Moderating Effect of Affect on Decision Making in Small and Medium Sized Enterprises

Abstract

Working within the framework of the Affect Infusion Model (AIM), we use a sample of 351 minority owned, small and medium sized firms, to test whether negative affect is infused into business related decision making. Findings suggest that negative affect has a relationship with business owner’s intent to quit the business. Perceptions of success and satisfaction with the business and the entrepreneur’s personal goals were also related to owner’s intent to quit. Negative affect was found to moderate the relationship between perceived success and satisfaction and the entrepreneur’s personal goals and intent to quit which offer support to the AIM.