Combining effectuation and causation approaches in entrepreneurship: A 20+ years review

Abstract

Objective of the study: This paper gathers, and reviews published empirical or theoretical articles in which the entrepreneurial logics of causation and effectuation, coined by Sarasvathy in 2001, are discussed to answer the research question of “Under what circumstances do firms combine effectuation with causation?”. Methodology/approach: The research is based on a systematic literature review of top-tier journals over a 20-year period. Main results: Findings suggest causation and effectuation logics can be applied simultaneously or in sequence, depending on factors at the micro (the entrepreneur), meso (the firm), and macro levels (business context—institutional and situational). Theoretical/methodological contributions: It delivers a compiled, synthesized, and contrasted set of past work for future researchers to build upon and a preliminary conceptual matrix for further testing and refinement, not to mention an in-depth discussion at the micro, meso and macro level. Relevance/originality: Over 20 years after Sarasvathy’s seminal work, most literature investigating decision-making still focuses on contrasting the logics of causation or effectuation, not fully understanding the conditions under which each prevails or when they are combined. Social/management contributions: At the micro level, this research can help entrepreneurs better understand their profile and the benefits of considering both logics throughout their decision-making process. At the meso level, companies can benefit from understanding how logics relate at each life stage. Finally, at the macro level, policymakers and educators can help entrepreneurs navigate uncertain and turbulent environments if different logics and circumstances are more broadly acknowledged.

Keywords

• Effectuation
• Systematic literature review
• Decision-making
• Entrepreneurship