Effectuation as an Advanced Theory- A Study of Alliance Between Academic Entrepreneurs & Large Firms

Abstract

Efforts to promote Effectuation as an advanced theory have recently taken a new direction by deviating from the dichotomy of Effectuation and causation and embracing more inductive approaches that enable scholars to advance Effectuation itself theoretically. In line with the recent works, this research adopts a theory elaboration approach with the aim of advancing Effectuation as an independent theory. Through a field study of twenty-five alliances between technology-based academic entrepreneurs and large firms, this study reveals how academic entrepreneurs’ means-based attitudes and behaviors and its intertwined notion of goal ambiguity respectively facilitate and impede building opportunity trust and commitment-based trust between two parties; and how large firms’ adoption of affordable loss contributes to alliance control. By doing so, this research contributes to both scholarship of Effectuation and inter-organizational relationships through building inter-relationships between Effectuation and two dominant alliance governance mechanisms (i.e., trust and control).