Planning effectual growth: a study of effectuations and causation in nascent firms

Two main contrasting approaches are used in the entrepreneurship literature to explain how new ventures strategize: causal/planned strategies and effectual/emergent strategies. In this study, we explore the use of these strategies within micro and small firms. Our results show that larger companies typically used more planned strategies while simultaneously relying on effectual mechanisms. We observe that companies operating in known markets, anchoring their business ideas on experience and having a strong growth intention grow larger. This suggests that causal and effectual mechanisms can co-exist and lead to growth when combined. Theoretical and practical implications of these findings are discussed

Impact of effectual propensity on entrepreneurial intention

For decades, entrepreneurship has been promoted in academia and the tourism sector and seen as an opportunity for new business ventures. In entrepreneurial behaviour, effectual logic shows how individuals use their resources to create new opportunities. This paper aims to determine effectual propensity as an antecedent of entrepreneurial intentions. For this purpose, and based on the TPB model, we conducted our research with tourism students from Cadiz and Seville (Spain) universities with Smart PLS 3. The results show that effectual propensity influences entrepreneurial intentions and that attitude and perceived behavioural control mediate between subjective norms and intentions. Our research has a great added value since effectual propensity is studied for the first time as an antecedent of intentions in people who have never been entrepreneurs.Durante décadas, el emprendimiento ha sido promovido en la academia y el sector del turismo, siendo visto como una oportunidad para nuevas empresas. En el comportamiento emprendedor, la lógica efectual muestra cómo los individuos utilizan sus recursos para crear nuevas oportunidades. Este documento tiene como objetivo determinar la propensión efectual como un antecedente de las intenciones emprendedoras. Con este propósito, y basándonos en el modelo TPB, llevamos a cabo nuestra investigación con estudiantes de turismo de las universidades de Cádiz y Sevilla (España) utilizando Smart PLS 3. Los resultados muestran que la propensión efectual influye en las intenciones emprendedoras y que la actitud y el control conductual percibido median entre las normas subjetivas e intenciones. Nuestra investigación tiene un gran valor agregado, ya que la propensión efectual se estudia por primera vez como antecedente de intenciones en personas que nunca han sido emprendedoras

The Role Of The Entrepreneurial Logic In Export Performance. The Case Of Entrepreneurs In Transition Economies

The aim of this thesis is to study the concept of effectuation in examining the entrepreneurial decisions made in a highly uncertain business environment of a transition economy, using the case of entrepreneurs in Uzbekistan. In the uncertain business environment of transition economies it is usually useless or simply impossible to make predictions, and hence classical prediction based business strategies are senseless for entrepreneurs performing in these economies. In the chapter 1, we examined theoretically the concept of uncertainty given in the Effectuation theory and the concept of uncertainty existent in the transition economies by building on Effectuation theory and Institutional theory. In the chapter 2, we proposed that there is no effect of the level of environmental uncertainty on the share of MSMEs in the countries and the results confirmed our hypotheses. In the chapter 3, we studied the the effect of effectuation on export performance by taking consideration of percieved environmental uncertainties and the entrepreneurial characteristics

Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices

The article of record as published may be found at http://dx.doi.org/10.1016/j.jbusvent.2008.02.002In support of theory, this study demonstrates that entrepreneurial experts frame decisions using an “effectual” logic (identify more potential markets, focus more on building the venture as a whole, pay less attention to predictive information, worry more about making do with resources on hand to invest only what they could afford to lose, and emphasize stitching together networks of partnerships); while novices use a “predictive frame” and tend to “go by the textbook.”We asked 27 expert entrepreneurs and 37MBAstudents to think aloud continuously as they solved typical decision-making problems in creating a new venture. Transcriptions were analyzed using methods from cognitive science. Results showed that expert entrepreneurs framed problems in a dramatically different way than MBA students

Fitting entrepreneurial, firm-level and environmental contingencies for better performance: A study into the complex world of entrepreneurship within Belgium

