Effectuation

By S. Sarasvathy. 2008

1,306 citations recorded by the source corpus.

Effectuation has become the basis for educating entrepreneurs and managers. Derived from cognitive and behavioral economic studies of expert entrepreneurs, effectuation shows how to cocreate value in highly uncertain situations. The framework of effectuation consists in techniques that minimize the use of predictive information and ways to turn control itself into strategy. In doing so, the effectual process opens up radically new ways to rethink a variety of fundamental concepts in all the social sciences. This ranges from risk and return to markets and governments in economics; attitudes toward ends and means in psychology; opportunism and altruism in social psychology; and even success and failure in strategic management. Effectuation theory inverts several older approaches in what Herbert Simon referred to as the 'sciences of the artificial'. These inversions suggest an entrepreneurial method based on non-predictive control that complements the predictive control techniques of the scientific method.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/fb1a01fbe49e8c8443d4c1bbedfd9ff96c9f3e54

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In Economics and Econometrics

Citations in the corpus

Entrepreneurship Within Urban and Rural Areas: Creative People and Social Networks (2014, background): “Particularly for entrepreneurs in urban areas, it is important to deal with the future uncertainties by turning to effectual reasoning instead of causal reasoning (SARASVATHY, 2008).”
Bridging Behavioral Models and Theoretical Concepts: Effectuation and Bricolage in the Opportunity Creation Framework (2016, positive): “Although effectuation was developed specifically from a study with expert entrepreneurs (Sarasvathy, 2008), this group of decision-making heuristics may apply to fields beyond entrepreneurship (Sarasvathy, 2001).”
Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society (2011, positive): “Effectuation is based on the notion that firm growth relies on dynamic and interactive judgments in which the future is unpredictable yet controllable through human action, and the belief that the environment can be enacted through choice (Sarasvathy, 2008).”
Entrepreneurship and Strategy in Emerging Economies (2013, background): “Bricolage and effectuation approaches to entrepreneurship may be especially relevant in the development of emerging economies as resources are scarce and markets underdeveloped (Sarasvathy, 2008; Baker & Nelson, 2005).”
Learning with the market: Facilitating market innovation (2015, background): “As effectuation logic proposes (Sarasvathy, 2008), market innovation is not the result of a linear process but rather of a highly iterative and dynamic one.”
Preparing for the future : development of an 'antifragile' methodology that complements scenario planning by omitting causation (2014, background): “Sarasvathy [48] has provided empirical evidence related to effectuation through a study of 27 entrepreneurs and cites a number of other empirical studies illustrating its beneficial effect on subsequent business performance.”
Exploring the resource logic of student entrepreneurs (2012, methodology): “For an extensive overview and discussion of these principles, see Sarasvathy (2008).”
Life After Business Failure (2013, background): “Finally, based on a study of expert entrepreneurs, Sarasvathy (2008) demonstrated how entrepreneurs seek to minimize the financial costs of failure by deploying the “affordable loss principle.””
Decision mode, information and network attachment in the internationalization of SMEs: A configurational and contingency analysis (2014, methodology): “Sarasvathy (2001; 2008) developed the concepts of causation and effectuation in order to describe entrepreneurial decision processes.”
The roles of learning orientation and passion for work in the formation of entrepreneurial intention (2013, background): “…the role of learning orientation in reinforcing the effect of desirability considerations in people’s career choices should be particularly salient in career situations marked by high levels of uncertainty and unexpected hurdles, such as entrepreneurship (Lent et al., 2004; Sarasvathy, 2008).”