Saras D. Sarasvathy

Saras D. Sarasvathy
University of Virginia | UVa · Darden School of Business

PhD

About

123
Publications
251,466
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18,051
Citations
Citations since 2017
15 Research Items
10712 Citations
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201720182019202020212022202305001,0001,500
201720182019202020212022202305001,0001,500

Publications

Publications (123)
Article
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The neglect of marginalized stakeholders is a colossal problem in both stakeholder and entrepreneurship streams of literature. To address this problem, we offer a theory of marginalized stakeholder-centric entrepreneurship. We conceptualize how firms can utilize marginalized stakeholder input actualization through which firms should process a varie...
Article
When building new ventures, entrepreneurs confront the three problems of Knightian uncertainty, goal ambiguity, and isotropy. The literature on effectuation offers a framework for action, interaction, and reaction within the prediction control space that can help entrepreneurs tackle the above three problems. In this article, we offer a framework c...
Conference Paper
As the study of entrepreneurship continues to advance, recognition of the role of theory in the development of the field grows. In this paper, we build on our collective experiences to offer a peak into the inner working of theorizing and highlight how specifically to develop theoretical insights for advancing entrepreneurship scholarship. Four pri...
Article
As the study of entrepreneurship continues to advance, recognition of the role of theory in the development of the field grows. In this paper, we build on our collective experiences to offer a peak into the inner working of theorizing and highlight how specifically to develop theoretical insights for advancing entrepreneurship scholarship. Four pri...
Chapter
Full-text available
Entrepreneurial expertise consists in nonpredictive heuristics grouped under the rubric of effectuation. The principles and process of effectuation specify ways to tackle multiple uncertainties, allowing the cocreation of innovative upsides even without large, upfront investments. In focusing attention on the differences between risk and uncertaint...
Article
Gestation speed has long been acknowledged as an important proximate measure of venture performance. Yet, research into its antecedents remains scarce. Through a longitudinal study of eight new technology ventures, we examine in-depth the relationships between the use of causal and effectual logics and gestation speed. Our data show that heuristics...
Article
Building on several studies of actions and interactions in the daily practices of entrepreneurs, I develop six principles of venturing design based on the ask, with the pitch bring one specific subset of the ask. Deliberate practice of the ask has been argued to lead to the development of entrepreneurial expertise. I link that to a theoretical exam...
Article
The prediction-control (PC) space offers a theoretical framework for the entrepreneurial method and shows how it can foster the development of a middle class of business, defined as ventures that grow and endure over time, but don’t necessarily grow very large in size. Analogous to the middle class in history fostered by the scientific method, the...
Article
Full-text available
Reflecting on the 12 works that compose this special issue, we are struck by the distinctiveness of effectuation as a theory native to the domain of entrepreneurship. While theoretical perspectives from disciplines including economics, psychology, and sociology have been applied to understanding the new venture phenomenon, entrepreneurship scholars...
Article
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In this essay we argue that the exclusive focus on research aimed at isolating the characteristics of entrepreneurs as opposed to others, while intellectually exciting and even practically valuable, may have blinded us to another wholly new and exciting possibility – namely, the design of mechanisms that allow all kinds of individuals to start new...
Article
Attempting to stimulate economic growth, governments have developed a host of entrepreneurial policy incentives. Yet such incentives have not been evaluated in terms of their attractiveness to high potential entrepreneurs facing the choice between wage employment and entrepreneurship. Using adaptive conjoint analysis and a sample of graduating MBA...
Article
Within the growing literature on new market development, much work focuses on the industry, competition and firm units of analysis. In this paper we complement these understandings of how new markets unfold with research examining how individual decision-makers think about the task of building new markets. We replicate an entrepreneurship protocol...
Article
This study explores the impacts of psychological factors on entrepreneurs’ preferences for causal and effectual decision-making logics. Data were collected in the USA and China. The research findings suggest that self-efficacy was positively related to the control decision-making logic and the prediction decision-making logic both in the USA and Ch...
Article
We extend research on the speed of new venture internationalisation by distinguishing between effectual and non-effectual (i.e. causal) network-building approaches, and conceptualising their differential effects on the dimensions of initial entry speed, country (i.e. international) scope speed and international commitment speed. Drawing upon the ex...
Article
Full-text available
Whether business venturing emerges in the context of nascent-stage start-ups or corporate giants, one of the enduring and fundamental assumptions underlying theories of entrepreneurial action is that entrepreneurs operate in uncertain environments. And yet, nearly a century since the unveiling of Knightian uncertainty as a precursor to profit-makin...
