TOPIC 5 - The Basics of Venturing - Effectuation in Action (TP070223)

  The Basics of Venturing - Effectuation in Action

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

Although effectuation concepts are frequently linked to entrepreneurship, businesses can also use them. Many of the fundamental ideas of effectuation can be useful for corporate innovation, intrapreneurship, and strategic decision-making, even though the environment may change.

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

Their underlying presumptions about the nature of the entrepreneurial process and how entrepreneurs should approach making decisions and pursuing opportunities set effectuation apart from other entrepreneurship approaches. Effectuation vs. Causation: The difference between effectuation and causation is among the most important distinctions.

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

In entrepreneurship, the effective approach and the conventional (causal) approach are not inherently antagonistic; rather, they reflect various viewpoints and tactics that business owners can use in accordance with their objectives and situation. Despite having different philosophies and techniques, there are situations in which components of both systems are applied concurrently or in combination during the course of the entrepreneurial process.

 Does effectuation mean: “not planning”? 

In my opinion Effectiveness is not related to "not planning," but rather with highlighting a distinct method of planning as opposed to the more conventional causal techniques in entrepreneurship. Although planning is a necessary part of effectuation, it requires a more adaptable and flexible approach when dealing with unpredictability.

Are Effectuation and Lean Startup compatible?

Actually, Effectuation and Lean Startup are complementary approaches that work well together. Both strategies place a strong emphasis on trying things out, continuous learning, and responding to market feedback. While Lean Startup gives a framework for quickly testing hypotheses, verifying assumptions, and developing goods or services that satisfy customer needs, Effectuation offers a mentality and principles for managing uncertainty and making the most of already-existing resources. While Lean Startup offers strategies and tools for idea validation and venture scaling, Effectuation can provide valuable insights throughout the early phases of venture creation. When combined, they provide a comprehensive method of approaching entrepreneurship that blends strategic planning with practical experimentation.


Reference

1.Effectuation in five questions. (n.d.). Www.linkedin.com. https://www.linkedin.com/pulse/effectuation-five-questions-dr-carlos-morales

2‌.Effectuation. (2024). What is Effectuation? Effectuation 101. Effectuation.org. https://effectuation.org/effectuation-101

‌3.Coudounaris, D., & Arvidsson, H. (2021). Relationships between the Big-5 Model and Effectuation versus Causation Logics of Entrepreneurs in New Ventures: The Estonian IT Sector. Administrative Sciences, 11(4), 106. https://doi.org/10.3390/admsci11040106

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edited by Teoh Meng Lun







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