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Article
Publication date: 1 November 2022

Ruslan Prijadi, Adhi Setyo Santoso, Tengku Ezni Balqiah, Hongjoo Jung, Putri Mega Desiana and Permata Wulandari

This research investigates the nature of regulatory-focused effectuation (as the basis of entrepreneurial behavior) in absorptive capacity development for open innovation…

Abstract

Purpose

This research investigates the nature of regulatory-focused effectuation (as the basis of entrepreneurial behavior) in absorptive capacity development for open innovation implementation, the role of crowds or communities management practices in the effectuation-based open innovation process, and open innovation performance as the output of the open innovation process in digital multi-sided platform (MSP) startups context.

Design/methodology/approach

In order to verify the hypothesis, the researcher conducts a quantitative study that is based on a self-administered questionnaire and employs the PLS-SEM approach. The sample comprises of 70 Indonesian digital MSP businesses that have been operational for at least three years and have used open innovation approaches with their audiences, communities or complementors.

Findings

The research findings imply that there is a connection between promotion-focused effectuation and the open innovation process. This connection is particularly strong when it comes to the incorporation of absorptive capacity and crowds or communities management practices. On the other hand, prevention-focused effectuation shows insignificant effect toward open innovation process in digital MSP startups context.

Research limitations/implications

The research findings imply that with limited resources and experiences, young entrepreneurs can still implement open innovation strategy for their digital MSP platform through effectuation principles that leverage the external resources from digital platform ecosystem members.

Practical implications

In digital MSP startups context that perform promotion-based effectuation principles, innovation performance can be achieved by analyzing new insight, transforming the existing activities with the new insight, creating new offering afterward, as well as strengthening crowds or communities management practices through co-creation activities with platform ecosystem members that may lead into new business model.

Originality/value

The originality of this work is to make a contribution to the literature on strategic entrepreneurship by describing the phenomena of the paradox of resource-based theory; adopting open innovation strategy under constrained initial resources and capabilities scenario.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

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

Keywords

Article
Publication date: 2 June 2022

Anastasiia Laskovaia, Younggeun Lee, Karina Bogatyreva and Pol Herrmann

Entrepreneurial passion lies at the foundation of the business development process, yet the available evidence is ambiguous regarding its effects on firm performance. In…

Abstract

Purpose

Entrepreneurial passion lies at the foundation of the business development process, yet the available evidence is ambiguous regarding its effects on firm performance. In this study, we examine the entrepreneurial passion puzzle by looking into decision-making mechanisms underlying its potential to increase business performance outcomes. Based on the literature on passion and effectuation theory, we link harmonious passion to firm performance through effectual behavioral logic.

Design/methodology/approach

To empirically test the theoretical model, we performed bootstrapping-based mediation, ordinary least squares moderated regression and moderated mediation analysis based on survey data collected from 105 executives of US firms.

Findings

We found that harmonious passion indirectly increases firm performance through effectuation. The direct link between harmonious passion and firm performance is insignificant. Moreover, the proposed mediation model is strengthened when the executives attain high levels of entrepreneurial experience.

Research limitations/implications

This study is not without limitations. First, a cross-sectional data set was adopted as the empirical setting of our research. Hence, further studies could benefit from applying longitudinal research designs. Second, a self-reported survey was utilized to measure firm performance. Although such operationalization is widely accepted in management and entrepreneurship studies, objective measures can produce additional insights into focal relationships.

Practical implications

This study provides practical implications for educators, consultants and managers. First, educators should encourage harmonious passion and teach effectual decision-making through various educational programs. Consultants and business practitioners should take similar orientations when organizing training for employees and executives. Finally, managers need to comprehend the motivational types of their employees and promote harmonious passion through appraisal systems and organizational culture.

Originality/value

This research uncovers a mechanism and a boundary condition on the relationship between harmonious passion and performance. The results show the critical moderating role of human capital and the mediating role of effectual decision-making on the passion and performance relationship. The current study contributes to the passion literature by providing a more nuanced understanding of the dynamics between entrepreneurial passion and firm performance.

