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Article
Publication date: 13 October 2021

Dafnis N. Coudounaris and Henrik G.S. Arvidsson

This study aims to investigate the antecedents of the internationalisation strategy i.e., effectuation, causation and bricolage on the international performance of the firm.

Abstract

Purpose

This study aims to investigate the antecedents of the internationalisation strategy i.e., effectuation, causation and bricolage on the international performance of the firm.

Design/methodology/approach

In total, the study uses 138 peer-reviewed articles on effectuation, causation, effectual/causal decision-making logics and related issues such as the impact of antecedent factors of international strategy (i.e. effectuation, causation and bricolage) on the international performance of the firm.

Findings

Even though the theory of effectuation was formulated in 2001, to a large extent it has still not moved away from the realm of small entrepreneurial firms. The development of effectuation logic has accelerated in recent years, but the bulk of the research still focusses on small entrepreneurial firms rather than on the application of the theory in larger, non-entrepreneurial firms. Furthermore, effectuation theory would benefit from being developed into the realm of psychology and sociology.

Originality/value

This study offers a conceptual model on how effectuation, causation and bricolage influence internationalisation strategy, which, in turn, impacts the international performance of the firm. Furthermore, the study discusses the effectual logic for larger firms. The exponential growth of studies on effectuation during recent years, i.e. 2017 to the first quarter of 2020, shows that researchers have responded to calls by leading authors stating that effectuation theory is a field with great potential for further theoretical developments. This study presents a literature review of the critical issue of the engagement of internationalisation strategies with effectuation, causation, bricolage and the international performance of the firm compared to the earlier literature review for the period 2001–2016 by Matalamäki (2017) and Karami et al. (2019) on effectuation and internationalisation.

Details

Review of International Business and Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-6014

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Book part
Publication date: 28 August 2020

Virginia Cha, Yi Ruan and Michael Frese

This study enriches the theory of effectuation by discussing the four independent dimensions of effectuation and their relationships with causation. Additionally, we fill…

Abstract

This study enriches the theory of effectuation by discussing the four independent dimensions of effectuation and their relationships with causation. Additionally, we fill the gap in prior literature by showing how entrepreneurial experience moderates the relationship between effectuation and innovativeness of the venture. Our study of 171 practising entrepreneurs regarding their entrepreneurial decision-making logic yielded multiple findings. The authors find that entrepreneurs rely on causation as well as effectuation in their decision-making; the more experienced entrepreneurs are, the more they actually use causation; and entrepreneurial experience moderates the relationship between effectuation and innovativeness of the venture firm.

Details

The Entrepreneurial Behaviour: Unveiling the cognitive and emotional aspect of entrepreneurship
Type: Book
ISBN: 978-1-78973-508-6

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Article
Publication date: 4 April 2016

Runping Guo, Li Cai and Weiyong Zhang

Research on new internet venture growth is lacking. The purpose of this paper is to address the gap by developing and testing a theoretical model that links venturing…

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Abstract

Purpose

Research on new internet venture growth is lacking. The purpose of this paper is to address the gap by developing and testing a theoretical model that links venturing principles (effectuation or causation) to new internet venture growth through resource bundling (pioneering or stabilizing).

Design/methodology/approach

The proposed theoretical model is developed upon the entrepreneurship literature and resource-based view. Empirical data are collected from entrepreneurs and top executives in China via a survey. The Baron and Kenny (1986) mediation model assessment procedure is used to analyze the data.

Findings

Both effectuation and causation are positively associated with new internet venture growth. Effectuation leads to pioneering resource bundling, which in turn contributes to new internet venture growth. Causation also contributes to new internet venture growth, but through stabilizing resource bundling.

Research limitations/implications

This research helps link the theory of effectuation to resource-based theory by revealing resource bundling as the mediator between effectuation, causation, and new venture growth. Moreover, the authors provide empirical evidence of the importance of resource bundling with entrepreneurial strategic decision logics to the growth of new internet ventures in transitional economies.

Practical implications

Entrepreneurs and managers of new internet ventures should leverage both venturing principles to support growth. Internet ventures generally are creative and innovative in nature, hence favor effectuation. But it will be unwise to ignore causation, which also leads to growth.

