Skip to main content
Log in

A structured literature review and suggestions for future effectuation research

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

In spite of all the scholarly attention it has garnered, effectuation research continues to face a series of theoretical and methodological challenges. In order to help move effectuation research forward, we content-analyze a comprehensive sample of 101 effectuation articles published in JCR®-listed journals between 1998 and 2016 (inclusively), with the specific aim of uncovering the main conceptual and methodological articulations that have underpinned effectuation research to date. In doing so, we not only uncover some the field’s achievements and shortcomings but also examine the extent to which published effectuation research addresses its most salient criticisms. We build on these observations to propose three recommendations for future advances, namely (1) conceiving effectuation as a “mode of action”; (2) developing new methodological indicators centered on effectuation’s concrete manifestations; and (3) examining the underlying dynamics explaining effectuation’s antecedents and consequences.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Alsos, G. A., & Clausen, T. H. (2014). The start-up processes of tourism firms - the use of causation and effectuation strategies. In G. A. Alsos, D. Eide, & E. L. Madsen (Eds.), Handbook of Research on Innovation in Tourism. Cheltenham: Edward Elgar.

    Google Scholar 

  • Alsos, G. A., Clausen, T. H., Mauer, R., Read, S. & Sarasvathy, S. (2016). Call for papers: special issue of small business economics: An Entrepreneurship Journal. Heidelberg: Springer.

  • Arend, R. J., Sarooghi, H., & Burkemper, A. (2015). Effectuation as ineffectual? Applying the 3E theory-assessment framework to a proposed new theory of entrepreneurship. Academy of Management Review, 40(4), 630–651.

    Article  Google Scholar 

  • Arend, R. J., Sarooghi, H., & Burkemper, A. C. (2016). Effectuation, not being pragmatic or process theorizing, remains ineffectual: Responding to the commentaries. Academy of Management Review, 41(3), 549–556.

    Article  Google Scholar 

  • Baron, R. A. (2009). 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. Journal of Business Venturing, 24(4), 310–315.

    Article  Google Scholar 

  • Berends, H., Jelinek, M., Reymen, I., & Stultiëns, R. (2014). Product innovation processes in small firms: combining entrepreneurial effectuation and managerial causation. Journal of Product Innovation Management, 31(3), 616–635.

    Article  Google Scholar 

  • Blauth, M., Mauer, R., & Brettel, M. (2014). Fostering creativity in new product development through entrepreneurial decision making. Creativity and Innovation Management, 23(4), 495–509.

    Article  Google Scholar 

  • Brettel, M., Mauer, R., Engelen, A., & Küpper, D. (2012). Corporate effectuation: entrepreneurial action and its impact on RandD project performance. Journal of Business Venturing, 27(2), 167–184.

    Article  Google Scholar 

  • Brown, T. (2009). Change by design: how design thinking creates new alternatives for business and society. New York: Harper-Collins.

    Google Scholar 

  • Chandler, G. N., DeTienne, D. R., McKelvie, A., & Mumford, T. V. (2011). Causation and effectuation processes: A validation study. Journal of Business Venturing, 26(3), 375–390.

    Article  Google Scholar 

  • Chetty, S., Ojala, A., & Leppäaho, T. (2015). Effectuation and foreign market entry of entrepreneurial firms. European Journal of Marketing, 49(9–10), 1436–1459.

    Article  Google Scholar 

  • Coviello, N. E., & Joseph, R. M. (2012). Creating major innovations with customers: Insights from small and young technology firms. Journal of Marketing, 76(6), 87–104.

    Article  Google Scholar 

  • Dancy, J., & Sandis, C. (Eds.). (2015). Philosophy of action: an anthology. Oxford: Wiley-Blackwell.

    Google Scholar 

  • Dess, G. G., & Robinson, R. B. (1984). Measuring organizational performance in the absence of objective measures: the case of the privately-held firm and conglomerate business unit. Strategic Management Journal, 5(3), 265–273.

    Article  Google Scholar 

  • Dew, N., Read, S., Sarasvathy, S. D., & Wiltbank, R. (2009). Effectual versus predictive logics in entrepreneurial decision-making: differences between experts and novices. Journal of Business Venturing, 24(4), 287–309.

    Article  Google Scholar 

  • Dimov, D. (2017). The reflective entrepreneur. New York: Routledge.

    Book  Google Scholar 

  • Dubin, R. (1969). Theory building. New York: Free Press.

    Google Scholar 

  • Ericsson, K. A., & Simon, H. A. (1993). Protocol analysis: verbal reports as data. Cambridge: MIT Press.

    Google Scholar 

  • Fisher, G. (2012). Effectuation, causation, and bricolage: a behavioral comparison of emerging theories in entrepreneurship research. Entrepreneurship Theory and Practice, 36(5), 1019–1051.

    Article  Google Scholar 

  • Gabrielsson, J., & Politis, D. (2011). Career motives and entrepreneurial decision-making: examining preferences for causal and effectual logics in the early stage of new ventures. Small Business Economics, 36(3), 281–298.