Details

Management Decision, vol. 60 no. 8
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 21 March 2022

Yun Zhang, Zhihong Li, Yongzhong Sha and Kehu Yang

As two essential styles of firm decision-making, the relationships among effectuation logic, causation logic and firm performance are unclear. It is helpful to deepen the…

Abstract

Purpose

As two essential styles of firm decision-making, the relationships among effectuation logic, causation logic and firm performance are unclear. It is helpful to deepen the understanding of reasoning theory and the process of decision-making. The purpose of this paper is to explore the relationship between effectuation logic, causation logic and firm performance.

Design/methodology/approach

Based on 31 independent empirical studies (including 11,600 samples) published by predecessors, meta-analysis is used to systematically integrate the impact of two decision-making styles on firm performance and explore the potential factors affecting their relationship.

Findings

The results show a positive correlation between two decision-making styles and firm performance and the influence of effectuation decision-making style in firm performance is slightly stronger. However, the application environment is different: in the emerging market, the causation decision-making style is more effective for firm performance management. When the firm chooses the effectuation decision-making style, it is more effective for performance management in the emerging market. In addition, the industry type, firm performance evaluation tools, national development level and firm scale and firm age can significantly moderate the impact of two decision-making styles on firm performance.

Research limitations/implications

Both decision-making logics are possible ways for firm to success. Still, the future needs to dig deeper into the black box that can unlock the decision-making styles to achieve firm performance or competitive advantage based on other factors of the decision-behavior-outcome business model, more longitudinal data and experiments.

Originality/value

To the best of the authors’ knowledge, this is the first study to explore the impact of decision-making styles (effectuation logic and causation logic) on firm performance using a meta-analysis.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

Keywords

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

Keywords

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. 32 no. 2
Type: Research Article
ISSN: 2059-6014

Keywords

Open Access
Article
Publication date: 20 December 2019

Suzi Elen Ferreira Dias, Edson Sadao Iizuka and Eduardo Pinto Vilas Boas

The purpose of this paper is to understand the theoretical discussion of effectuation since the seminal paper in 2001 and to propose an agenda for future studies.

2141

Abstract

Purpose

The purpose of this paper is to understand the theoretical discussion of effectuation since the seminal paper in 2001 and to propose an agenda for future studies.

Design/methodology/approach

Systematic literature review and content analysis of 71 papers.

Findings

Most papers performed a replication of the concepts empirically, and few studies proposed to understand theoretical aspects of effectuation, among them, some authors presented theoretical advances to improve the approach and others participated in an ongoing debate that shows there is no consensus on whether the approach is theory or if considered, appears to be under construction at a rudimentary level or being questioned.

Research limitations/implications

The method requires authors to make choices, so the database used and the criteria defined for searching papers that were analyzed are the main limitations of this research.

Practical implications

The authors suggest that researchers, teachers and practitioners use effectuation analytically and reflectively.

Social implications

The authors present and analyze the current theoretical debate on effectuation. Results suggest the need for new discussions about the concepts, as well as new theoretical efforts of the researchers to analyze the potentialities and limitations of this approach.

Originality/value

Among empirical and applied research, with replications of the concepts of effectuation, this research contributes to a theoretical discussion based on a systematic literature review, seeking to bring new reflections about this approach. Additionally, the authors present an agenda of theoretical gaps for the development of future research.

Details

Innovation & Management Review, vol. 17 no. 1
Type: Research Article
ISSN: 2515-8961

Keywords

Article
Publication date: 6 January 2021

Jiawen Chen, Linlin Liu and Qingxin Chen

Empirical data on the impacts of entrepreneurial effectuation on firm performance are scattered and controversial. This study conducts a meta-analysis to obtain evidence…

Abstract

Purpose

Empirical data on the impacts of entrepreneurial effectuation on firm performance are scattered and controversial. This study conducts a meta-analysis to obtain evidence on whether and under what conditions effectuation is valuable. A contextual framework is proposed that highlights the boundary condition of the performance impact of effectuation.

