TY - JOUR
T1 - Effectuation vs. Causation
T2 - Can established firms use start-up decision-making principles to stay innovative?
AU - Henninger, Pascal
AU - Brem, Alexander
AU - Giones, Ferran
AU - Bican, Peter M.
AU - Wimschneider, Christine
N1 - Publisher Copyright:
© 2020 World Scientific Publishing Europe Ltd.
PY - 2020/1/1
Y1 - 2020/1/1
N2 - More and more, established companies try to cooperate with start-ups, build their own, or try to imitate their mindsets. But, do they make decisions like expert entrepreneurs? Effectuation theory describes entrepreneurial decision-making, it has been popular in entrepreneurship research for the last two decades, but still underexplored in contexts such as established company's decision-making. Therefore, this study answers the question of which factors affect the use of effectuation in established companies. Furthermore, the current use of the start-up decision-making principle is investigated. The research results show a higher use of effectuation over causation (alternative mechanism) in established companies. However, decision-making principles like "Mean orientation" and "Contingency orientation" are still dominated by causation. Identified factors for implementing effectuation in established companies are divided into six categories. In particular, effectuation requires a high flexibility and willingness to change goals. Using the already available means and resources of a company to pursue new goals, is another argument for using effectuation. Additionally, a more open and transparent culture, encouraging the identification and admittance of mistakes, also supports the use of effectuation. Based on this research, established companies should be able to understand better on which factors the implementation of effectuation depends and where it makes sense to use it.
AB - More and more, established companies try to cooperate with start-ups, build their own, or try to imitate their mindsets. But, do they make decisions like expert entrepreneurs? Effectuation theory describes entrepreneurial decision-making, it has been popular in entrepreneurship research for the last two decades, but still underexplored in contexts such as established company's decision-making. Therefore, this study answers the question of which factors affect the use of effectuation in established companies. Furthermore, the current use of the start-up decision-making principle is investigated. The research results show a higher use of effectuation over causation (alternative mechanism) in established companies. However, decision-making principles like "Mean orientation" and "Contingency orientation" are still dominated by causation. Identified factors for implementing effectuation in established companies are divided into six categories. In particular, effectuation requires a high flexibility and willingness to change goals. Using the already available means and resources of a company to pursue new goals, is another argument for using effectuation. Additionally, a more open and transparent culture, encouraging the identification and admittance of mistakes, also supports the use of effectuation. Based on this research, established companies should be able to understand better on which factors the implementation of effectuation depends and where it makes sense to use it.
KW - affordable-loss orientation
KW - causation
KW - contingency orientation
KW - decision-making principles
KW - Effectuation
KW - established companies
KW - means orientation
KW - uncertainty
UR - http://www.scopus.com/inward/record.url?scp=85059653849&partnerID=8YFLogxK
U2 - 10.1142/S1363919620500024
DO - 10.1142/S1363919620500024
M3 - Article
AN - SCOPUS:85059653849
SN - 1363-9196
VL - 24
JO - International Journal of Innovation Management
JF - International Journal of Innovation Management
IS - 1
M1 - 2050002
ER -