    Article  Google Scholar 

  • Garud, R., & Gehman, J. (2016). Theory evaluation, entrepreneurial processes, and performativity. Academy of Management Review, 41, 544–549.

    Article  Google Scholar 

  • Geroski, P. A. (1995). What do we know about entry? International Journal of Industrial Organization, 13(4), 421–440.

    Article  Google Scholar 

  • Golicic, S. L., & Sebastiao, H. J. (2011). Supply chain strategy in nascent markets: the role of supply chain development in the commercialization process. Journal of Business Logistics, 32(3), 254–273.

    Article  Google Scholar 

  • Gupta, V. K. & Bylund, P. (2017). Effectuation and the logic of action: a praxeological assessment of effectuation theory. Presentation made at the Babson College Entrepreneurship Research Conference, Norman, OK, June 7–10.

  • Gupta, V. K., Chiles, T. H., & McMullen, J. S. (2016). A process perspective on evaluating and conducting effectual entrepreneurship research. Academy of Management Review, 41, 540–544.

    Article  Google Scholar 

  • Harmeling, S. S., Oberman, S., Venkataraman, S., & Stevenson, H. H. (2004). That my neighbor’s cow might live: effectuation, entrepreneurship education, and regional development in Croatia. In S. A. Zahra, C. G. Brush, P. Davidsson, J. Fiet, P. G. Greene, R. T. Harrison, M. Lerner, C. Mason, G. D. Meyer, J. Sohl, & A. Zacharakis (Eds.), Frontiers of Entrepreneurship Research (Vol. 24, pp. 1–14). Wellesley: Babson College.

  • Harting, T. (2004). Entrepreneurial effectuation in a corporate setting: the case of Circuit City’s Carmax unit. Paper presented at the Babson Kauffman Entrepreneurship Research Conference, Glasgow, Scotland.

  • Hatchuel, A. (2001). Towards design theory and expandable rationality: the unfinished program of Herbert Simon. Journal of Management and Governance, 5(3), 260–273.

    Article  Google Scholar 

  • Kahneman, D., & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47, 263–291.

    Article  Google Scholar 

  • Knight, F. H. (1921). Risk, uncertainty and profit. Boston: Houghton Mifflin.

    Google Scholar 

  • Korsgaard, C. (2008). The constitution of agency. Oxford: Oxford University Press.

    Book  Google Scholar 

  • Luce, R. D., & Raiffa, H. (1957). Games and decisions: introduction and critical survey. New York: John Wiley and Sons.

    Google Scholar 

  • McMullen, J. S., & Dimov, D. (2013). Time and the entrepreneurial journey: the problems and promise of studying entrepreneurship as a process. Journal of Management Studies, 50(8), 1481–1512.

    Google Scholar 

  • McMullen, J. S., & Shepherd, D. A. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur. Academy of Management Review, 31(1), 132–152.

    Article  Google Scholar 

  • Midler, C., & Silberzahn, P. (2008). Managing robust development process for high-tech startups through multi-project learning: the case of two European start-ups. International Journal of Project Management, 26(5), 479–486.

    Article  Google Scholar 

  • Mises, L. V. (1949). Human action: a treatise on economics. New Haven: Yale University Press.

    Google Scholar 

  • Morsella, E., Bargh, J. A., & Gollwitzer, P. M. (Eds.). (2009). Oxford handbook of human action. Oxford: Oxford University Press.

    Google Scholar 

  • O’Connor, T., & Sandis, C. (Eds.). (2010). A companion to the philosophy of action. Oxford: Wiley-Blackwell.

    Google Scholar 

  • Perry, J. T., Chandler, G. N., & Markova, G. (2012). Entrepreneurial effectuation: a review and suggestions for future research. Entrepreneurship Theory and Practice, 36(4), 837–861.

    Article  Google Scholar 

  • Ramesh, A., Dew, N., Read, S. & Sarasvathy, S. D. (2018). Toward deliberate practice in the development of entrepreneurial expertise: the anatomy of the effectual ask. In The Cambridge Handbook of Expertise and Expert Performance (pp. 389–412). New York: Cambridge University Press.

  • Read, S., Dew, N., Sarasvathy, S. D., Song, M., & Wiltbank, R. (2009a). Marketing under uncertainty: the logic of an effectual approach. Journal of Marketing, 73(3), 1–18.

    Article  Google Scholar 

  • Read, S., Song, M., & Smit, W. (2009b). A meta-analytic review of effectuation and venture performance. Journal of Business Venturing, 24(6), 573–587.

    Article  Google Scholar 

  • Read, S., Sarasvathy, S. D., Dew, N., & Wiltbank, R. (2016). Response to Arend, Sarooghi, and Burkemper (2015): cocreating effectual entrepreneurship research. Academy of Management Review, 41, 528–536.

    Article  Google Scholar 

  • Reuber, A. R., Fischer, E., & Coviello, N. (2016). Deepening the dialogue: new directions for the evolution of effectuation theory. Academy of Management Review, 41(3), 536–540.

