How Entrepreneurs Think: Why Effectuation and Effectual Logic May be the Key to Successful Enterprise Entrepreneurship

Abstract

Recent research into effectuation and effectual logic show that entrepreneurs think and make decisions dramatically different than typical enterprise managers. One of the major issues in applying entrepreneurship and innovation to corporations is likely the misunderstanding and failed application of these core concepts to management practices. Thus, those studying intrapreneurship and innovation would find great value from this paper's discussion of effectuation and effectual logic as it explains its major differences between entrepreneurs and typical enterprise manager views as they pertain to: Goal setting, risk taking, resource selection and gathering, dealing with setbacks, building networks, and management control. To dive deeper into these valuable concepts, effectuation and its core principles were applied to the product development process and systems development process. This includes applying them to: Screening of ideas, business analysis, development, product validation, and the market launches phase of product development. This article should help those applying entrepreneurship practices to their organizations and result in more innovative managers and employees, or as the authors term it "enterprise entrepreneurs."

Citation

Duening, T., Shepherd, M. and Czaplewski, A. (2012), "How Entrepreneurs Think: Why Effectuation and Effectual Logic May be the Key to Successful Enterprise Entrepreneurship", International Journal of Innovation Science, Vol. 4 No. 4, pp. 205-216. https://doi.org/10.1260/1757-2223.4.4.205