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The influence of national culture on the use of effectuation and causation by American student entrepreneurs

Versluijs, W. (2012) The influence of national culture on the use of effectuation and causation by American student entrepreneurs.

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Abstract:As part of the EPICC Project this bachelor thesis researches how culture influences the use of effectuation and causation by American student entrepreneurs when making business decisions. It concentrates on Sarasvathy’s theory of effectuation, which entails focusing on means (effectuation) instead of goals (causation), and uses this upcoming framework to investigate how Hofstede’s cultural dimensions might affect student entrepreneurs in their decision making. Hypotheses are formulated in which Hofstede’s dimension of individualism, which is the highest in the United States of all measured countries, is linked to elements of effectuation or causation. Optimism, linked with individualism, is discovered from literature to be one of the aspects of the American culture that might influence this entrepreneurial decision making. Effectuation and causation each have different elements and the research measures the use of both opposing elements per category by conducting ‘think aloud’ business case interviews with 15 American student entrepreneurs, after which the protocols are coded to count the number of times different elements were mentioned. Via questionnaires, data on the participants’ optimism and other demographics is gathered. This data results in finding that the research sample is driven by means instead of goals, is focused on expected returns instead of affordable loss and does not show a significant preference for non-predictive or predictive control, for leveraging or avoiding contingencies and for analyzing competition or potential partnerships. The value of the case data is confirmed with the outcome of the questionnaires on the entrepreneur’s own company. Effectuation and causation as whole concepts are not correlated with optimism but two hypothesized links with optimism prove to be significantly present, in that a higher optimism leads to both less focus on affordable loss (a causal element) if two extreme cases are left out, and to a larger focus on goals instead (a causal element) of means if one case was left out. With that, it is concluded that there was no influence found from the American culture on the use of effectuation or causation as a whole by American student entrepreneurs, but the entrepreneurial processes are influenced by their country’s culture, in that optimism influences aspects of effectuation and causation.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:http://purl.utwente.nl/essays/62528
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