Effectuation and causation: Propositions about decision making process in business network environments

Abstract

This theoretical essay focuses on the dichotomous question concerning whether entrepreneurs adopt Effectuation or Causation decision making models. Decision making is an important theme in the studies of entrepreneurship. However, these models have not been explored in the context of business network environments. Due this gap, this essay proposes to examine the possible effects of the centrality of the firm on its organizational structure, and this latter on the predominance of entrepreneur's Effectuation or Causation decision making in a business network environment. It is argued here that to the extent that the firm acquires relevant resources while enhances its centrality in the network, changes will take place in its organizational structure over time forcing the entrepreneur adopt Causation instead of Effectuation. Four propositions support this argument. Business networks are appropriated environments to find evidences of where and when entrepreneurs are more likely to adopt one or another decision making model. The potential practical implications of this study are described as follow: i) not all relations are equally important for the growth of the firm; ii) it is suitable for entrepreneurs use Effectuation model when the organizational structure is simple and resources are non-relevant; iii) it is recommended for entrepreneurs use Causation model in situations where failures could be critical to the growth of the firm. The theoretical framework focuses on the concept of inter-organizational networks, on the transformation of the organizational structure and on the principles of Effectuation and Causation.

Effectuation: um estudo sobre as redes no processo de criação e desenvolvimento de negócios sociais

“…Alguns estudos sobre effectuation foram pelo caminho da pesquisa quantitativa, como uma meta-análise realizada pelos autores Read, Song e Smit (2009) (MARTELETO, 2001). Além disso, diversos autores as definem como as relações entre diversos atores por meio de laços (FOMBRUM, 1982;CASTELLS, 1999;ANTONIC, 2003;PORTUGAL, 2007;VERSCHOORE, 2008;CROOS 2003;LEMOS, 2016), sendo estas relações finitas (WASSERMAN; FAUST, 1994) e que podem ser baseadas em contratos informais (GRANDORI ; SODA, 1995).…”