Originality/value

This is an original empirical research guided by theories. It is a novel insight to identify the mediating effect of resource bundling. This study likely will inspire more scholarly research on the subject. It also lays a solid foundation for further inquiry such as complementarities between effectuation and causation.

Details

Internet Research, vol. 26 no. 2
Type: Research Article
ISSN: 1066-2243

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Article
Publication date: 6 October 2017

Shiferaw Muleta Eyana, Enno Masurel and Leo J. Paas

The purpose of this paper is to investigate the implications of causation and effectuation behaviour of Ethiopian entrepreneurs on the eventual performance of their newly…

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1298

Abstract

Purpose

The purpose of this paper is to investigate the implications of causation and effectuation behaviour of Ethiopian entrepreneurs on the eventual performance of their newly established small firms. It adds new knowledge and insights to advance the theory of effectuation by extending its scope into the domain of entrepreneurial behaviour and firm performance and by testing one of the operationalized scales in an African context.

Design/methodology/approach

This empirical research is conducted amongst Ethiopian tour operators (n=118) based on primary data from the field. The scales are based on Chandler et al. (2011), which are adapted to fit to the tourism sector and validated in an African context using a two-stage exploratory factor analysis (EFA). Hierarchical multiple regression is used to assess the ability of entrepreneurs’ behaviour (i.e. causation and effectuation) at the startup phase to predict the eventual performance of their newly established firms (self-reported changes in employment size, sales, profit and assets) over three years (January 2012-2015).

Findings

The findings reveal a varied effect of causation and effectuation on financial and non-financial measures. Causation is positively related to an increase in employment size, whereas the overall effect of effectuation is positively related to financial performance measures, although its dimensions vary in their effects on sales, profit and assets increase. The paper concludes that causation and effectuation have varied implications on firm performance. In other words, unlike the findings of other research in Western contexts, a strong empirical support is not found to claim that effectuation is superior to causation in outcomes such as firm performance in Ethiopian context.

Research limitations/implications

While this paper provides a new data set for entrepreneurship literature, its findings may lack generalisability. Not only it is industry specific (tourism sector), but also it is conducted in a single African country (Ethiopia). Despite its limitations, the paper adds new knowledge and insights for empirical studies in entrepreneurship field on the effects of entrepreneurs’ behaviour, such as causation and effectuation; on firm performance. Future research should focus on other economic sectors and in different African countries before making generalisations about the effect of causation and effectuation behaviour of African entrepreneurs on firm performance.

Practical implications

The findings of this paper can be used in other hospitality and tourism sectors like hotels and souvenir shops since tour operating business includes a broad range of service activities such as sightseeing, accommodation, transportation, recreational activities and shopping. Besides, these results have practical implications to prepare and provide business and management training tools to enhance entrepreneurial and managerial skills of owners of small tourism firms in Ethiopia. The findings of the study can also be applied in other African countries with similar culture and business environments to promote tourism development and success in Africa.

Originality/value

There have been hardly any empirical studies that are undertaken on the implications of entrepreneurial behaviour such as causation and effectuation on the performance of small tourism firms, particularly in an African context. The paper addresses this research gap in entrepreneurship literature in drawing on empirical evidence from small tourism firms (tour operators) in Ethiopia.

Details

Journal of Small Business and Enterprise Development, vol. 25 no. 5
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 6 March 2017

Emiel L. Eijdenberg, Leonard J. Paas and Enno Masurel

This paper aims to investigate the effect of decision-making, in terms of the effectuation and causation orientation of small business owners, on the growth of their small…

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1476

Abstract

Purpose

This paper aims to investigate the effect of decision-making, in terms of the effectuation and causation orientation of small business owners, on the growth of their small businesses in an uncertain environment: Burundi.

Design/methodology/approach

On the basis of primary data from a pre-study of 29 expert interviews, a questionnaire was developed and was filled in by 154 small business owners in Burundi’s capital, Bujumbura. Subsequently, correlation analyses, a factor analysis and regression analyses were performed to test the hypotheses.

Findings

While, on the one hand, the findings show that small business owners who perceive the environment as uncertain are more effectuation-oriented than causation-oriented; on the other hand, the findings show that effectuation and causation orientations do not influence later small business growth. Therefore, other determinants for small business growth in an uncertain environment should be further explored.