Article
Extant literatures on serial and habitual entrepreneurship contain inconclusive findings about the differential impact of learning from success and failure. Yet there are no published studies combining both the restart decision and restart performance after previous failure or success with a first venture. Using a comprehensive longitudinal dataset...
Article
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On the basis of a qualitative study of 25 renewable energy firms, we theorize why and how individuals engage in environmental entrepreneurship, inductively defined as: the use of both commercial and ecological logics to address environmental degradation through the creation of financially profitable organizations, products, services, and markets. Our fi...
Article
There is increasing interest in the study of exaptation as a key evolutionary force that generates novelty in economic systems. This article contributes to this growing literature by showing how entrepreneurial behavior may effectually construct new market niches enabled by exapted innovations. Put differently, new technologies—whatever their sourc...
Book
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If you want an instructor copy of this book please contact the publisher directly (the authors cannot share soft copy with you): -------------------------------------------------------------------------------- https://www.routledge.com/resources/compcopy/9781315684826 ---------------------------------------------------------------------------------...
Article
Full-text available
Significant evidence has accumulated describing the importance of expertize. As this knowledge is extended, it is critical to understand when expertize matters and how. We unpack expertize in entrepreneurial decision making by presenting 412 founder/entrepreneur subjects with a unique tool involving four scenarios so we can measure an element of th...
Article
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A letter to the editor is presented in response to the article "Effectuation as Ineffectual? Applying the 3E Theory-Assessment Framework to a Proposed New Theory of Entrepreneurship" by R.J. Arend, H. Sarooghi, and A. Burkemper in volume 40 of the periodical.
Chapter
Business angel “networks,” such as the Band of Angels in Silicon Valley and the Alliance of Angels in the Pacific Northwest have been forming at a rapid pace. It is estimated that there are over 150 business angel networks in the United States and several in European and Asian countries. Books and web sites on business angels continue to proliferat...
Chapter
Recently there is a move to study entrepreneurship as expertise: a set of skills, models, and processes that can be acquired with time and deliberate practice. Effectual reasoning, or expert entrepreneurial reasoning, however, does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently o...
Book
Full-text available
Research in entrepreneurship has been booming, with perspectives from a range of disciplines and numerous developing schools of thought. It can be difficult for young scholars and even long-time researchers to find their way through the lush garden of ideas we see before us. The purpose of this book is to map the research terrain of entrepreneursh...
Article
Our stakeholder-centric entrepreneurship framework offers a perspective on how to combine entrepreneurial opportunities as means and stakeholder capability as ends so that firms can address critical social problems while remaining innovative and competitive. When firms adopt marginalized stakeholders capability development, firms provide stakeholde...
Article
Effectuation changed the way we think about entrepreneurship. Until recently, most research in entrepreneurship conceptualizes new venture creation as a rational, goal-driven, and mostly linear process. Sarasvathy’s work (2001, 2008) though suggests that entrepreneurs employ a different logic when pursuing opportunities. Despite the perceived growi...
Article
Full-text available
The purpose of this paper is to provide a constructive criticism of Corporate Social Responsibility (CSR) standards. After pointing out a number of benefits and limitations in the effectiveness of CSR standards, both from a theoretical point of view and in the light of empirical evidence, we formulate and discuss a Paradox of CSR standards: despite...
Article
It is commonly understood that entrepreneurs need to create value for different stakeholders in order for their ventures to be successful in the long run. However, if we were to ask what is this “value”?, there would hardly be a satisfactory answer. For some, value is profits for shareholders, for some others – it is an intangible benefit that cann...
Article
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The conceptualization of opportunities at the core of the research field of entrepreneurship has led to a growing stream of interesting work. This essay seeks to build on that scholarship and focus the conversation on the downside of opportunities. Focusing on the downside puts the person back in the personopportunity nexus, puts the nexus into the...
Chapter
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Chapter
The recognition that cognition is embodied within entrepreneurs as unique people sets the stage for an examination of both formal and informal models as tools for entrepreneurial cognition research. To minimize the loss in fidelity, as researchers construct models to represent more complex phenomena, models must be: simple, parsimonious, observable...
Article
Full-text available
In this paper, we outline several interesting observations about international entrepreneurship (IE) research through the theoretical lens of effectuation. In doing so, we show how an effectual approach can help resolve four central conflicts and knowledge gaps identified in two recent comprehensive reviews of IE. We then present an illustrative ca...
