Context and Success in Entrepreneurial Decision Making; An Empirical Validation

Effectuation theory claims to have superior predictive power over traditional ‘causal’ methods for understanding entrepreneurial decision making under conditions of uncertainty. While gaining a lot of support initially, with some scholars talking about a possible paradigm shift, recently there has been a call for more a more nuanced view. This thesis aims to contribute to this debate by quantitatively testing the relationship of several context variables with entrepreneurial decision making. Furthermore an attempt is made to construct a multidimensional construct to measure entrepreneurial success in a way that is aligned with effectual thinking. Data was collected from 87 expert and novice entrepreneurs by means of a survey, and an additional existing dataset containing 185 respondents was included bringing the total dataset to 272. Findings include evidence for the impact of cognition on decision making, and a moderating effect of culture on that relationship. Interestingly, no direct or moderating effect of expertise is found, even though this is a core argument for the proponents of effectuation theory. Furthermore effectuation is found to be moderately negatively correlated with causation, indicating that a dichotomous distinction between the two styles is not productive. It is concluded that entrepreneurial decision making is a complex process, dependent on subtle differences in contextual factors, but that effectuation might be a fruitful avenue to challenge existing and traditional models of entrepreneurship.