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How does entrepreneurial opportunity affect the decision-making process of effectuation? Evidence from China

Dan Long (School of Management, Hefei University of Technology, Hefei, People’s Republic of China)
Zi-yao Xia (School of Management, Hefei University of Technology, Hefei, People’s Republic of China)
Wang-bin Hu (Business School, Nankai University, Tianjin, China)

Kybernetes

ISSN: 0368-492X

Article publication date: 5 June 2017

Abstract

Purpose

The purpose of this paper is to bridge the obvious gap presented in research on antecedents of effectuation by building a research model from the perspectives of effectuation and entrepreneurial opportunity.

Design/methodology/approach

This paper examines the effects of patterns of opportunity discovery and the innovativeness of entrepreneurial opportunity on the decision-making process of effectuation in new venture creation. Eight hypotheses are put forward and examined by hierarchical multiple logistic regression. The data in this paper are based on the first two rounds of survey data from Chinese Panel Study of Entrepreneurial dynamics.

Findings

The empirical results show that patterns of opportunity discovery have significant positive effects (at least partially) on effectuation. Namely, entrepreneurs employing fortuitous discovery tend to use available means and leverage contingency. And with lower innovativeness of opportunity, entrepreneurs are more likely to use affordable loss and leverage contingency.

Research limitations/implications

The study is limited to each dimension of effectuation based on the single-item measure, which cannot completely reflect the effectual construct. More research should to be done to improve measures of effectuation.

Practical implications

The findings are useful for entrepreneurs to make effective decisions whether to choose effectuation in the face of different patterns of opportunity discovery. Besides, it provides the advice on how to cope with the innovativeness of opportunity and seize entrepreneurial opportunities to entrepreneurs.

Originality/value

This paper first systematically studies the effects of entrepreneurial opportunity on effectuation, making up for the obvious gap of research on antecedents of effectuation.

Keywords

Acknowledgements

The authors would like to thank The Research Center of Entrepreneurship of Nankai University for supporting Chinese Panel Study of Entrepreneurial Dynamics. They would also like to thank the reviewers for their valuable comments. Gratitude is also extended to all authors of references cited in this article.

Funding: This research was supported by the National Natural Science Foundation of China (Nos. 71202046, 71532005 and 71672091), the Philosophy and Social Sciences Planning Project of Anhui Province (No. AHSKQ2015D41), the Research of Social Science Innovation and Development in Anhui Province (No. A2015015) and the Fundamental Research Funds for the Central Universities (No. NKZXA1411).

Citation

Long, D., Xia, Z.-y. and Hu, W.-b. (2017), "How does entrepreneurial opportunity affect the decision-making process of effectuation? Evidence from China", Kybernetes, Vol. 46 No. 06, pp. 980-999. https://doi.org/10.1108/K-11-2016-0322

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited