TY  - JOUR
AB  - Purpose– Ever since Sarasvathy’s (2001) seminal article, scholars have sought to test effectuation’s affect on firm performance. Although recent work has begun the arduous process of testing effectuation’s effect on entrepreneurial performance, there is still much to learn about its impact on firm performance. One such area is the relationship between effectuation and innovation. The purpose of this paper is to first, propose a scale suitable to the explication of the effectuation construct relative to innovation. Second, it proposes a more parsimonious scale for the measurement of innovation. Third, these scales are tested relative to firm performance. Design/methodology/approach– This paper develops and tests a structural model, which investigates aspects of effectuation as mediators between innovation orientation and product/service innovation. This is accomplished using a sample of 169 electronic product manufacturing-based small and medium-sized enterprises (SMEs). Subjective measures of performance are used as the dependent variable. Findings– The three most widely used measures of innovativeness were found to break cleanly into two sub-constructs, namely innovation orientation and product/service innovation. Effectuation measures included means (who I know), leverage contingencies (experimentation), pre-commitments and affordable loss. Means and leverage contingencies were found to positively mediate innovation orientation and product/service innovation leading to increased firm performance. Affordable loss did not show a mediating role, but had a direct effect on firm performance. Research limitations/implications– This study establishes two distinct sub-constructs of firm-level innovation; namely innovation orientation and product/service innovation. Second, by testing an innovation-centric effectuation model, this research establishes an empirical relationship between effectuation, innovation and firm performance. Practical implications– Practical implications include establishing a relationship between means, leverage contingencies and innovation-performance, indicating that the ways through which small and medium-sized enterprises use their innovation networks may affect innovation outcomes and ultimately firm performance. Originality/value– This research establishes an empirical relationship between effectuation, innovation and firm performance, extending effectuation theory from the entrepreneurship to the innovation literature.
VL  - 19
IS  - 2
SN  - 1460-1060
DO  - 10.1108/EJIM-12-2014-0119
UR  - https://doi.org/10.1108/EJIM-12-2014-0119
AU  - Roach David C.
AU  - Ryman Joel A.
AU  - Makani Joyline
PY  - 2016
Y1  - 2016/01/01
TI  - Effectuation, innovation and performance in SMEs: an empirical study
T2  - European Journal of Innovation Management
PB  - Emerald Group Publishing Limited
SP  - 214
EP  - 238
Y2  - 2024/04/19
ER  -