Saras sarasvathy, a cognitive scientist, conducted a study of expert entrepreneurs. Effectuation through business examples and realistic thought experiments were illustrated. Effectuation evokes creative andeffectuation evokes creative and transformative tactics. The empirical basis for the theory of effectuation is laid in sarasvathy 1998, in which she used verbal thinkaloud protocols of 27 expert entrepreneurs that founded companies.
In 2001, sarasvathy introduced the concept of effectuation in entrepreneurship, which is opposed to the causal model based on neoclassical economics. Causation processes take a particular effect as given and focus on selecting between means to create that effect. Effectuation is, broadly, the type of thinking that expert entrepreneurs use but also, that humans use to design artifacts, products, firms, and marktets, and causation is, broadly, the type of thinking that rct formalizes. Traditionally, entrepreneurs have been assumed to be causal t thinkers.
University of virginia darden professor saras sarasvathys groundbreaking 2001 paper. Contrasting causation and effectuation sarasvathy, 2001, p. I illustrate effectuation through business examples and realistic thought experiments, examine its connections with existing theories and empirical evidence, and offer a list of testable propositions for future empirical work. Take a particular effect as given and focus on selecting between means to create that effect sarasvathy, 2001, p. Toward a theoretical shift from economic inevitability to entrepreneurial contingency, authorsaras d. The effectuation theory is relatively a new method thinking and decision making in the field of entrepreneurship developed by saras sarasvathy, a cognitive scientist and a university of virginia darden professor. Research on the effect of effectuation and causation on the performance of small firms and new ventures dates back to, at least, the early 1980s. Dec 11, 2014 sarasvathy distinguishes effectuation from causation. On the basis of a qualitative study with 12 managers from 10 swiss smallto. This document is intended to be introduced in an educational workshop as one of several supporting materials. She even called her pragmatist model of effectuation the inverse of the teleological model, which she labeled the causation model sarasvathy.
While sarasvathy has made significant contributions to the field, it is suggested that a more fruitful approach can follow if two modifications are made. Sarasvathy is a member of the strategy, entrepreneurship and ethics area. Effectuation the best theory of entrepreneurship you. Sarasvathy during her visit to lund university in sweden. The major contribution is the resulting validated scales that measure causation and effectuation. A comparison of students use of effectuation and causation.
On the one hand, it challenges long held beliefs about the nature of cause and effect in social science. Based on your assessment of the current situation facing your. On the other hand, it generates a host of new insights about social phenomena. In her book effectuation elements of entrepreneurial expertise sarasvathy shows how she found how these expert entrepreneurs used effectuation when creating ventures s. Sarasvathy university of washington in economics and management theories, scholars have traditionally assumed the existence of artifacts such as firmsorganizations and markets. Whereas sarasvathy in her seminal 2001 article distinguished effectuation from causal decisionmaking, still effectuation seems to get confused with ad hoc decisionmaking or strategy absence. Effectuation the best theory of entrepreneurship you actually follow, whether youve heard of it or not. Sarasvathy called this approach effectuation and she illustrates it with an example of a chef cooking a meal. Cocreating the future through the entrepreneurial method what the scientific method enabled number of ventures in the economy venture size most money spent most jobs come from 3. Sarasvathys principles for effectuation innovation and. Dec 05, 2014 effectuation presentation by saras sarasvathy 1.
Reasoning of using causation and effectuation logic jyx. Effectuation can be used in education to support selfefficacy and process understanding by letting the students identify the next, best step in order to solve the problem that they work with. Sarasvathy and dew 2005a contrast causation and effectuation as shown in table 1. Abstract since the early 2000s, effectuation has gained substantial interest in literature. It builds on the cognitive and socialpsychological schools of entrepreneurship and cognitive, contextual and creation views on entrepreneurial opportunities.
This research confirmed that causation and effectuation happen interchangeably and added that initial conditions level of. Causation processes take a particular effect as given and focus on. Several other courses of effectuation can be imagined. Jan 17, 2016 this is a short animation discussing effectuation, a business process for developing propositions. Effectuation is the opposite of causation, which was the general view on entrepreneurs prior to sarasvathy. Apply sarasvathys principles of effectuation as an approach to entrepreneurship in your teaching. Causation and effectuation were able to explain 14. Understanding effectuation problem space and solution principles 5.
Causation rests on a logic of prediction, effectuation on the logic of control. In your role as a designer, coming up with creative and innovative designs and ideas that should have a positive impact on both users and business is part of the job description, whether you are emplo. Check out this video by using causation the client chooses a menu in advance and the chef prepares this menu by looking for the right ingredients and following the recipes to make the dishes. Start taking action, based on what you have readily available. Pdf effectuation, an emerging theory of entrepreneurship. The basic principles of effectuation how to use what you. Apply sarasvathy s principles of effectuation as an approach to entrepreneurship in your teaching. Sarasvathy 2001 introduced effectuation theory as a logic of thinking, discovered through research, used by expert entrepreneurs in the. Sarasvathy 2001 proposed in her article that experts frame decisions according the effectual logic. Effectuation the focus is on using a set of evolvingthe focus is on using a set of evolving means to achieve new and different goals.
Effectuation and causation are described as generic decisionmaking mechanisms. Such decision making logic is causation, described by sarasvathy 2001, 2008, a traditional perspective on entrepreneurship. When is causation a better strategy then effectuation. Sarasvathy argued that decision making needs to be adaptive over time and responsive to. This is a short animation discussing effectuation, a business process for developing propositions.
As a result, we suggest a model in which effectuation could be used systematically together with causation in. In the eighteenth century, a potter named josiah wedgwood, realized that pots can carry peoples aspirations for social mobility. The concept of effectuation is as subtle as it is profound. Towards a theoretical shift from economic inevitability to entrepreneurial contingency. Causation versus effectuation in entrepreneurial decision. Understanding effectuation dynamics of the effectual process 6. Effectual thinkers believe that f fif i can control the future, i do not need to predict it. The underlying assumption in this theory is that if one can predict the future, it can be controlled. Effectuation and causation in entrepreneurship education. The causation and effectuation approaches to entrepreneurship. Causation processes take a reticular effect as given and focus on selecting between means to create that effect. Causation and effectuation processes the great washington.
This paper forms an appreciation of and a critical reflection on sarasvathys work on causation and effectuation models of entrepreneurship. In her groundbreaking research, sarasvathy, 2001, sarasvathy, 2008 advanced our understanding of the entrepreneurial process by describing two distinct approaches to new venture creation. The causation and effectuation concept have also been used by recent literature to explain the differences in the underlying logic of decisionmaking between expert entrepreneurs and novices. In addition to mba and doctoral courses in entrepreneurship at darden, she teaches in doctoral programs in europe, asia, latin america and africa. Saxion workshop for entrepreneurship educators saras sarasvathy 2. As specified by sarasvathy 2001, we also show that causation is negatively associated with uncertainty, while experimentation, a subdimension of effectuation, is positively correlated with uncertainty.
Causation is consistent with planned strategy approaches ansoff, 1988. The work of explored sarasvathys comment that causation and effectuation. Effectuation and causation university of twente student theses. Effectuation in entrepreneurship, a case study of bonusbox. A behavioral comparison of emerging theories in entrepreneurship research. While not using sarasvathys recently developed terminology, several studies were conducted to establish a. While causation is consistent with planned strategy approaches, including such activities as opportunity recognition and business.