Effectuation vs. Causation: Can established firms use Start-Up Decision-Making Principles to stay innovative?

Pascal Henninger, Alexander Brem, Ferran Giones, Peter Bican, Christine Wimschneider

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

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.
Original languageEnglish
JournalInternational Journal of Innovation Management
ISSN1363-9196
DOIs
Publication statusE-pub ahead of print - 3. Jan 2019

Fingerprint

Decision making
Industry
Start-up
Causation
Effectuation
Factors

Keywords

  • Effectuation
  • affordable-loss orientation
  • causation
  • contingency orientation
  • decision-making principles
  • established companies
  • means orientation
  • uncertainty

Cite this

@article{53cab17e9dae4840843ce496b9dfa22a,
title = "Effectuation vs. Causation: Can established firms use Start-Up Decision-Making Principles to stay innovative?",
abstract = "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 (alternativemechanism) 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.",
keywords = "Effectuation, affordable-loss orientation, causation, contingency orientation, decision-making principles, established companies, means orientation, uncertainty",
author = "Pascal Henninger and Alexander Brem and Ferran Giones and Peter Bican and Christine Wimschneider",
year = "2019",
month = "1",
day = "3",
doi = "10.1142/S1363919620500024",
language = "English",
journal = "International Journal of Innovation Management",
issn = "1363-9196",
publisher = "Imperial College Press",

}

Effectuation vs. Causation: Can established firms use Start-Up Decision-Making Principles to stay innovative? / Henninger, Pascal; Brem, Alexander; Giones, Ferran; Bican, Peter; Wimschneider, Christine.

In: International Journal of Innovation Management, 03.01.2019.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Effectuation vs. Causation: Can established firms use Start-Up Decision-Making Principles to stay innovative?

AU - Henninger, Pascal

AU - Brem, Alexander

AU - Giones, Ferran

AU - Bican, Peter

AU - Wimschneider, Christine

PY - 2019/1/3

Y1 - 2019/1/3

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 (alternativemechanism) 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 (alternativemechanism) 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 - Effectuation

KW - affordable-loss orientation

KW - causation

KW - contingency orientation

KW - decision-making principles

KW - established companies

KW - means orientation

KW - uncertainty

U2 - 10.1142/S1363919620500024

DO - 10.1142/S1363919620500024

M3 - Journal article

JO - International Journal of Innovation Management

JF - International Journal of Innovation Management

SN - 1363-9196

ER -