Title page for ETD etd-07032011-122942


Document Type Master's Dissertation
Author Rust, Arne Francois
URN etd-07032011-122942
Document Title The impact of following a causation versus an effectuation approach on the survival of nascent entrepreneurial ventures in dynamic industries
Degree MBA
Department Gordon Institute of Business Science
Supervisor
Advisor Name Title
Mr G Fisher Supervisor
Keywords
  • effectuation
  • entrepreneurial survival
  • dynamism
  • PSED
Date 2010-11-10
Availability unrestricted
Abstract

This study determines the influence of causation versus effectuation on entrepreneurial firm survival in high and low dynamism industries.

Causation approaches a problem with the end in mind while effectuation’s point of departure is the means. Causal logic predicts a best case future scenario and then gathers the necessary resources to realize that scenario. This is contrasted by effectual logic that attempts to “control” the future by making use of the resources in hand (and those that can be borrowed) while trying to achieve the best possible result.

The study consists of a means analysis testing for firm survival in highly dynamic industries per “pure” causal or effectual approach and of a variance analysis, testing for survival as a function of the mixed use of causation and effectuation in both high and low dynamism industries.

The product of the means analysis indicates that only two entrepreneurs out of a cohort of 1771 follow a “pure” causal or “pure” effectual approach. As a result of this finding the incidence of “pure” causal or effectual approaches in either high or low dynamism industries is negligible. The output from the variance analysis indicates that causation is a significantly better predictor of entrepreneurial survival than effectuation in both high and low dynamism industries at a 99% confidence level. Below is a summary of the survival probabilities for both high and low dynamism industries across the causal/effectual decision spectrum.

This study determines the influence of causation versus effectuation on entrepreneurial firm survival in high and low dynamism industries. Causation approaches a problem with the end in mind while effectuation’s point of departure is the means. Causal logic predicts a best case future scenario and then gathers the necessary resources to realize that scenario. This is contrasted by effectual logic that attempts to “control” the future by making use of the resources in hand (and those that can be borrowed) while trying to achieve the best possible result. The study consists of a means analysis testing for firm survival in highly dynamic industries per “pure” causal or effectual approach and of a variance analysis, testing for survival as a function of the mixed use of causation and effectuation in both high and low dynamism industries. The product of the means analysis indicates that only two entrepreneurs out of a cohort of 1771 follow a “pure” causal or “pure” effectual approach. As a result of this finding the incidence of “pure” causal or effectual approaches in either high or low dynamism industries is negligible. The output from the variance analysis indicates that causation is a significantly better predictor of entrepreneurial survival than effectuation in both high and low dynamism industries at a 99% confidence level. Below is a summary of the survival probabilities for both high and low dynamism industries across the causal/effectual decision spectrum.

Copyright © 2010, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

Please cite as follows:

Rust, AF 2010, The impact of following a causation versus an effectuation approach on the survival of nascent entrepreneurial ventures in dynamic industries, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-07032011-122942/>

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