    Article  Google Scholar 

  • Reymen, I. M., Andries, P., Berends, H., Mauer, R., Stephan, U., & Burg, E. (2015). Understanding dynamics of strategic decision-making in venture creation: a process study of effectuation and causation. Strategic Entrepreneurship Journal, 9(4), 351–379.

    Article  Google Scholar 

  • Saldaña, J. (2015). The coding manual for qualitative researchers. Thousand Oaks: Sage.

    Google Scholar 

  • Sarasvathy, S.D. (1998). How do firms come to be? Towards a theory of the prefirm. Doctoral dissertation, Pittsburgh, PA: Carnegie Mellon University.

  • Sarasvathy, S. D. (2001). Causation and effectuation: toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2), 243–263.

    Article  Google Scholar 

  • Sarasvathy, S. D. (2003). Entrepreneurship as a science of the artificial. Journal of Economic Psychology, 24(2), 203–220.

    Article  Google Scholar 

  • Sarasvathy, S. D. (2004). The questions we ask and the questions we care about: reformulating some problems in entrepreneurship research. Journal of Business Venturing, 19(5), 707–717.

    Article  Google Scholar 

  • Sarasvathy, S. D. (2008). Effectuation: elements of entrepreneurial expertise. Northampton: Edward Elgar Publishing.

    Book  Google Scholar 

  • Sarasvathy, S. D., & Dew, N. (2005). Entrepreneurial logics for a technology of foolishness. Scandinavian Journal of Management, 21(4), 385–406.

    Article  Google Scholar 

  • Sarasvathy, S. D., & Kotha, S. (2001). Managing Knightian uncertainty in the new economy: the RealNetworks case. In J. Butler (Ed.), E-Commerce and Entrepreneurship (pp. 31–62). Greenwich: IAP 31–62.

    Google Scholar 

  • Sarasvathy, S. D., Simon, H. A., & Lave, L. B. (1998). Perceiving and managing business risks: differences between entrepreneurs and bankers. Journal of Economic Behavior and Organization, 33(2), 207–225.

    Article  Google Scholar 

  • Sarasvathy, S. D., Dew, N., Read, S., & Wiltbank, R. (2008). Designing organizations that design environments: lessons from entrepreneurial expertise. Organization Studies, 29(3), 331–350.

    Article  Google Scholar 

  • Sarasvathy, S. D., Menon, A. R., & Kuechle, G. (2013). Failing firms and successful entrepreneurs: serial entrepreneurship as a temporal portfolio. Small Business Economics, 40(2), 417–434.

    Article  Google Scholar 

  • Simon, H. A. (1973). The structure of ill structured problems. Artificial Intelligence, 4(3–4), 181–201.

    Article  Google Scholar 

  • Singapore & Israel. (2013) Technology analysis and strategic management, 25(7), 853–870.

  • Townsend, D., Hunt, R., Sarasvathy, S. D., & McMullen, J. (2018). Knowledge problems and entrepreneurial action. Academy of Management Annals. https://doi.org/10.5465/annals.2016.0109.

  • Venkataraman, S., Sarasvathy, S. D., Dew, N., & Forster, W. R. (2012). Reflections on the 2010 AMR decade award: whither the promise? Moving forward with entrepreneurship as a science of the artificial. Academy of Management Review, 37(1), 21–33.

    Google Scholar 

  • Wall, T. D., Michie, J., Patterson, M., Wood, S. J., Sheehan, M., Clegg, C. W., & West, M. (2004). On the validity of subjective measures of company performance. Personnel Psychology, 57(1), 95–118.

    Article  Google Scholar 

  • Wiltbank, R., Dew, N., Sarasvathy, S. D., & Read, S. (2006). What to do next? The case for non-predictive strategy. Strategic Management Journal, 27(10), 981–998.

    Article  Google Scholar 

  • Wiltbank, R., Read, S., Dew, N., & Sarasvathy, S. D. (2009). Prediction and control under uncertainty: outcomes in angel investing. Journal of Business Venturing, 24(2), 116–133.

    Article  Google Scholar 

Download references

Acknowledgements

We extend our warmest thanks to Professor Saras Sarasvathy for her keen editorial guidance; to Drs. Stuart Read, Gry Agnete Alsos, and René Mauer for their kind encouragements; to Jessica Chew for competent assistance in data collection; and to three anonymous reviewers for their useful observations and suggestions on prior versions of this manuscript. All errors and omissions remain ours.

Portions of this article’s analyses, observations, and suggestions for future research were presented at the 2017 EURAM Conference (Glasgow, Scotland) and at the 2017 Academy of Management Conference (Atlanta, GA). We thank participants for their observations.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Denis A. Grégoire.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Electronic supplementary material

ESM 1

(DOCX 52 kb)

ESM 2

(DOCX 115 kb)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Grégoire, D.A., Cherchem, N. A structured literature review and suggestions for future effectuation research. Small Bus Econ 54, 621–639 (2020). https://doi.org/10.1007/s11187-019-00158-5

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-019-00158-5

Keywords

JEL classification

Navigation