Article
To date, entrepreneurial performance has mostly been measured through economic indicators. In this paper we take a process view of entrepreneurship and argue that a more accurate assessment would incorporate impact on all stakeholders and not only on those who finance the venture. We draw upon research from Entrepreneurial Performance, Stakeholder...
Article
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November 14, 1997, Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania Herbert Simon, the chairman of the panel, opened the proceedings by laying out the ground rules and objectives. He explained that the seminar was meant to be primarily a conversation among the participants with some inputs from the...
Article
In this essay, I remember Herbert Simon as author of Sciences of the Artificial and my thesis advisor and collaborator. Even for a lifetime of deep insights into human behavior and its role in shaping the world we live in, Simon’s insight into the need for a whole new class of sciences is an astonishing one. The artificial is essential for entrepre...
Article
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Decision makers struggling with uncertainty can choose from a trio of probabilistic models to match the type of risks they face.
Article
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Drawing on collective action theory and an exploratory study of 22 renewable energy firms, we develop an entrepreneurial process model of collective action. Our analysis shows how individual entrepreneurs can initiate solutions to collective action solutions either by: (1) actively creating selective incentives that induce cooperation to preserve c...
Article
When looked at through an effectual lens, findings from empirical work in family business research till date offer interesting insights about opportunities for and hindrances to the use of effectual logic. We examine these in this note with a view to developing an agenda for future research at the intersection.
Article
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The authors discuss value creation in public-private business ventures, commenting on the article "Creating and Capturing Value in Public-Private Ties: A Private Actor's Perspective," by I. Kivleniece and B. V. Quelin, published elsewhere in the issue. According to the authors, behavioral docility in management can facilitate intersubjective intera...
Article
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In this article we speak of roads taken and paths yet to be traversed. Over the past decade, entrepreneurship researchers have accumulated considerable work related to opportunities. Here we outline new possibilities opened up by that work and seek to recast entrepreneurship as a science of the artificial in three ways: understanding opportunities...
Chapter
Full-text available
This chapter outlines a general framework for studying the entrepreneur-ial method. Simply put, what the scientific method has afforded us in terms of understanding the actual world we live in, the entrepreneurial method enables us in terms of making new ones. At least one key ingredient of the entrepreneurial method for worldmaking consists in the...
Article
Full-text available
Austrian ideas about the firm have grown rather naturally out of the central body of Austrian thought with its focus on entrepreneurship, subjectivism and market processes. In this paper we critically evaluate some Austrian ideas on the firm, with particular attention to the concept of entrepreneurial judgment. We then describe recent empirical wor...
Article
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The generation of new markets is an emerging area of interest among researchers working in the traditions of evolutionary economics. And true to those traditions, the current study incorporates empirical evidence from psychology and cognitive science to develop micro-foundations for evolutionary theories of new market generation. In this paper we p...
Article
Who reenters entrepreneurship? And who ought to? An empirical study of success after failure The purpose of this article is to contribute to the movement in entrepreneurship research from explanations of performance based exclusively on traits or luck to those based on skills and learning. Both conventional wisdom and extant research in this regard...
Article
The research project described in this paper began as an inductive field study of entrepreneurship education in two very different settings—a university in war-torn Eastern Croatia and an entrepreneurship program in inner-city high schools in the United States. It evolved into a study of the two unlikely entrepreneurs who founded these education in...
Article
In this essay, we outline the provocative argument that in the realm of human affairs there exists an “entrepreneurial method” analogous to the scientific method spelled out by Francis Bacon and others with regard to the natural realm. We then suggest a series of open questions that we believe will help future scholars spell out the contents of suc...
Article
Full-text available
The purpose of this study is to contribute to the movement in entrepreneurship research from explanations of performance based exclusively on traits or luck to those based on skills and learning. Both conventional wisdom and extant research in this regard argue for the importance of persistence after failure and learning from failure. Our study of...
Article
Full-text available
This article provides a review and analysis of institutional entrepreneurship research with a focus on the emergence of this literature within two largely divergent streams: sociology-based institutional theory and economics-based institutional economics. The authors completed a review of 141 articles from these concurrent, but unlinked research st...
Article
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Suitable for MBA and executive learners, this case series presents an engaging narrative that prompts students to discuss entrepreneurial thinking. An entrepreneur who loves his native Swedish Lapland uses his natural gift for effectuation to ask What? What next? And What now? As his ventures evolve, students begin to ask themselves how they would...
