The effectiveness of effectuation: a meta-analysis on contextual factors

Abstract

PurposeEmpirical data on the impacts of entrepreneurial effectuation on firm performance are scattered and controversial. This study conducts a meta-analysis to obtain evidence on whether and under what conditions effectuation is valuable. A contextual framework is proposed that highlights the boundary condition of the performance impact of effectuation.Design/methodology/approachBoth the traditional approach of meta-analysis and advanced techniques of Bayesian meta-analytic tests are used to combine numerous studies from varied research contexts.FindingsMeta-analytic results show that effectuation generally has a positive impact on firm performance, and is context-dependent, leading to stronger performance for older firms and firms in high-tech industries and emerging countries.Originality/valueThe findings provide important implications for entrepreneurs who are considering applying effectuation. This study highlights that effectuation is context-dependent and the performance implications of effectuation are contingent on contextual factors at organizational, industrial and institutional levels. This study extends the contextual understanding of the effectuation–performance relationship.

Entrepreneurial networks, effectuation and business model innovation of startups: The moderating role of environmental dynamism

“…Scholars have criticized existing studies for failing to contextualize effectuation and have called for studies on the impacts of effectuation in different environments (Arend et al, 2015; Deng et al, 2021). In highly dynamic contexts, entrepreneurs tend to motivate stakeholders to invest resources to develop successful BMI, so as to create win–win situations (Alsos et al, 2020; Chen et al, 2021; Galkina & Chetty, 2015). The results support the view that effectuation is more effective in dynamic environments (Futterer et al, 2018; Peng et al, 2020; Reymen et al, 2015; Welter & Kim, 2018; Yu et al, 2018) and respond to calls to integrate the boundary conditions of effectuation (Chen et al, 2021; Welter & Kim, 2018).…”

“…Finally, having pre‐commitments is more viable way to stimulate start‐up BMI in highly dynamic environments. To reduce uncertainty, entrepreneurs seek to create win–win situations and motivate stakeholders to invest resources to develop successful BMI (Alsos et al, 2020; Chen et al, 2021; Galkina & Chetty, 2015). Therefore, it was hypothesized as follows:H4 Environmental dynamism positively moderates effectuation and BMI.…”

Effectual control and small firms' international performance: the mediating role of partnership and gaining new knowledge

“…To summarize, by using accumulated experience and developing new knowledge in the process of effectuation, applying effectual control enables the decision-makers to expand their control over the necessary resources and move forward under uncertainty of internationalization. Effectual control is likely to result in international opportunity creation under uncertainty and enhance the international performance of small firms (Chen et al, 2021). In this sense, strategy making process takes place because of a strong connection between decision-makers' cognitions and actions so that they create opportunities to successfully enter new markets.…”

“…However, there is scarce research that examines the interlinkages among entrepreneurial cognition, action and gaining new knowledge simultaneously (Welter et al. , 2016) and how they may influence internationalizing firms' performance (Chen et al. , 2021).…”

“…Muzychenko and Liesch, 2015;Sarasvathy et al, 2014). However, there is scarce research that examines the interlinkages among entrepreneurial cognition, action and gaining new knowledge simultaneously (Welter et al, 2016) and how they may influence internationalizing firms' performance (Chen et al, 2021). Research in this domain is important not only to verify the nomological network of IE for theory development and testing purposes, but also to develop a logical pathway to assist IE practitioners and policy makers.…”