduce political uncertainties. R1 stated “You, know, the
other uncertainties are you know largely just with dealing with regulation and
government interference in everything that we do.” R5 stated “I have to watch any
changes in the policies that the government might intend to put across.” Participants
noted applying a defensive strategy such as relying on adaptability and flexibility is
an acceptable response to policy uncertainties.
Open Communication
Information flow is critical during times of uncertainty. Employees rely on
their employers for trusted information. Leaders who foster open communication
with their employees showcase their willingness to solve organizational problems
and grow the company. Healthy and open communication revitalizes resilience,
strengthens bonds, and accentuates positive relations among individuals within an
organization (Kalogiannidis et al., 2023). It also improves the general well-being of
individuals who make decisions, which is essential for navigating uncertainty. This
information is consistent with participants’ thoughts on entrepreneurs developing
organizational culture promoting open communication with employees and
customers. R5 stated “Again, fostering a culture of open communication cultivates
an environment that allows us to adapt to changing market condition.” Open
communication fosters a culture of transparency and adaptability. The respondents
also highlighted the importance of listening to grievances and maintaining strong
working bonds with employees.
Acceptance of Uncertainty
Startups are untested business initiatives that individuals take in the hope of
making profits. Starting and maintaining these businesses is challenging because of
risks and uncertainties. Therefore, entrepreneurs must accept risks and be willing to
transform. These efforts require effort, time, money, and resilience that most people
lack (Thanh et al., 2021). As a result, many start-ups fail within the first 5 years.
Therefore, entrepreneurs need to accept risks and uncertainties associated with
businesses to transform business opportunities into viable and successful business.
R3 stated
“Sometimes, you just have to learn through trial and error.” R1 stated “I mean, it's
really kind of trial by fire, you know, personal experience.” Accepting that
challenges exist means entrepreneurs can prepare well. This literature is consistent
with the findings of the interviews. An overarching theme was the need for
entrepreneurs to embrace uncertainty and associated risks. Acceptance was seen as
essential in developing the right attitudes and mindsets to navigate challenges
effectively.
