EFFECTUATION VS. CAUSATION: CAN ESTABLISHED FIRMS USE START-UP DECISION-MAKING PRINCIPLES TO STAY INNOVATIVE?

Pascal Henninger, Alexander Brem, Ferran Giones, Peter M. Bican and Christine Wimschneider
Additional contact information
Pascal Henninger: Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU), Chair of Technology Management, Dr.-Mack-Str. 81, 90762 Fuerth, Germany
Peter M. Bican: Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU), Chair of Technology Management, Dr.-Mack-Str. 81, 90762 Fuerth, Germany
Christine Wimschneider: Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU), Chair of Technology Management, Dr.-Mack-Str. 81, 90762 Fuerth, Germany

International Journal of Innovation Management (ijim), 2019, vol. 24, issue 01, 1-32

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.

Keywords: Effectuation; causation; decision-making principles; uncertainty; established companies; means orientation; affordable-loss orientation; contingency orientation (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.worldscientific.com/doi/abs/10.1142/S1363919620500024
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:ijimxx:v:24:y:2019:i:01:n:s1363919620500024

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1363919620500024

Access Statistics for this article

International Journal of Innovation Management (ijim) is currently edited by Joe Tidd

More articles in International Journal of Innovation Management (ijim) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().