Article
Full-text available
Suitable for MBA and executive learners, this case series presents an engaging narrative that prompts students to discuss entrepreneurial thinking. An entrepreneur who loves his native Swedish Lapland uses his natural gift for effectuation to ask What? What next? And What now? As his ventures evolve, students begin to ask themselves how they would...
Article
Full-text available
This note teaches students at all levels how to establish a board for a new venture, explaining why it is necessary, how to attract the right members, how to compensate them, how to distinguish advisors versus directors, how to deal with board conflicts.
Article
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This technical note explores the broadening role of entrepreneurship as both an economic and societal force. Students learn that as a distinct problem-solving method, entrepreneurship is teachable and applicable to a wide variety of issues central to human well-being and social improvement. It is akin to the scientific method in its capability to g...
Article
Students at all levels explore the psychology of entrepreneurship and new product branding and marketing as a young IBM executive decides whether to become an entrepreneur. He must evaluate his business plan; seek advisors; and decide how much money it will take to get started. His product idea? On-the-go water for dogs. With market research comple...
Article
Full-text available
Suitable for MBA and executive learners, this case series presents an engaging narrative that prompts students to discuss entrepreneurial thinking. An entrepreneur who loves his native Swedish Lapland uses his natural gift for effectuation to ask What? What next? And What now? As his ventures evolve, students begin to ask themselves how they would...
Article
Full-text available
Entrepreneurial performance is almost always confounded with firm performance. In this paper we argue for an instrumental view of the firm by formally showing that entrepreneurs can amplify their expected success rates by designing their careers as temporal portfolios that exploit contagion processes embedded in serial entrepreneurship. The advanta...
Chapter
Full-text available
There is an emerging belief amongst non-profit, environmental and business leaders that social entrepreneurship may present an alternative solution to many of the issues we face. Whether the problem is homelessness (Hibbert et al., 2002), funding for non-profit art organizations (Hughes and Luksetich, 2004), or environmental degradation (Cohen and...
Article
In support of theory, this study demonstrates that entrepreneurial experts frame decisions using an “effectual” logic (identify more potential markets, focus more on building the venture as a whole, pay less attention to predictive information, worry more about making do with resources on hand to invest only what they could afford to lose, and emph...
Article
This article outlines why highly confident entrepreneurs of focal ventures are better positioned to start and succeed with another venture; and therefore why overconfidence in one's capabilities functionally persists and pervades amongst entrepreneurs. By combining cognitive perspectives on confidence in decision making with Fredrickson's [Fredrick...
Article
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Ideal for a study of entrepreneurship as a phenomenon, this note explores the difference between causal models and effectuation. Whereas causal models focus on maximizing returns by selecting optimal strategies, effectuation begins with a determination of how much one is willing to lose and leveraging limited means in creative ways to generate new...
Article
Full-text available
How do people approach marketing in the face of uncertainty, when the product, the market, and the traditional details involved in market research are unknowable ex ante? The authors use protocol analysis to evaluate how 27 expert entrepreneurs approach such a problem compared with 37 managers with little entrepreneurial expertise (all 64 participa...
Article
How do people approach marketing in the face of uncertainty, when the product, the market, and the traditional details involved in market research are unknowable ex ante? The authors use protocol analysis to evaluate how 27 expert entrepreneurs approach such a problem compared with 37 managers with little entrepreneurial expertise (all 64 participa...
Article
Venture investing plays an important role in entrepreneurship not only because financial resources are important to new ventures, but also because early investors help shape the ventures' managerial and strategic destiny. In this study of 121 angel investors who had made 1038 new venture investments, we empirically investigate angel investors' diff...
Article
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In this paper, we review two seemingly unrelated debates. In business ethics, the argument is about values: are they universal or emergent? In entrepreneurship, it is about opportunities – are they discovered or constructed? In reality, these debates are similar as they both overlook contingency. We draw insight from pragmatism to define contingenc...
Article
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This note examines the pros and conss of two ways to build new ventures. The former is called causal or predictive, because it depends on accurate predictions and clear goals. The latter is effectual or nonpredictive, and it is extremely stakeholder-dependent and means-driven. It is very tempting to jump to the conclusion that the latter is the bet...
