They look while they leap: Generative co-occurrence of enactment and effectuation in entrepreneurial action

Sanjay Bhowmick

Journal of Management & Organization, 2015, vol. 21, issue 4, 515-534

Abstract: It has been said that entrepreneurs plan in order to deal with market uncertainty. It has also been argued that entrepreneurs act spontaneously and with insufficient planning, as time is of the essence and as market uncertainty seldom yields to planning. Theoretically, in uncertain market conditions, the concept of effectuation posits that entrepreneurs control their resources enhancing them through likeminded stakeholder buy-ins towards creating an opportunity. Alternatively, the first prospective action steps under uncertainty are argued to be taken regardless of resources position, reflecting enactment before sensemaking. Thus, enactment embodies resource-independent action-embracing ambiguity, whereas effectuation, i.e., controlling resources and enhancing stakeholder buy-ins, represents resource-dependent action that mitigates ambiguity and risk. This paper proposes that prospective enactment action and effectuation control action are analytically distinct, complementary and simultaneous aspects of entrepreneurial action. It further proposes that successful outcomes of entrepreneurial action may be anticipated by a high and matching combination of enactment and effectual action in a generative co-occurrence. The paper illustrates the propositions using cases that exhibit diverse action outcomes. It also potentially reconciles the ambiguity-embracing or risk-taking approach and the ambiguity-reducing or risk-mitigating control approach in understanding entrepreneurial action seeking opportunity in an uncertain and dynamic market.

Date: 2015
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