TOPIC 5 -Effectuation

Can effectuation also be used in companies? Or is it useful only for entrepreneurship? 

Effectuation isn't limited to entrepreneurship; it can be applied in any environment where the future is unpredictable, and there's a need for innovation and flexibility. In a commercial setting, effectuation can help companies navigate through uncertain requests, create new business models, and foster invention.  (Effectuation in Large Firms A Review and Future Directions) 

What's the key difference between effectuation and other approaches in entrepreneurship?     

The primary difference between effectuation and other entrepreneurial approaches is the underlying sense. Effectuation is a principles- based approach, focusing on the means (who, what, how) and using non-predictive strategies. In difference, causation approaches are thing- based, emphasizing predictive strategies and focusing on the desired ends. Effectuation is further about using the resources on hand, building partnerships, and putting to emerging opportunities. 

Are the effectual approach and the traditional( causal) approach mutually exclusive? 

No, the effectual and causal approaches aren't mutually exclusive. Entrepreneurs can use a combination of both styles depending on the environment, their particular preferences, and the level of query they face. In fact, research shows that entrepreneurs often switch between operative and causal logics as their enterprises evolve. (Effectuation and Causation Towards a Synthetic View of Entrepreneurial Expertise) 

Does effectuation mean “ not planning ”? 

Effectuation doesn't mean" not planning." Instead, it suggests a different kind of planning, one that's flexible and adaptable. Effectuation emphasizes contingency planning, which involves preparing for various possible scenarios and being ready to pivot when demanded. It's about making decisions and taking actions based on the resources at hand and the relationships set up, rather than following a rigid, destined plan. 

Are Effectuation and Lean Startup compatible? 

Yes, Effectuation and Lean Startup are compatible. Both approaches partake a common thing of minimizing waste, uncertainty, and threat. Lean Startup focuses on rapid trial and customer feedback to iteratively develop and upgrade a business model, while Effectuation emphasizes using existing resources and relationships to produce and adapt to new opportunities. By combining these two approaches, entrepreneurs can make a solid foundation and adapt to arising opportunities in a fast- changing environment. 

EDITED BY (YAP JUN KIT TP071689)

References

https://effectuation.org/hubfs/Journal%20Articles/2017/05/ContentServer.pdf