Article
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The case chronicles the development of Lumni, Inc., an international start-up offering innovative mechanisms for financing higher education. It focuses on: the details of decision making required to transform an idea into a viable business; building partnerships; the challenge associated with raising venture capital; and the challenges of creating...
Article
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This note reflects a new focus on "effectuation," the logic behind entrepreneurial expertise, which consists of tacit as well as learnable and teachable aspects of experience that are related to high performance in specific domains. Instead of taking either traits or circumstances as inputs and trying to explain variance in performance, the experti...
Article
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This technical note explores a framework by which entrepreneurs can evaluate their ideas before going forward based on who they are, what they know, and whom they know. Drawing on frameworks presented in textbooks, trade books, journal articles, periodicals, and on Web sites that claim to predict the feasibility and value of new venture ideas. Figu...
Article
Purpose The “innovator's dilemma” suggests that by listening to current customers leading firms often lose their markets to upstart newcomers as a result. The purpose of this paper is to understand how entrepreneurs successfully create such upstart firms and new markets, since this ought to have direct implications for theorizing about the innovato...
Article
In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relationships between effectuation, over-trust, and certain psychological characteristics of entrepreneurs. In this response we debate their article. Goel and Karri are correct in claiming that effectuation supposes over-trust. However, we argue that effectua...
Article
In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ] present a clutch of ideas for explaining the behavior of established firms within an environment of well-defined markets, stakeholder relationships, technologies, and so on. In this paper,...
Article
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Human artifacts lie on the interface between their inner environments and their outer environments. Organizations, therefore, are apt subjects to be studied through a science of the artificial. Furthermore, organizational design happens at two interfaces: first, at the interface between organizational founder(s) and the firms they design, and secon...
Article
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In an excellent recent paper on Ludwig Lachmann’s contributions to entrepreneurship, Chiles, Bluedorn and Gupta draw parallels between Lachmann’s work and later contributions in the entrepreneurship literature, including Sarasvathy (2001), suggesting that, ‘Sarasvathy’s economic approach to entrepreneurship is decidedly Lachmannian’ (Chiles et al....
Article
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What are the characteristics, habits, and behaviors of the species entrepreneur? Is there such a thing as "entrepreneurial thinking"? Is there a learnable and teachable "core" to entrepreneurship? This case examines the problem-solving process of 30 entrepreneurs from a variety of industries whose companies range in value from $200 million to $6.5...
Article
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The concept of effectuation is as subtle as it is profound. On the one hand, it challenges long held beliefs about the nature of cause and effect in social science. On the other hand, it generates a host of new insights about social phenomena. This concept is particularly well suited to analyzing entrepreneurial behavior - behaviors undertaken in s...
Article
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Research and development at the nanoscale requires a large degree of integration, from convergence of research disciplines in new fields of enquiry to new linkages between start-ups, regional actors and research facilities. Based on the analysis of two clusters in nanotechnologies (MESA+ (Twente) and other centres in The Netherlands and Minatec in...
Article
Two prescriptions dominate the topic of what firms should do next in uncertain situations: planning approaches and adaptive approaches. These differ primarily on the appropriate role of prediction in the decision process. Prediction is a central issue in strategy making owing to the presumption that what can be predicted can be controlled. In this...
Article
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We challenge the premise that the CEO's job is to keep the corporation alive and thriving at all costs and under all circumstances. We briefly review the differing normative views of strategic management theorists and organizational theorists about organizational inertia. We then develop an economic model of incumbent behavior in the face of challe...
Article
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Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this...
Article
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The authors thankfully acknowledge Tom Jones for his guiding suggestions and comments on an early revision of this manuscript, and Michael Frese for making us work just a little bit harder on the literature review.
Article
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Is new market creation a search and selectionprocess within the theoretical space of all possible markets? Or is it the outcome of a process of transformation of extant realities into new possibilities? In this article we consider new market creation as a process involving a new network of stakeholders. The network is initiated through an effectual...
Chapter
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For almost fifty years now, following the trail of issues raised by economists such as Hayek, Schumpeter, Kirzner and Arrow, researchers have studied the economics of technological change and the problem of allocation of resources for invention (invention being the production of information). The bulk of this literature simply assumes that new tech...
Article
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Current theories of the firm provide no explanation for entrepreneurial success except in terms of firm success. Even when the focus is on the entrepreneur, s/he is entirely cast as a bundle of traits/behaviors or heuristics/biases that serves to explain firm performance. In this article, I suggest putting the entrepreneur center stage, adopting an...

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