Originality/value

This paper fills the research gap of decision-making in relation to small business growth from the entrepreneurs who are among the billion people who live in absolute poverty. On the basis of Western studies, effectuation might be more present in contexts of dealing with many uncertainties of future phenomena, and that it is often positively correlated with firm growth. In contrast, this paper shows that neither an effectuation orientation nor a causation orientation significantly affects small business growth in a context that can be assumed as highly uncertain.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 9 no. 1
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 16 April 2020

Zelong Wei and Linqian Zhang

In spite of the significance of the strategic change, its high rate of failure inspires us to explore how to successfully enact new strategic change in a different…

Abstract

Purpose

In spite of the significance of the strategic change, its high rate of failure inspires us to explore how to successfully enact new strategic change in a different environment. Based on strategy as practice perspective and effectuation theory, this study aims to extend extant literature by identifying two approaches performing strategic change (e.g. causation strategic change or effectuation strategic change) and investigating their effects on firm performance and also boundary conditions (e.g. market uncertainty or technological uncertainty).

Design/methodology/approach

Based on a data set from 238 firms in China, the authors empirically test the hypotheses through regression analysis.

Findings

The findings indicate that causation and effectuation strategic changes can promote firm performance. However, the roles of the two approaches vary with the external environment. Specifically, market uncertainty strengthens while technological uncertainty weakens the positive effect of causation strategic change. In contrast, technological uncertainty strengthens the positive effect of effectuation strategic change on firm performance.

Originality/value

This study extends research literature of strategic change by identifying causation and effectuation strategic changes and investigating how their roles vary with market uncertainty and technological uncertainty. The findings guide firms to adopt a fit approach to perform a strategic change in different external environments.

Details

Chinese Management Studies, vol. 14 no. 3
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 11 January 2022

Ma Jun, Fitri Rini Ariyesti, Sumran Ali and Peng Xiaobao

Entrepreneurial orientation (EO) has witnessed a daunting rise in firm-level practices; to some extent, it has been augmented by the factors such as globalization and…

Abstract

Purpose

Entrepreneurial orientation (EO) has witnessed a daunting rise in firm-level practices; to some extent, it has been augmented by the factors such as globalization and technological shift. The wide variety of literature has explained the importance of EO for firm performance. However, it has not yet been explored at a firm-level the approaches of causation and effectuation through the prism of leader traits such as leader dominance and self-efficacy as administrative ability and EO as strategic manoeuvring with strategic decisions obliged as a spin of firms.

Design/methodology/approach

The authors used the quantitative method to analyse the proposed relationships. For this reason, the authors targeted the Chinese firms to collect the data through the semi-structured survey from December 2020 to March 2021 and contributed to the literature by investigating 480 valid responses of leaders from Chinese firms.

Findings

The findings support the incorporated view of causation and effectuation on EO, which serve as vital strategic manoeuvring along with leader traits for firm stability and growth.

Practical implications

This study assists the decision-makers (including the top management team, Chief Financial Officer and Chief Executive Officer choose the particular approach (effectual or causal) to create the new venture/new product/new process or scale up the existing firm on another level for optimal benefits by considering their existing resources.

Originality/value

EO is a unidirectional process with three dimensions: innovativeness, proactiveness and risk-taking that could directly favour the firm by considering the well-known approaches (effectuation and causation) in crisis circumstances (like Covid-19). These approaches help the executives enhance their firm’s performance and maintain its sustainability and stability in crisis conditions by effectively using the available resources within its boundaries.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 23 August 2021

Oliver Kwabena Aggrey, Alfred Kwadwo Djan, Naomi Abena Dei Antoh and Louis Numelio Tettey

This study aims to investigate the effectiveness of causation decision-making and effectual decision-making logic in challenging economic situations within agricultural…

Abstract

Purpose

This study aims to investigate the effectiveness of causation decision-making and effectual decision-making logic in challenging economic situations within agricultural small and medium-sized enterprises in Ghana.

Design/methodology/approach

The authors collect and derive composite variables from effectuation, causation, financial capital availability (FCA) and crisis performance data through a randomized system based on literature precedents. This study analyzes the data using descriptive analysis, confirmatory factor analysis and ordinary least squared regression through STATA 15.