International audienceThis book reports the outcomes of a BELSPO (the Belgian Federal Science Policy Office) research project. The authors develop and estimate (parts of) a comprehensive model in which the micro-performance of SMEs is determined by a complex web of factors. These are situated at the level of the entrepreneur, organization and environment. In this modeling, a fit between individual, strategy, structure and environment is key to attain better performance in terms of, for example, efficiency or profitability. Strategy is assumed to be the linking pin between the entrepreneur’s (or his or her venture’s) strengths and weaknesses, and the opportunities and threats in the environment. In line with this contingency approach, the authors utilize a multi-disciplinary theoretical lens in combination with analysis techniques that allow for the identification of fits (and misfits), such as the analysis of conditional processes or dynamic multi-level QCA fit analysis

Contextualizing risk and building resilience: returnee versus local entrepreneurs in China

Risk is a pivotal concept in entrepreneurship research, as entrepreneurs constantly face uncertainty, ambiguity, setbacks, and stressful situations. Attitudes toward risk vary contingent upon individual risk preferences and cultural influences. Building resilience is critical for entrepreneurs to overcome obstacles, deal with risk, and grow their ventures. By juxtaposing effectuation theory and resilience literature, we compare the perceptions of risk held by Chinese returnees and local entrepreneurs and their coping strategies in building resilience. Our research reveals two types of coping approaches, namely effectual coping and causal coping. This study contributes to the comparative international entrepreneurship literature by contextualizing the notion of risk held by entrepreneurs influenced by Eastern and Western cultures. Our study further contributes to the nascent literature on resilience in organizations by specifying the entrepreneurial occupational context and exploring the influence of cultures on resilience, and by identifying distinctive resilience‐building coping strategies based upon cultural influences and interpretations of risk. Furthermore, we suggest that resilience can constitute one micro‐foundation of effectuation theory in the context of entrepreneurship dealing with risk

Effectual Versus Predictive Logics in Entrepreneurial Decision-Making: Differences Between Experts and Novices in the State of Maine

This study is a replication of research done by Dew et al. (2009) that aims to confirm that expert entrepreneurs use effectual logic framework as opposed to the casual, or predicitive, logic utilized by novices. In order to test this theory we provided 5 expert entrepreneurs and 5 novices with a case statement that provided information of an imaginary new venture and asked them to think aloud continuously as they solved decision-making problems relevant to this, and any, new venture while we recorded them. We coded the transcriptions of these recordings according to the scheme of the Dew et al. 2009 study and analyzed the coded results. We found that while the majority of the results were similar, there were notable differences among specific metrics, but not entire constructs. We posit that many of these differences may be attributed to the smaller sample size of this study and the three main differences between the two studies: participant pool, environmental factors, and the recruitment process. We further recommend that additional research be conducted to better understand the influence of the participants environment, innovation engineering training, and the participants overall experience with the recruitment process and execution of the interviews

Contextualizing risk and building resilience: returnee versus local entrepreneurs in China

Risk is a pivotal concept in entrepreneurship research, as entrepreneurs constantly face uncertainty, ambiguity, setbacks, and stressful situations. Attitudes toward risk vary contingent upon individual risk preferences and cultural influences. Building resilience is critical for entrepreneurs to overcome obstacles, deal with risk, and grow their ventures. By juxtaposing effectuation theory and resilience literature, we compare the perceptions of risk held by Chinese returnees and local entrepreneurs and their coping strategies in building resilience. Our research reveals two types of coping approaches, namely effectual coping and causal coping. This study contributes to the comparative international entrepreneurship literature by contextualizing the notion of risk held by entrepreneurs influenced by Eastern and Western cultures. Our study further contributes to the nascent literature on resilience in organizations by specifying the entrepreneurial occupational context and exploring the influence of cultures on resilience, and by identifying distinctive resilience‐building coping strategies based upon cultural influences and interpretations of risk. Furthermore, we suggest that resilience can constitute one micro‐foundation of effectuation theory in the context of entrepreneurship dealing with risk