Although firms tend to rely on business plans and objective oriented approaches to their future, this paper presents an alternative model of strategy: the explorer's view of strategy. Saras Sarasvathy, a researcher at University of Virginia, found that serial or expert entrepreneurs operate under a different mode of thinking, which she calls effectuation. This paper traces how effectuation has roots in military history. Then, it explains how Sarasvathy arrived at her findings. It then presents Sarasvathy's five findings. 1) Entrepreneurs primarily form their objectives based on the resources available to them. 2) They focus on what they could lose rather than what they could expect to gain. 3) They focus on partnerships rather than competitors. 4) They continually refine their product or services by dialoguing with their stakeholders. 5) They deviate from their originally conceived business objective. Following that is an analysis of when effectuation is better employed by a firm than the classical approach to strategy. Finally, it concludes with two concrete examples. One of them shows how a big firm can utilize effectuation, and the other demonstrates how a big firm can face drastic losses by using the classical approach to strategy in an unsuitable context.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.