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Effectuation Under Risk And Uncertainty: A Simulation Model
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Author: Chris Welter, Xavier U.
Author: Sungho Kim, Southern Illinois U.
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Effectuation was first proposed as an expert entrepreneur’s decision-making framework under uncertainty, but the condition of uncertainty has been questioned. Using an agent-based simulation model, this paper investigates the effectiveness of effectuation relative to causation in uncertain and risky contexts. The simulation overcomes some of the shortcomings of think aloud protocols typically used in effectuation research. The results suggest that effectuation outperforms causation in both risky and uncertain contexts up until the entrepreneur’s predictive ability nears omniscience. The implication is that effectuation should not be restricted to uncertain environments, but is an effective framework whenever predicting the future is challenging.
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Search Terms: Effectuation | Causation | Planning
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Paper is No Longer Available Online: Please contact the author(s).
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Looking for a way Forward: A Structured Literature Review of Effectuation Research
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Author: Denis A. Gregoire, HEC Montreal
Author: Naïma Cherchem, HEC Montréal
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In spite of its well-documented successes, effectuation research continues to face though theoretical and methodological challenges. As a body of works, it also offers a somewhat disparate, loosely connected set of empirical findings. In order to help address these challenges and move effectuation research forward, we content-analyze the conceptual and methodological articulation of 72 scholarly papers published in high-rank journals between 2001 and 2016, and which focus specifically on effectuation. In turn, we use these analyses to assess the field’s achievements, and propose a series of suggestions to advance future effectuation research.
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Search Terms: Effectuation | Entrepreneurship | Human action
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Paper is No Longer Available Online: Please contact the author(s).
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Effectuation and Employees’ Intrinsic Motivation - The Contingent Role of Environmental Dynamism
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Author: Sylvia Hubner-Benz, TUM School of Management
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In entrepreneurial firms, firm success is not only dependent on entrepreneurs’ but also on employees’ performances. In this study, we empirically analyze whether entrepreneurs stimulate or diminish their employees’ intrinsic motivation when they rely on effectual logics. Further, we analyze whether the effect of effectuation on employees’ intrinsic motivation is contingent on environmental dynamism. To do so, we apply a multi-level field study among entrepreneurs and their employees. Our findings suggest that the effect of effectuation on employees’ intrinsic motivation is negative when the firm’s environment is dynamic.
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Search Terms: Effectuation | Intrinsic Motivation | Entrepreneurial firms
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Paper is No Longer Available Online: Please contact the author(s).
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Design in Effectuation: Novice Entrepreneurs Designing New Ventures
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Author: Shiona Chillas, U. of St Andrews
Author: Melinda Grewar, U. of St Andrews
Author: Barbara Townley, U. of St Andrews
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Effectuation has become widely accepted in the lexicon of entrepreneurship as a model for understanding the logic of entrepreneurial action, particularly apposite for expert entrepreneurs. Successive studies have endorsed and developed the theory conceptually and empirically, often comparing the difference between expert and novice entrepreneurs. This paper explores an important, and as yet underdeveloped, aspect of effectuation, namely the role of design in venture creation. Based on a contemporaneous, longitudinal study of an ideas-based and design-led ‘Sandpit’ which produced 19 funded ventures, the qualitative research draws on 53 interviews with 31 novice entrepreneurs during the early stages of venture creation. In contrast to previous research, findings are that novice entrepreneurs fulfil the principles of effectuation as a result of exposure to ‘design thinking’ during venture formation. Design principles are similar to those of effectuation in that they focus on the present, on problem-solving with the means at hand, contingency and non-linear thinking, and we suggest that design is an interlocutor between the business idea and venture formation, that encourages this effectuating logic in novice entrepreneurs. These findings offer insights for research in venture creation, and supplement the literature on effectuation.
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Search Terms: Effectuation | Venture Creation | Design
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Paper is No Longer Available Online: Please contact the author(s).
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