The objective of this work is to identify evidences of the applicability of the effectuation theo... more The objective of this work is to identify evidences of the applicability of the effectuation theory on new businesses creation. The effectuation theory explains how the decision making process on the creation of new business or products occurs on environments with great uncertainty. For that matter a structured survey was applied to the founder of a company located in Picada Café. The conclusion is that there are evidences that this entrepreneur used the effectual logic on this new venture creation.
In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Beha... more In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ] present a clutch of ideas for explaining the behavior of established firms within an environment of well-defined markets, stakeholder relationships, technologies, and so on. In this paper, we outline a behavioral theory of the entrepreneurial firm that emphasizes transforming environments rather than acting within extant ones. In particular, we explicate three ideas that parallel key concepts in BTF: (1) accumulating stakeholder commitments under goal ambiguity (in line with a political conception of goals), (2) achieving control (as opposed to managing expectations) through non-predictive strategies, and (3) predominately exaptive (rather than adaptive) orientation.
ABSTRACT. In modern societies entrepreneurship and innovation are widely seen as key sources of e... more ABSTRACT. In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial inno- vation has also meant losses and hardships for some members of society: it is destructive of some stakeholdersÕ ...
In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relati... more In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relationships between effectuation, over-trust, and certain psychological characteristics of entrepreneurs. In this response we debate their article. Goel and Karri are correct in claiming that effectuation supposes over-trust. However, we argue that effectual logic works in a different way than they presented because it neither predicts nor assumes trust. Goel and Karri's article also draws attention to the behavioral assumptions underlying constructs such as over-(under) trust. Our suggestion is that effectuation is based on alternative behavioral assumptions that open up interesting avenues for future research in entrepreneurship.
Abstract Several streams of research in strategic management and organizational theory build upon... more Abstract Several streams of research in strategic management and organizational theory build upon the early work of Herbert Simon.Yet, as content analyses of articles published in leading management journals show, key ideas from his later years are for the most part either ...
University of Washington School of Business, Box 353200 Seattle WA 98195 VM: (206) 221-5369 FAX: ... more University of Washington School of Business, Box 353200 Seattle WA 98195 VM: (206) 221-5369 FAX: (206) 685-9392 Email: [email protected] ... To date, economics has failed to develop a useful theory of entrepreneurship because of its inability to
Several years ago Professor March pointed out that rational choice involves two guesses, a guess ... more Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures and the other the birth of a new industry to identify three logics that constitute working elements of a technology of foolishness: (1) the logic of identity, as opposed to the logic of preferences; (2) the logic of action, as opposed to the logic of belief; and (3) the logic of commitment, as opposed to the logic of transaction.
Current theories of the firm provide no explanation for entrepreneurial success except in terms o... more Current theories of the firm provide no explanation for entrepreneurial success except in terms of firm success. Even when the focus is on the entrepreneur, s/he is entirely cast as a bundle of traits/behaviors or heuristics/biases that serves to explain firm performance. In this article, I suggest putting the entrepreneur center stage, adopting an instrumental view of the firm. Drawing upon the work of Simon in symbolic cognition and Lakoff in semantic cognition, I explore how we can go beyond explanations based on economic forces and evolutionary adaptation to entrepreneurial effectuation; I end with specific research questions pertaining to firm design.
Both history of science and creativity research have shown that reformulating the questions we as... more Both history of science and creativity research have shown that reformulating the questions we ask can lead to breakthroughs more often than trying harder to search for more rigorous answers. In such a spirit of creative play, I suggest we throw away our obsession with dividing the world into entrepreneurs and nonentrepreneurs and focus instead on categories within entrepreneurs. In particular, (a) those who want to become entrepreneurs but do not suggest compelling research questions about barriers to entrepreneurship; while, (b) those who do become entrepreneurs need to develop expertise, impelling our research to focus on the rubric of design.
The objective of this work is to identify evidences of the applicability of the effectuation theo... more The objective of this work is to identify evidences of the applicability of the effectuation theory on new businesses creation. The effectuation theory explains how the decision making process on the creation of new business or products occurs on environments with great uncertainty. For that matter a structured survey was applied to the founder of a company located in Picada Café. The conclusion is that there are evidences that this entrepreneur used the effectual logic on this new venture creation.
In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Beha... more In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ] present a clutch of ideas for explaining the behavior of established firms within an environment of well-defined markets, stakeholder relationships, technologies, and so on. In this paper, we outline a behavioral theory of the entrepreneurial firm that emphasizes transforming environments rather than acting within extant ones. In particular, we explicate three ideas that parallel key concepts in BTF: (1) accumulating stakeholder commitments under goal ambiguity (in line with a political conception of goals), (2) achieving control (as opposed to managing expectations) through non-predictive strategies, and (3) predominately exaptive (rather than adaptive) orientation.
ABSTRACT. In modern societies entrepreneurship and innovation are widely seen as key sources of e... more ABSTRACT. In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial inno- vation has also meant losses and hardships for some members of society: it is destructive of some stakeholdersÕ ...
In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relati... more In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relationships between effectuation, over-trust, and certain psychological characteristics of entrepreneurs. In this response we debate their article. Goel and Karri are correct in claiming that effectuation supposes over-trust. However, we argue that effectual logic works in a different way than they presented because it neither predicts nor assumes trust. Goel and Karri's article also draws attention to the behavioral assumptions underlying constructs such as over-(under) trust. Our suggestion is that effectuation is based on alternative behavioral assumptions that open up interesting avenues for future research in entrepreneurship.
Abstract Several streams of research in strategic management and organizational theory build upon... more Abstract Several streams of research in strategic management and organizational theory build upon the early work of Herbert Simon.Yet, as content analyses of articles published in leading management journals show, key ideas from his later years are for the most part either ...
University of Washington School of Business, Box 353200 Seattle WA 98195 VM: (206) 221-5369 FAX: ... more University of Washington School of Business, Box 353200 Seattle WA 98195 VM: (206) 221-5369 FAX: (206) 685-9392 Email: [email protected] ... To date, economics has failed to develop a useful theory of entrepreneurship because of its inability to
Several years ago Professor March pointed out that rational choice involves two guesses, a guess ... more Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures and the other the birth of a new industry to identify three logics that constitute working elements of a technology of foolishness: (1) the logic of identity, as opposed to the logic of preferences; (2) the logic of action, as opposed to the logic of belief; and (3) the logic of commitment, as opposed to the logic of transaction.
Current theories of the firm provide no explanation for entrepreneurial success except in terms o... more Current theories of the firm provide no explanation for entrepreneurial success except in terms of firm success. Even when the focus is on the entrepreneur, s/he is entirely cast as a bundle of traits/behaviors or heuristics/biases that serves to explain firm performance. In this article, I suggest putting the entrepreneur center stage, adopting an instrumental view of the firm. Drawing upon the work of Simon in symbolic cognition and Lakoff in semantic cognition, I explore how we can go beyond explanations based on economic forces and evolutionary adaptation to entrepreneurial effectuation; I end with specific research questions pertaining to firm design.
Both history of science and creativity research have shown that reformulating the questions we as... more Both history of science and creativity research have shown that reformulating the questions we ask can lead to breakthroughs more often than trying harder to search for more rigorous answers. In such a spirit of creative play, I suggest we throw away our obsession with dividing the world into entrepreneurs and nonentrepreneurs and focus instead on categories within entrepreneurs. In particular, (a) those who want to become entrepreneurs but do not suggest compelling research questions about barriers to entrepreneurship; while, (b) those who do become entrepreneurs need to develop expertise, impelling our research to focus on the rubric of design.
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