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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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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).

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.

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.

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.

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.

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.

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.

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).

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.

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.

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.

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.

This paper aims to explore the mediating role of organizational entrepreneurial capability in the link between entrepreneurs’ effectuation and new venture performance, and whether entrepreneurs’ passion positively moderates this relationship in the Chinese emerging economy.

This study collected survey data from 140 Chinese new ventures. Following an empirical design, hierarchical regression analysis and bootstrapping analysis were applied to examine six hypotheses.

Results reveal that organizational entrepreneurial capability plays a positively mediating role in the association between entrepreneurs’ effectuation and new venture performance. Moreover, the whole mediation model is positively moderated by entrepreneurs’ passion, not only the association but also between entrepreneurs’ effectuation and organizational entrepreneurial capability.

The study is limited to the static relationships between key variables using the data obtained at one point in an emerging economy, which cannot investigate the dynamic evolution between variables. More longitudinal designs or cases to track the dynamic association should be considered.

The findings provide useful suggestions for entrepreneurs to enhance their effectual logic and entrepreneurs’ passion to better perceive and exploit opportunities and further improve new venture performance. The results also provide guidance for other groups, such as angel investors and policymakers, regarding how to use effectuation logic as an evaluation criterion to judge whether a new venture or program has investment potential.

These findings enrich the effectuation theory by providing the empirical evidence of the effect of entrepreneurs’ effectuation on new venture performance in an emerging economy. They also provide deeper insights into opportunity research by uncovering the mediating role of organizational entrepreneurial capability in the relationship between entrepreneurs’ effectuation and new venture performance.

The literature provides contradictory findings on planning contradictory findings on planning as a success factor in projects which entail high innovation. Nevertheless, new product development (NPD) research has mainly adopted the causation lens, in which planning plays an important role. By embracing the logic of effectuation, the purpose of this paper is to secure a wider perspective concerning how the various NPD options develop, taking into account the role played by uncertainty.

By adopting an inductive approach, the authors attempt to advance existing knowledge on the topic. The qualitative methodology (documentary analysis, content analysis and alternate templates) is adopted for the analysis of four NPD projects in the food industry in Spain.

Results reflect the relevance of the two perspectives considered when explaining the NPD process, with the presence of hybrid behaviour in all the projects and effectuation emerging as the dominant logic in the project linked to a greater degree of innovation and uncertainty.

Projects involving varying degrees of innovation would seem to require different NPD approaches. This paper provides an initial approach to the subject, and it analyses a small number of firms. It is necessary to better understand to what extent the two logics are present in different types of projects.

By incorporating the logic of effectuation, firms might consider using NPD as a means of engaging in projects that entail a higher degree of innovation, since it offers ways of dealing with the uncertainty linked to such projects.

The paper contributes to the still early efforts to apply the perspective of effectuation to the area of NPD, by linking the logics of effectuation and causation to the various NPD processes taking account of their varying degrees of innovation and uncertainty (exploitation, exploration and leverage options).

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).

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

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.

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.

The purpose of this study is to examine the decision-making process for entrepreneurial firms when entering foreign markets and how and why they entered those markets.

A nascent theory in entrepreneurship called effectuation is combined with internationalization process theory as the conceptual framework to study decision-making under uncertainty. The central concept in both these theories is relationships and how they can be used to gain knowledge and thus reduce uncertainty and in the case of effectuation to co-create opportunities to enter foreign markets. The research design involves a multiple case study of software firms from Finland and New Zealand.

It was found that entrepreneurs differentiate between foreign market selection and foreign market entry during their internationalization process, potentially using different decision-making processes in them. They tend to interweave effectuation and causation logics as substitutes in their decision-making. Uncertainty during foreign market entry is not always a barrier because it can provide opportunities depending on the logic used. In addition, there is evidence that entrepreneurs who have existing relationships in foreign markets tend to use effectuation to select and enter foreign markets.

This paper transposes effectuation from its original field of entrepreneurship research to the context of internationalizing entrepreneurial firms. Consequently, it contributes toward understanding the decision-making process for selecting and entering foreign markets.