Understanding dynamics of strategic decision-making in venture creation : a process study of effectuation and causation

By I. Reymen, Petra Andries, Hans Berends, René Mauer, Ute Stephan, E. van Burg. 2015

390 citations recorded by the source corpus.

This study draws upon effectuation and causation as examples of planning-based and flexible decision-making logics, and investigates dynamics in the use of both logics. The study applies a longitudinal process research approach to investigate strategic decision-making in new venture creation over time. Combining qualitative and quantitative methods, we analyze 385 decision events across nine technology-based ventures. Our observations suggest a hybrid perspective on strategic decision-making, demonstrating how effectuation and causation logics are combined, and how entrepreneurs’ emphasis on these logics shifts and re-shifts over time. We induce a dynamic model which extends the literature on strategic decision-making in venture creation.

Subfields: Accounting, Management of Technology and Innovation, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/21b204ad029c1b878d662960516a1811c9f59f24

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In Accounting

In Management of Technology and Innovation

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Citations in the corpus

Entrepreneurs’ Mental Health and Well-Being: A Review and Research Agenda (2018, background): “…(e.g., by pursuing every possible opportunity for growth); and, more generally how and when constraints on entrepreneurs’ autonomy may arise (e.g. in response to large contracts with a dominant customers, or large investments from a particular investor, Gelderen, 2016; Reymen et al., 2015).”
Bridging Behavioral Models and Theoretical Concepts: Effectuation and Bricolage in the Opportunity Creation Framework (2016, positive): “In addition, recent qualitative studies continue to address more detailed mechanisms behind the identified heuristics, for example dynamic patterns of effectuation in combination with causation (e.g., Berends et al., 2014; Reymen et al., 2015).”
Perceived uncertainty and behavioral logic: Temporality and unanticipated consequences in the new venture creation process (2019, background): “Recent studies show that objective uncertainty has no systematic association with the use of effectuation and causation (Reymen et al., 2015) based on a comparison of effectuation and causation across companies that target an existing market or a new market.”
Effectuation, Exploratory Learning and New Venture Performance: Evidence from China** (2017, background): “Introduction The theory of effectuation as an emerging entrepreneurship theory has drawn increasing attention from scholars and moved toward an intermediate state of development (Fisher 2012; Perry, Chandler, and Markova 2012; Reymen et al. 2015; Sarasvathy et al. 2014).”
Get It Together! Synergistic Effects of Causal and Effectual Decision-Making Logics on Venture Performance (2018, background): “For example, Wiltbank, Read, Dew, and Sarasvathy (2009) found that business angel investors focusing on control (effectuation) rather than on prediction (causation) in their investment portfolios experienced fewer failures without a reduction in the number of successes.”
Expect the unexpected: examining the shaping role of entrepreneurial orientation on causal and effectual decision-making logic during economic crisis (2018, background): “Risk-based decision-making is viewed as an efficient type of causal decision-making logic when data and information are available and reliable (Reymen et al. 2015).”