Design/methodology/approach

Both the traditional approach of meta-analysis and advanced techniques of Bayesian meta-analytic tests are used to combine numerous studies from varied research contexts.

Findings

Meta-analytic results show that effectuation generally has a positive impact on firm performance, and is context-dependent, leading to stronger performance for older firms and firms in high-tech industries and emerging countries.

Originality/value

The findings provide important implications for entrepreneurs who are considering applying effectuation. This study highlights that effectuation is context-dependent and the performance implications of effectuation are contingent on contextual factors at organizational, industrial and institutional levels. This study extends the contextual understanding of the effectuation–performance relationship.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 27 no. 3
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 31 July 2017

Marko Juhani Matalamäki

The purpose of this paper is to address the stages of development of effectuation theory and highlight the progression from the early years’ conceptual articles to the…

2995

Abstract

Purpose

The purpose of this paper is to address the stages of development of effectuation theory and highlight the progression from the early years’ conceptual articles to the recent empirical papers, characterized by specific, measurable research questions.

Design/methodology/approach

In total, 81 peer-reviewed academic journal articles featuring effectuation as a main subject were analyzed using Scandura and Williams’ (2000) modified version of McGrath’s typology of research strategies. The framework of Edmonson and McManus (2007) is employed to evaluate the maturity of the research program.

Findings

The main outcome is to introduce four main streams linked to effectuation theory in the current scientific dialogue: innovation and product development, internationalization, effectuation and causation simultaneously, and entrepreneurial expertise.

Research limitations/implications

The current study is reliant on retrospective data, which might influence the accuracy and completeness of this study, which typically leads to rationalized versions of history-associated causal decision making.

Practical implications

This study illustrates why effectuation theory should no longer be associated only with new ventures and startups. The majority of recent studies have presented the results of effectuation logic in the context of established companies.

Social implications

This follow-up review presents evidence that effectuation research has moved on from the nascent to the intermediate stage of development. Furthermore, the results indicate that it has already begun its transition toward the mature stage of development.

Originality/value

This study reveals the ongoing spirited battle between the convergent and divergent groups involved in the scientific debate around effectuation theory.

Details

Journal of Small Business and Enterprise Development, vol. 24 no. 4
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 14 August 2017

Franziska Günzel-Jensen and Sarah Robinson

Since Sarasvathy’s (2001) research on decision-making logics of expert entrepreneurs, effectuation has become a cornerstone in entrepreneurship education. Effectuation is…

1366

Abstract

Purpose

Since Sarasvathy’s (2001) research on decision-making logics of expert entrepreneurs, effectuation has become a cornerstone in entrepreneurship education. Effectuation is not only subjectified in entrepreneurship education, but has also become conceptualized as a method in the learning process. The purpose of this paper is to explore how students, who are novice entrepreneurs, react to working effectually and which barriers they face when applying effectual decision-making logics in a university course.

Design/methodology/approach

A student-centered process course in entrepreneurship with 142 students provides a unique opportunity to explore the phenomena. Participant/teacher observations, written and oral work from the students and finally formal and informal written evaluations of the course by the students provide comprehensive data.

Findings

The authors find that students experience three barriers to using effectuation. These are: noviceness, regarding the project as a “school project,” perceived lack of legitimacy of both the instructors and the process.

Originality/value

The contribution of this study is threefold: first, to contribute to the understanding of the applicability of effectuation for novice entrepreneurs in the classroom; second, to articulate the factors that hinder entrepreneurial learning when effectuation is used in a process course; and third, to shed light on the importance of contextual factors for individual learning.

Details

Education + Training, vol. 59 no. 7/8
Type: Research Article
ISSN: 0040-0912

Keywords

1 – 10 of over 1000