Purpose The purpose of this paper is to address the stages of development of effectuation theory and highlight the progression from the early years’ conceptual articles to the recent empirical papers, characterized by specific, measurable research questions. Design/methodology/approach In total, 81 peer-reviewed academic journal articles featuring effectuation as a main subject were analyzed using Scandura and Williams’ (2000) modified version of McGrath’s typology of research strategies. The framework of Edmonson and McManus (2007) is employed to evaluate the maturity of the research program. Findings The main outcome is to introduce four main streams linked to effectuation theory in the current scientific dialogue: innovation and product development, internationalization, effectuation and causation simultaneously, and entrepreneurial expertise. Research limitations/implications The current study is reliant on retrospective data, which might influence the accuracy and completeness of this study, which typically leads to rationalized versions of history-associated causal decision making. Practical implications This study illustrates why effectuation theory should no longer be associated only with new ventures and startups. The majority of recent studies have presented the results of effectuation logic in the context of established companies. Social implications This follow-up review presents evidence that effectuation research has moved on from the nascent to the intermediate stage of development. Furthermore, the results indicate that it has already begun its transition toward the mature stage of development. Originality/value This study reveals the ongoing spirited battle between the convergent and divergent groups involved in the scientific debate around effectuation theory.
PurposeThis paper examines how digitalization can affect three aspects of firm growth. The specific objectives are as follows: (1) to increase understanding of how digitalization affects pre-factors for growth, (2) to examine how digitalization transforms the growth process, especially growth strategies and (3) to examine how digitalization is apparent in the outcome of growth.Design/methodology/approachWe explore six Finnish growth companies in order to understand the relationship between digitalization and growth. We used qualitative data collection and the Digimat measurement test for analyzing patterns, themes and best practices to generate a deeper understanding of the impact of digital technologies on business growth and growth strategies in these companies.FindingsWe propose that business growth includes three aspects of growth: pre-factors of growth, growth as a process and growth as an outcome. Digitalization may affect all of these aspects and strategic flexibility can affect business growth. Digitalization and strategic flexibility are intertwined; strategic flexibility enables the application of new technology, and digitalization enables flexibility.Practical implicationsBuilding on the results of the case studies, this research identifies relationships between digitalization, business growth and strategic flexibility.Originality/valueThis paper contributes to the growing literature on digitalization, providing new insight into its relation to business growth.
This multiple case study illustrates how ten selected industrial companies have managed to accomplish rapid growth after a long period (3–5 years) of slow growth. A particular aim was to determine whether these companies grew by adapting to the situation and responding to the demands of the market with their resources (effectuation) or by following previously determined plans and proceeding towards set goals (causation). Effectuation was originally connected to the creation of new business activities and an operating model covering the early stages of an organisation’s growth. However, recent studies have considered effectuation in the context of an existing business. This paper adds business growth to the context of established companies and explores the roles of effectuation and causation in their growth processes. The findings indicate the usage of both logics, but in nine of the ten companies’ effectuation influences as the dominant approach. Only one of the ten studied companies can be stated to follow the operating principles of causation.
This study examines the effect of digital capability on firm performance and firm growth. We apply the resource-based view and especially its expansion of the dynamic capabilities perspective to illustrate how digital capability is positively related to firm performance and firm growth, and how firm size is a relevant factor in explaining digital capability in incumbent SMEs. The context of this study is Finnish SMEs. The data were gathered from 242 SME owner-managers and analysed with structural equation modelling. The results show that smaller firms have less digital capability than larger SMEs and that smaller firms struggle with performance indicators. Digital capability is positively related to firm performance and firm growth. Our results indicate that although several factors explain and alter the course of firm growth, digital capability can boost the opportunity creation process, and aid survival in the face of competition. Digital capability is an important resource in SMEs and allows firms to safeguard the sustainability of their business model. We argue that digital capability is strongly related to SME’s management practices and SME owner/manager’s commitment to responding to digital transformation. This research sheds light on the importance of strategic leaders’ perceptions of digital capability on incumbent SMEs’ competitive advantage, and contributes both entrepreneurship theory and practice.
Business transfers are linked to both the beginning and the end of entrepreneurial processes. A person can become an entrepreneur by acquiring an existing business instead of starting one, and exit from entrepreneurship can occur through selling the business. Business transfers are gradually becoming more common among small businesses, largely due to entrepreneurs’ aging, and thus deserve attention from entrepreneurship scholars. In particular, the issue of why and how business transfer negotiations fail without achieving a transfer has received little research attention. The purpose of this paper is to explore this phenomenon from potential buyers’ and sellers’ perspectives. The findings are based on a sample of 156 responses. The results suggest that the problems occurring in unfinished business transfers are quite numerous and the gaps between the views of the two negotiating parties are wider than in cases where business transfer negotiations are concluded successfully, indicating that the initial negotiation positions can be crucial. This research proposes some key elements to consider when planning an exit by business transfer and highlight the importance of unfinished small business transfers as an essential element of a dynamic business transfer market; a substantial proportion of the potential buyers and sellers are satisfied with the outcome even though the transfer did not occur.
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