Causation and effectuation processes: A validation study
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722 citations
Cites background or methods or result from "Causation and effectuation processe..."
...…strong behavioral alignment Table 4 Causation Approach to Entrepreneurship 37signals Bloglines del.icio.us Six Apart Flickr Trip Advisor Causation (Chandler et al., 2011; Sarasvathy, 2001) Identified and assessed long-run opportunities in developing the firm ✕ ✕ ✕ ✕ ✓✓ ✓ Calculated the returns of…...
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...Table 1 Entrepreneurship Theories 1....
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...The foundational articles relating to each of these theoretical perspectives were carefully reviewed, along with other articles that have examined behaviors pertaining to the various perspectives (e.g., Chandler et al., 2011, for causation and effectuation; Senyard et al., 2009, for bricolage)....
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...To this end, the items used in their Figure 3 Bricolage Approach to Entrepreneurship (Baker & Nelson, 2005) Penurious environment Bricolage: making do by applying combinations of resources on hand Seek resources; attempt to acquire standard resources Avoid new challenges Bricolage domains Inputs Regulatory/ institutional Customers Parallel bricolage: community of practice & bricolage identity Routinization Broader, richer, more demanding market No growth Growth Selective bricolage 1028 ENTREPRENEURSHIP THEORY and PRACTICE measurement instruments were adapted as a foundation to describe the entrepreneurial behaviors underlying each of the entrepreneurship theories....
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...Effectuation (adapted from Chandler et al., 2011; Sarasvathy, 2001) Items pertaining to the effectuation construct loaded onto four factors: Experimentation • Develops multiple variations of a product or service to arrive at a commercial offering: Creation of multiple different product prototypes…...
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603 citations
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Cites methods from "Causation and effectuation processe..."
...Building on relevant exemplars from this and other journals (Chandler et al., 2011; Lewis, 2003; Shipp et al., 2009; Tang et al., 2012), we followed a three-stage procedure to assess our instrument in terms of multiple dimensions of validity (Cook and Campbell, 1979; Scandura andWilliams, 2000)....
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424 citations
Cites background or methods from "Causation and effectuation processe..."
..., 2009), exploratory factor analysis (Chandler et al., in press), and ordinary least squares regression (Wiltbank et al., 2009). Such methods and techniques appear to be appropriate for this state of development. As effectuation research moves into an intermediate state, it is also increasingly important to implement rigorous methods to separate real from spurious results (Chandler & Lyon, 2001). This includes the use of appropriate control variables to strengthen the claim that a study’s independent variables are the cause of the observed effect in the dependent variable. A control variable is a variable that is included in an analysis to allow researchers to tap into the relationship between independent and dependent variables without interference. If relevant influences are not controlled, true effects may go unobserved and spurious effects may occur. If the introduction of appropriate control variables does not change the original relationship between the cause and effect variables, then claims of non-spuriousness are strengthened (Trochim, 2001). For example, the existing nonexperimental empirical effectuation literature has not measured or controlled for environmental uncertainty. Instead, Wiltbank et al. (2009) used control variables that seem to capture individuals’ general risk propensities. Although researchers have claimed that entrepreneurs generally possess higher risk propensities than non-entrepreneurs (Stewart & Roth, 2001) and therefore, an individual’s risk propensity may be related to the degree to which an individual uses effectuation versus causation, we do not believe that an individual’s risk propensity is an adequate proxy for situational uncertainty. Because the use of effectual and causal logics is a choice that an individual may make dependent on the amount of uncertainty that he or she perceives, we suggest that researchers who examine the effects of effectuation and causation should attempt to measure uncertainty and control for it. This leads to another related data analysis issue—the issue of endogeneity. In research models, a variable is endogenous if it is a function of other variables in the model. For example, a change in environmental circumstances that changes the level of uncertainty is an exogenous change if the level of uncertainty is not correlated with the error term. Perceptions of uncertainty, however, may be endogenous and may lead to endogenous changes in causation and effectuation and outcomes. The application of effectuation behaviors may also inject uncertainty into the process, another endogenous change. If perceived uncertainty is endogenous and entrepreneurs self-select into effectual or causal modes of operation, then one should also provide instrumental measures of effectuation. For a reference on how to control for endogeneity in empirical models, see Hamilton and Nickerson (2003). An additional issue related to endogeneity is the choice of independent and dependent variables studied in effectuation studies....
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...Note that Chandler et al. (in press) used methodologies consistent with the formative nature of the effectuation construct. Using these methodologies, they found that effectuation can be better understood as a formative construct rather than as a reflective construct, and they provided a validated effectuation measure consisting of four sub-constructs—experimentation, affordable loss, flexibility, and precommitments. They concluded, however, that additional measures should be developed. These new measures could incorporate other elements of effectuation that are shown to be central to effectuation (e.g., beginning with a given set of means). Future researchers could use different sample types and data collection methods, and they could include effectuation outcome variables as a means of validating effectuation as a formative construct (cf. MacKenzie et al.). Therefore, we suggest that researchers should consider the formative nature of the construct, and use appropriate methods to validate their measures. In addition, we suggest two specific formative measurement models that might be used for effectuation. MacKenzie et al. (2005) suggested that when a composite construct is the focus of research, investigators may want to use a mixed indicator measurement model such as the one diagrammed in Figure 1....
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..., 2009), exploratory factor analysis (Chandler et al., in press), and ordinary least squares regression (Wiltbank et al., 2009). Such methods and techniques appear to be appropriate for this state of development. As effectuation research moves into an intermediate state, it is also increasingly important to implement rigorous methods to separate real from spurious results (Chandler & Lyon, 2001). This includes the use of appropriate control variables to strengthen the claim that a study’s independent variables are the cause of the observed effect in the dependent variable. A control variable is a variable that is included in an analysis to allow researchers to tap into the relationship between independent and dependent variables without interference. If relevant influences are not controlled, true effects may go unobserved and spurious effects may occur. If the introduction of appropriate control variables does not change the original relationship between the cause and effect variables, then claims of non-spuriousness are strengthened (Trochim, 2001). For example, the existing nonexperimental empirical effectuation literature has not measured or controlled for environmental uncertainty. Instead, Wiltbank et al. (2009) used control variables that seem to capture individuals’ general risk propensities....
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...For example, in terms of effectuation- and causation-related behaviors, researchers could develop items similar to the following Likert scale items used by Chandler et al. (in press) to measure experimentation—“We experimented with different products and/or business models” and “We tried a number of different approaches until we found a business model that worked.” In terms of cognitive processes, researchers could develop measures similar to the following Likert scale items used by Wiltbank et al. (2009)—“As you assemble information Figure 1 Mixed Indicator Measurement Model for Effectuation...
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371 citations
Cites background from "Causation and effectuation processe..."
...…and Scott 2010; Lam 2010) – for example the effectuation principles used by entrepreneurs are barely compatible with the traditional rationales of banks, basing their financing decisions in project finance upon the long-term planning of stable cash flows (Chandler et al. 2011; Perry et al. 2011)....
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