Effectuation, Entrepreneurs Leadership Behavior, and Employee Outcomes:A Conceptual Model

Abstract

This study develops a conceptual framework for explaining how effectual and causal logics influence entrepreneurs' leadership behaviour and how that, in turn, impacts employee individual-level outcomes (commitment, extrinsic and intrinsic motivation, and creativity) and performance outcomes (employee work performance and firm performance). We propose that employees' commitment and motivation develop via distinct paths when entrepreneurs apply causal or effectual logics. We furthermore theorise that employees' creativity is facilitated by effectuation, but hindered by causation. These differences might explain firm internal consequences of applying effectuation as a decision logic.