What to Do Next? The Case for Non-Predictive Strategy

By Robert Wiltbank, Nicholas Dew, Stuart Read, S. Sarasvathy. 2006

749 citations recorded by the source corpus.

Two prescriptions dominate the topic of what firms should do next in uncertain situations; planning approaches and adaptive approaches. These differ primarily on the appropriate role of prediction in the decision process. Prediction is a central issue in strategy making due to the presumption that what can be predicted can be controlled. In this paper we argue for the independence of prediction and control, that the pursuit of successful outcomes can occur through either predictive or control oriented approaches. We further develop and highlight control oriented approaches to open new avenues for dealing with the uncertainty inherent to the question of what organizations should do next. These approaches significantly impact the costs and risk of firm strategy as well as their innovative efforts.

Subfields: Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f265f49af84311e8126deb47362d8037bf80f3d3

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Management Science and Operations Research

In Strategy and Management

Citations in the corpus

An Effectual Approach to International Entrepreneurship: Overlaps, Challenges, and Provocative Possibilities (2014, positive): “Combined, these elements show effectuation to be one type of nonpredictive strategy (Wiltbank et al., 2006).”
Outlines of a behavioral theory of the entrepreneurial firm (2008, background): “Effectuation has been discussed in detail in other articles, including Sarasvathy (2001), Sarasvathy and Dew (2005a,b) and Wiltbank et al. (2006).”
Effectuation, Exploratory Learning and New Venture Performance: Evidence from China** (2017, background): “According to the theory of effectuation, it is reasonable to expect greater variance in performance when effectuation is used under high levels of uncertainty (Chandler et al. 2011; Read, Song, and Smit 2009; Wiltbank et al. 2006).”
The role of entrepreneurial decision-making in opportunity creation and recognition (2015, background): “Sarasvathy, together with her colleagues in a growing stream of studies (e.g. Dew et al., 2009; Read and Sarasvathy, 2005; Sarasvathy and Dew, 2005; Sarasvathy and Kotha, 2001; Wiltbank et al., 2006), has argued that effectuation is more appropriate as a perspective for understanding how entrepreneu”
Social interaction via new social media: (How) can interactions on Twitter affect effectual thinking and behavior? (2011, background): “…literature with the recognition that effectual approaches can increase entrepreneurial efficacy and reduce the costs of business failure, since failures of effectual firms occur earlier and at lower levels of investment (cf. Read et al., 2009a,b; Sarasvathy, 2001; Wiltbank et al., 2006).”
Get It Together! Synergistic Effects of Causal and Effectual Decision-Making Logics on Venture Performance (2018, background): “In contrast, entrepreneurs who apply non-predictive control (effectuation) make use of other principles, which were first documented by Sarasvathy (2001, 2008) and colleagues (e.g., Read & Sarasvathy, 2005; Sarasvathy & Dew, 2005; Sarasvathy, Dew, Read, & Wiltbank, 2008; Wiltbank et al., 2006).”
Uncertainty, Knowledge Problems, and Entrepreneurial Action (2018, background): “Under ambiguity, these artifacts at least partially enable entrepreneurs to socially construct elements of their operating environment and to operate “as-if” the venture possesses legitimacy (Gartner et al., 1992; Wiltbank et al., 2006).”
To Shape or Adapt: Knowledge Problems, Epistemologies, and Strategic Postures under Knightian Uncertainty (2020, background): “This view emphasizes one approach to managing uncertainty—namely, adapting to it by responding rapidly to the changes in available information and knowledge as uncertain situations evolve (Moeen, et al., 2020; Sarasvathy, 2001; Wiltbank et al., 2006).”
Uncertainty Types and Transitions in the Entrepreneurial Process (2017, background): “As these effects are observed and evaluated against expected progress, changes are made to redirect the venture more closely toward the desired outcome, or even to alter the desired or expected outcome (Wiltbank et al. 2006).”
Opportunities and institutions: A co-creation story of the king crab industry (2015, background): “…actions, and causally ambiguous and non-predictive decision-making, enable deviation from existing patterns within a particular context through the actor's actions and creativity (Alvarez and Barney, 2007; Alvarez et al., 2013; Garud and Karnoe, 2003; Sarasvathy, 2001; Wiltbank et al., 2006).”
A holistic market conceptualization (2015, background): “This consideration highlights the role of nonpredictive strategy (Wiltbank et al. 2006), in which firms aim to influence the development of their market through a combination of an active market scripting and learning process.”
Entrepreneurial Effectuation: A Review and Suggestions for Future Research (2012, background): “In a second quantitative study, Wiltbank et al. (2009) considered only one effectuation sub-construct—control. In particular, they examined the degree to which investors emphasized prediction or control in their responses to a scenario-based set of questions and whether the investor’s prediction ver”
Effectual versus predictive logics in entrepreneurial decision making: Differences between experts and novices: Does experience in starting new ventures change the way entrepreneurs think? Perhaps, but for now, "Caution" is essential (2009, neutral): “…experts and novices, Journal of Business Venturing (2008), doi:10.1016/j.jbusvent.2008.02.002 Non-predictive control is defined as eschewing predictive information in favor of what the decision maker and her stakeholders can actually control at any given point in time (Wiltbank et al., 2006).”
Prediction and control under uncertainty: Outcomes in angel investing (2009, background): “All rights reserved. doi:10.1016/j.jbusvent.2007.11.004 We characterize the strategic decision-making approaches of angels along two separate dimensions: strategies that emphasize prediction and strategies that emphasize non-predictive control (Wiltbank et al., 2006).”