Effectuation (EF) and Causation (CS) on Venture Performance and Entrepreneurs’ Dispositions Affecting the Reliance on EF and CS

Yoon Jang Hyo and Cho Erin ()
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Yoon Jang Hyo: Entrepreneurship, School of Business Administration, Seoul School of Integrated Sciences and Technologies, Seoul, The Republic of Korea
Cho Erin: Strategic Design Management, Parsons School of Design, The New School, New York, USA

Entrepreneurship Research Journal, 2023, vol. 13, issue 2, 381-408

Abstract: This study investigates whether and how different decision logics (i.e., effectuation and causation) are linked to venture performance (i.e., annual average growth in revenue and profit as well as subjective assessments of venture performance and funding status). We also examine how dispositional characteristics of an entrepreneur (i.e., learning and performance goal orientations, ambiguity tolerance, desire for change, and locus of control) influence the use of different decision logics. The results indicate that causation has a significantly positive effect on revenue growth as well as subjective assessments of venture performance and funding status, while effectuation has a significantly negative effect on profit growth. We find that learning-goal orientation leads to a greater reliance on effectuation, while performance-goal orientation increases the use of causation. An internal locus of control positively affects the reliance on both effectuation and causation, while the desire for change increases the use of effectuation.

Keywords: effectuation; causation; ambiguity tolerance; desire for change; locus of control; goal orientation; venture performance (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/erj-2020-0054

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