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Decision Making in Small Business: The Behavioral Aspects
Merkulova T. V., Maksymov M. S.

Merkulova, Tamara V., and Maksymov, Mykhailo S. (2024) “Decision Making in Small Business: The Behavioral Aspects.” Business Inform 10:144–151.
https://doi.org/10.32983/2222-4459-2024-10-144-151

Section: Problems of Business

Article is written in Ukrainian
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UDC 334.012.63:658

Abstract:
Formally, the classification of business entities into small, medium and large businesses is carried out on the basis of quantitative criteria: production, the size of turnover and assets, the number of personnel, while they are quite similar in European countries. But quantitative indicators of business size determine a number of behavioral distinctive features of small and medium-sized businesses. The article, based on the methodology of behavioral economics, analyzes and systematizes the features of decision-making in such a form of business as small entrepreneurship. The following areas of decision-making in which they are manifested are allocated as follows: starting a business and the emergence of a business idea; aim and criteria for evaluating activities; business organization; methods and technologies of doing business. Deviations from the classical principles of rationality, such as profit maximization and optimization of activities, in decision-making in small business are analyzed. The hypothesis that the principle of profit maximization in small business management is replaced by the principle of sufficiency or satisfaction is substantiated. Orientation to traditions, proven recipes, common standards of behavior in doing business gives stability and viability to small business, but at the same time carries the threat of stagnation, consolidation of far from the best practices, rejection of innovations. In order to prevent such threats in work, using the conception of shocks, an approach to the formation of a decision-making model in small business, which is based on business frameworks, is proposed. Considering the framework as a kind of tool that simplifies the task and sets a certain algorithm of actions, the behavioral model can be presented as a set of frameworks that provides the possibility of using more productive approaches, requiring a lower level of cognitive load from its users. In this way, to a certain extent, the problem of resource and cognitive limitations, which are inherent in small business, is solved, and more effective decision-making is supported.

Keywords: small business, behavioral economics, decision-making, rationality principle, business framework.

Bibl.: 27.

Merkulova Tamara V. – Doctor of Sciences (Economics), Professor, Professor, Department of Economic Cybernetics and Applied Economics, V. N. Karazin Kharkiv National University (4 Svobody Square, Kharkіv, 61022, Ukraine)
Email: [email protected]
Maksymov Mykhailo S. – Senior Lecturer, Department of Economic Cybernetics and Applied Economics, V. N. Karazin Kharkiv National University (4 Svobody Square, Kharkіv, 61022, Ukraine)
Email: [email protected]

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