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Navigating Entrepreneurial Uncertainty: The Role of AI in Causal and Effectual Decision-Making in Early-Stage Ventures
Jager, C.D. de (2025) Navigating Entrepreneurial Uncertainty: The Role of AI in Causal and Effectual Decision-Making in Early-Stage Ventures.
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| Abstract: | Entrepreneurs play a significant role in economic growth and innovation. Their ventures usually encounter challenges, such as uncertainty, a lack of experience, and a lack of resources. Adaptive decision-making is needed to operate effectively within a volatile, uncertain, complex, and ambiguous (VUCA) environment. Entrepreneurs typically use either causation, a predictive and goal-oriented approach, or effectuation, which is adaptive and means-based. Effectuation works best in early-stage ventures that experience high uncertainty, leveraging available resources, strategic partnerships, and affordable-loss experimentation to find new opportunities. Artificial intelligence (AI) is a rapidly growing, game-changing technology for entrepreneurs, but its connection to entrepreneurial decision-making is underexplored. Particularly with causation and effectuation decision making logic. This study is based on a mixed-method approach with survey data and semi-structured interviews. Results provide practical implications for entrepreneurs and theoretical contributions through the extension of effectuation theory with AI to leverage decision-making. AI supports entrepreneurs by improving idea generation, improving efficiency, and reducing uncertainty through predictive analytics. Findings reveal that AI in early stage ventures helps with recognising opportunities, market analysis, and scenario building. AI shifts entrepreneurs toward a more hybrid decision-making approach, where AI tools introduce causal processes into effectuation, and at the same time, AI brings more adaptive, effectual characteristics to causation. AI allows for the co-existence and usability of both logics. Unfortunately, leveraging AI comes with challenges: e.g., sustainability issues, privacy of data, poor quality results, and distrust among users. Entrepreneurs can partly overcome these challenges by increasing knowledge about AI and checking AI output, rather than blindly trusting it. This study examines ways in which entrepreneurs use AI to leverage decision-making across venture lifecycles. Additionally, AI’s role in transitioning decision-making, changes in AI use across startup phases, and AI challenges are discussed. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/106822 |
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