Abstract
Business growth is considered as one of the main topics of entrepreneurship research. Due to the increased interest on entrepreneurship, new theoretical perspectives have emerged to explain entrepreneurial behavior. One of these emergent theories is effectuation. It is widely known that entrepreneurs and owner-managers count on different decision-making logics during the internationalization of their ventures, including causal and effectual reasoning. Despite that the use of effectual reasoning has been generally linked to the early stages of the creation of a venture; it has recently been introduced to on the internationalization of SMEs research. Introduced by Sarasvathy (2001), effectuation logic is stated to grow in an unstable operating context where it is complicated to predict and in contrast, it is likely to unexpectedly respond to changes in the environment. Furthermore, it represents a typical shift in approaching entrepreneurship. In this theoretical paper, we first aim to highlight the evolution of the concept and the development of the effectuation theory within the literature. Furthermore, we explain the similarities and differences existing between causation and effectuation reasoning. Finally, we use the lens of effectuation to come up with an understanding of the internationalization of SMEs.
Highlights
It is widely known that business growth is essential in the entrepreneurship research.Researchers in the this field have always seen that decision making models based on rationality are engaged by neoclassical economics [1]
The traditional model usually describes the entrepreneurial actions of individuals within firms, by searching for fields/areas where the demand for a certain product or service surpasses its supply and discovering an entrepreneurial opportunity, before evaluating its exploiting options [6]
Causation and effectuation are both behavioral [3] and cognitive processes [1] used by entrepreneurs in opportunity identification and venture development
Summary
It is widely known that business growth is essential in the entrepreneurship research. Because the interest in entrepreneurship has increased, it has been noticed the emergence of new theoretical and relevant perspectives analyzing the entrepreneurial behavior [2]. In this regard, modern approaches, as effectuation [3] and bricolage [4], have commonly been known as emerging theories within the entrepreneurship research [5]. Modern approaches, as effectuation [3] and bricolage [4], have commonly been known as emerging theories within the entrepreneurship research [5] Such approaches are in contradiction with the traditional and classic models of entrepreneurial behaviors. It is in this sense that effectuation, which is considered as one of the most-cited emerging theories of entrepreneurship, has emerged [1]
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
