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The mediating role of failure in the relationships between Causation, Effectuation and performance of SMEs

Eijsvogel, E.R. (2014) The mediating role of failure in the relationships between Causation, Effectuation and performance of SMEs.

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Abstract:Causation and effectuation are two alternative approaches that entrepreneurs use in the venture development process. Causation can be seen as a planned strategy approach with the underlying logic of prediction, as opposed to effectuation as an emergent strategy approach based on non-predictive control. Using an approach based on effectuation enhances the possibility of failure, in contrast to an approach based on causation, but effects of these failures lack empirical evidence. This research contributes to filling this gap, by investigating the role of failure in the relationships between effectuation and performance and causation and performance. In absence of direct effects of the main constructs of causation and effectuation on failure and performance, the constructs were investigated at a finer level of granularity and analyzed at dimension level. This resulted in several significant findings. Due to the low levels of reliability of the causation and effectuation dimensions and the sampling bias of this study, it can only be concluded that the sub-dimension affordable loss is significantly related to failures and its sub-dimension impact of failures. Besides these empirical findings, this study developed a reliable and valid scale for measuring failures in SMEs, and questions the reflective nature of the construct of effectuation.
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:http://purl.utwente.nl/essays/65611
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