Impact of shame on opportunity evaluation and exploitation decisions

Purpose Evaluating and exploiting an opportunity is an iterative process, and one of the triggers for the re-evaluation is the feedback received from stakeholders. Most of the time, the feedback comes in the form of harsh comments, criticisms and rejections, which can cause shame. There is also a lack of studies on the impact of shame on the decision-making ability of the entrepreneur, which is addressed through this study. Design/methodology/approach The study uses an experimental design, which is considered the “gold standard” in establishing causality. By manipulating the emotions of 107 entrepreneurs and making them assess a hypothetical opportunity, the study finds conclusive evidence for the proposed hypotheses. Findings Using the appraisal tendency framework, the authors show that shame makes an entrepreneur assess an opportunity as lower in desirability and feasibility. Shame also makes an entrepreneur give more significant weight to feasibility (over desirability) when deciding on entrepreneurial action. Originality/value The study provides strong empirical evidence that shame is an important emotion and influences the decision-making ability of the entrepreneur. The study reveals that important stakeholders assessing entrepreneurs need to be careful about how they provide feedback. Since the emotion it can elicit has a bearing on the subsequent decisions made by the entrepreneur.