Findings

The authors find that effectual managers are indeed better off during crisis conditions. Also, there is a significant moderation relationship between the effectuation, FCA and crisis performance.

Originality/value

From strategic management and entrepreneurial process standpoint, the effectuation theory thrives within uncertain business environments. This notwithstanding, literature has often focused on hypothetical, uncertain business environments. The authors present plausible evidence of effectual business behavior from a real crisis, from small agriculture firms’ perspectives and an emerging economy context.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 15 no. 5
Type: Research Article
ISSN: 1750-6204

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Article
Publication date: 21 April 2020

Hamidreza Karami and Oluwole Alfred Olatunji

Delay causations in infrastructure projects are well reported in normative literature. However, very little is known regarding the environment-related causations which can…

Abstract

Purpose

Delay causations in infrastructure projects are well reported in normative literature. However, very little is known regarding the environment-related causations which can assist in developing mitigation strategies. This study aims to examine critical causations of overruns in marine construction projects.

Design/methodology/approach

A total of 73 delay factors, grouped into 16 themes, were identified from literature. Data relating to the significance of each factor were collected through a questionnaire survey administered to 151 respondents. A total number of 126 valid responses were retrieved. Reductionist methodology was used to identify the statistical significance of each delay causation.

Findings

All 73 variables analysed in the study are significant, including communication issues amongst stakeholders, inadequate planning, safety issues, deficient technical instructions and inappropriate management approaches. Others include design and construction issues, issues with project organisational structures, political and cultural factors, environmental uncertainties and complexity in resource management. The study also found estimation errors, owner's attitude, financial issues, delay in approval processes, construction strategies and unavailability of appropriate technologies for the work as influencing factors. These findings are consistent with earlier studies on other forms of projects, but they further confirm that they are very relevant to marine projects.

Research limitations/implications

Due to the diversity of marine projects, overrun factors are likely to manifest in different ways in varying project circumstances. In addition, economics, technologies and local legislation often influence project situations differently.

Practical implications

The implications of these findings will assist in growing the practicality of scheduling and contract administration theories in marine projects. Although delay causations that have been reported in normative literature are relevant to marine construction, however, some of the causations are more severe in marine projects. It is important that planners and project stakeholders are mindful of this such that they can develop their expectations to tolerate variability rather than trade impracticable blames.

Originality/value

Determining delay factors specific to marine construction projects assists stakeholders and project management community in developing dedicated strategies applicable in scheduling to prevent and correct obstructions caused by overruns. Since projects are different in types and sizes, delay observations cannot be generalised.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 7
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 28 September 2020

Xiaobin Feng, Xiaoshu Ma, Zhe Shi and Xuebing Peng

To address the gap of divergent conclusions on the impact of knowledge search (KS) on performance, this paper aims to discuss the nonlinear relationships between KS and…

Abstract

Purpose

To address the gap of divergent conclusions on the impact of knowledge search (KS) on performance, this paper aims to discuss the nonlinear relationships between KS and reverse internationalization enterprise (RIE) performance, and the co-moderation of causation and effectuation (C&E) on KS–performance.

Design/methodology/approach

The proposed theoretical model is developed by integrating the theory of knowledge-based view and decision rationality theory. The empirical study is based on survey data collected from 245 RIEs of the Yangtze River Delta and Pearl River Delta regions in China. Hierarchical multiple regression and the appropriate U-test method are used to test the hypotheses.

Findings

Empirical results suggest that both focused and multi-focus searches have inverted U-shaped effects on RIE performance. Furthermore, causation weakens the curvilinear effect between multi-focus search and RIE performance, whereas effectuation strengthens the curvilinear effect but weakens the inverted U-shaped relationship between focused search and RIE performance. Results also indicate that the integration of C&E positively moderates the relationship between focused or multi-focus searches and RIE performance.

Originality/value

Findings reveal the nonlinear effects of focused and multi-focus searches on RIE performance and clarify the dispute over the mechanism of KS on performance by proposing the different moderating role of C&E. Moreover, this research provides deeper insight into contingency mechanisms between KS and performance by integrating the co-moderating role of C&E in RIEs.

Details

Journal of Knowledge Management, vol. 25 no. 5
Type: Research Article
ISSN: 1367-3270

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