Effective heuristics for new venture formation

Entrepreneurs are often under time pressure and may only have a short window of opportunity to launch their new venture. This means they often have no time for rational analytical decisions and rather rely on heuristics. Past research on entrepreneurial heuristics has primarily focused on predictive modes of control. Studies have analyzed the heuristics that entrepreneurs use when they try to predict the future value and success chances of opportunities. There is increasing awareness – particularly resulting from studies on effectuation – that entrepreneurs engage in non-predictive control as well. While entrepreneurs also use heuristics in this alternative mode of control, these have hardly been studied so far. This conceptual paper addresses this gap in the literature by exploring the heuristics associated with both approaches and by theorizing the conditions under which they are likely to be effective

Entrepreneurial decision making in high tech business development : a quasi-experiment

Research has shown that differences in decision making processes may explain differences in entrepreneurial effectiveness. Particularly rational planning based processes have been set off against other processes such as effectuation, abduction, and bricolage. However, there is still little empirical evidence on entrepreneurial decision making in the earliest phases of enterprise development. In a “living lab”, this study attempts to fill this void, by real-time tracing of entrepreneurs who start in the opportunity recognition phase. This paper shows the first results

How should a small company interact in its business network to sustain its exchange effectiveness?

This paper investigates the dynamic alignment of network and business\ud development of two small firms in the printing industry. Developments are\ud followed over more than 8 years. The aim of the paper is to understand how\ud small firms can manage their network relations by maintaining both their\ud efficiency in existing business and flexibility to develop new business. The case comparison suggests that different networking approaches drive business\ud development. For successful business development both strong and varied ties\ud as well as the existence of different intermediary functions of partners are\ud necessary

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

Why Does Dave Spend Ten Times More Time on Interaction with Industry than Paul? : Toward a Model of Social Capital Activation for Entrepreneurial Academics

This paper focuses on academics that are looking for entrepreneurial ways to pursue their teaching, research and commercialization interests, in particular by actively engaging in university-industry interactions. The paper aims to improve our knowledge of why some academics exploit their social networks with industry more actively than others. We develop a conceptual model that aims to explain a mechanism behind social capital activation, and to identify factors that are likely to have the highest predictive power. We theorize on how academic’s motivation, perceived social influence and perceived ability unite into readiness to activate social capital, and under what circumstances this readiness is likely to result in actual behavior. Specifically, the objective of this paper is to further develop the model constructs and to operationalize them into a set of measurable items. For each of the readiness constructs, we present a set of composite variables, as well as corresponding observable variables. We conclude with implications of our analysis for theory and practice, and set directions for future research

The resource-based view: A review and assessment of its critiques

The resource-based view (RBV) of the firm has been around for over twenty years - during which time it has been both widely taken up and subjected to considerable criticism. The authors review and assess the principal critiques evident in the literature, arguing they fall into eight categories. They conclude the RBV’s core message can withstand criticism from five of these quite well provided the RBV’s variables, boundaries and applicability are adequately specified. Three critiques that cannot be readily dismissed call for further theorizing and research. They arise from the indeterminate nature of two of the RBV's basic concepts – resource and value – and the narrow conceptualization of a firm's competitive advantage. The authors feel the RBV community has clung to an inappropriately narrow neo-classical economic rationality, thereby diminishing its opportunities for progress. Their suggestions may assist with developing the RBV into a more viable theory of competitive advantage, especially if it is moved into a genuinely dynamic framework.resource-based view; sustained competitive advantage; Austrian economics

The nature of the entrepreneurial process: causation, effectuation, and pragmatism

This paper forms an appreciation of and a critical reflection on Sarasvathy’s work on causation and effectuation models of entrepreneurship. While Sarasvathy has made significant contributions to the field, it is suggested that a more fruitful approach can follow if two modifications are made. First, it is argued that the six dimensions on which the two models differ are independent and therefore that it is more fruitful to focus on the dimensions rather than on the two models. Second, it is argued that a pragmatist view on entrepreneurship is most fruitful when it is not applied at the level of the entrepreneurial process but at the level of the underlying human actions