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Can novice entrepreneurs use effectuation during the creatio of their first real-life venture? An action research experiment

Klein Ikink, Marleen (2013) Can novice entrepreneurs use effectuation during the creatio of their first real-life venture? An action research experiment.

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Abstract:	It is suggested that education might be an important contribution to entrepreneurship, which in turn is an important factor for enhancing economic development. This study focuses on the question what should be taught at universities and business schools in order to educate students (novice entrepreneurs) for entrepreneurship. One stream of literature that suggests to contribute to this question is effectuation. Sarasvathy (2001) found that expert entrepreneurs base their decision making on the logic ‘to the extent that we control the future, we do not need to predict it’, since they often face unpredictable and uncertain situations. This seems to be a very interesting add-on for entrepreneurship education. However, the current literature on effectuation is based on expert entrepreneurs, who are by definition not representative for the whole population of entrepreneurs, which also includes novices. Moreover, the general focus of current research is on the five principles that are formulated by Sarasvathy (2001; 2008) rather than on the process model, which illustrates the new venture creation process under effectual conditions. Therefore, the aim of this study is to contribute to the effectuation literature by an in-depth process study of effectuation applied by novice entrepreneurs in real-life situations, in order to find out if effectuation is a fruitful contribution to entrepreneurship education. I do this by applying action research as method, and simultaneously engaging in real-life new venture creation together with a student colleague. During a process of 7 months, we deliberately applied a variety of effectuation heuristics and reported our findings in personal diaries. By coding the qualitative data, this action research experiment provides new and detailed empirical insights into the dynamics of effectuation and into the effectual behaviors of novice entrepreneurs. For instance, the results suggest three distinct phases of the effectual process, various degrees of stakeholder commitments, and a focus on transparency and versatility as add-on evaluation and decision making criteria. Based on these findings, I introduce an adjusted process model of effectuation in order to make the effectuation theory more applicable for novice entrepreneurs in real-life unpredictable situation. This means that, overall, I can conclude that novice entrepreneurs can use effectuation as method, but only with some modifications of the process model. The findings of this study imply that the process model of effectuation is suitable as entrepreneurial method to teach and offer students at universities and business schools. Effectuation might be a good attempt to bridge the gap between purely theoretical teaching and real-life practical experiences as the theoretical construct is empirically evidenced as practical and normative method for novice entrepreneurs. Therefore, I suggest that adding effectuation as entrepreneurial method to the curriculum of entrepreneurship programs might be fruitful for the relevance and adequateness of these programs.
Item Type:	Essay (Master)
Faculty:	BMS: Behavioural, Management and Social Sciences
Subject:	85 business administration, organizational science
Programme:	Business Administration MSc (60644)
Link to this item:	https://purl.utwente.nl/essays/63461
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