Relationships between the Big-5 Model and Effectuation versus Causation Logics of Entrepreneurs in New Ventures: The Estonian IT Sector

Dafnis Coudounaris,Henrik Arvidsson

doi:10.3390/admsci11040106

Dafnis Coudounaris, Henrik Arvidsson

Open Access

https://doi.org/10.3390/admsci11040106

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Journal: Administrative Sciences	Publication Date: Sep 23, 2021
Citations: 3	License type: CC BY 4.0

Affiliation: University of Tartu, Aalborg University

Abstract

This study aims to investigate the influence of the big-5 personality traits on causation and effectuation decision-making logics using the entrepreneurial process theory. This is an empirical study based on 113 surveys of managers/entrepreneurs from the Estonian IT sector. The questionnaire was uploaded onto the online platform of connect.ee and the participants were invited to complete it. The study reveals that only conscientiousness positively and significantly predicts causation logic. However, four of the five factors of personality traits positively and significantly predict effectuation logic, i.e., openness, conscientiousness, extraversion, agreeableness, except for neuroticism. Furthermore, only nine of 25 hypotheses are positive and significant, and of the 11 relationships of the model, three are negative and non-significant for causation logic and eight are negative and non-significant for effectuation logic. Finally, there are another five relationships of the model which are positively but non-significantly related. Managers of IT companies in Estonia should think of shifting to effectuation logic as most personality traits predict effectuation logic, and therefore, there is the possibility of a better performance for IT firms. Eight of the 51 items of the model had standardised regression weights below the threshold of 0.500, but only four were extracted from the final model. The extraction of items from the model indicates the need for the re-identification of the constructs of personality traits using, for example, the six-factor personality traits.

Highlights

The process in which firms expand their business abroad and the processes behind it represent an area that is both interesting and complex
The study was based on the Estonian IT sector and 115 fully completed surveys were received through the platform connect.ee
There have been studies in different Eastern European countries on entrepreneurship as follows: Gawel and Głodowska (2021), who investigated the effect of economic dynamics on female entrepreneurship in the Visegrad countries, Czechia, Hungary, Poland, and Slovakia

Summary

Introduction

The process in which firms expand their business abroad and the processes behind it represent an area that is both interesting and complex. The focus shifted from viewing the firm as a solitary unit to more of a network approach (Johanson and Vahlne 2009). The question of how managers make their decisions in the internationalisation process is the one that very few researchers have focused on One theory that impacts the discourse (even if the theoretical framework is far from developed) is the theory of effectuation, presented by Saras D Sarasvathy. In her 2001 article “Causation and Effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency”, she, to a certain extent, builds upon the theoretical framework once created by Cyert and March (1963)

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