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International Journal of Entrepreneurship Volume 24, Issue 3, 2020
1 1939-4675-24-3-410
THE SHIFT FROM CAUSATION TO EFFECTUATION
FOR INTERNATIONAL ENTREPRENEURS:
ATTITUDES AND ATTITUDE CHANGE VERSUS
SOCIAL REPRESENTATIONS
Henrik G.S. Arvidsson, University of Tartu
Dafnis N. Coudounaris, University of Tartu
Ruslana Arvidsson, Institute of Innovative Governance in Estonia
ABSTRACT
This study aims to investigate attitudes and changes of attitude towards the decision-making
logic of effectuation and causation of international entrepreneurs through traditional linear
models of attitude change and non-linear through the framework of the theory of social
representations. The study seeks to explain how and why international entrepreneurs shift from
adopting causal logic to effectual logic when they gain more experience. This is a qualitative
study based on ten interviews, which were organised using a convenience sample of
international entrepreneurs who had studied business. Five of the entrepreneurs were women
and the other five men. The study reveals that a shift of decision-making logic occurs mainly
through high-effort processes after the entrepreneurial debut, and during the study period,
attitudes towards a specific decision-making logic were formed mainly through low-effort
processes. International entrepreneurs, during their education, and in their initial steps into the
world of entrepreneurship following their tertiary education, have adopted causal logic, but
later, due to their gained experiences, have more frequently implemented effectuation logic.
Keywords: Causation To Effectuation; International Entrepreneurship; Attitudes And Attitude
Change; Social Representations Theory; International Business.
INTRODUCTION
The theory of effectuation was proposed by the American researcher Sarasvathy in 2001. It
takes its vantage point in the idea that entrepreneurs do not, in general, act according to an ends-
driven pattern, but rather a means-driven one (Sarasvathy, 2001). Effectuation can, in many
ways, be seen as bipolar to the idea of causation, which is an end-driven logic, where the
entrepreneur or business leader sets out to formulate strategies and later initiates plans in order to
reach a pre-set goal (Sarasvathy, 2001, 2008). Her theory is based on the work of Knight (1921);
Weick (1979); Mintzberg et al. (1978, 1985); March & Simon (1958); March (1982, 1991).
The main idea behind effectual logic is the notion that managers do not always use strategic
planning. According to Sarasvathy (2001), the logic is instead the opposite in smaller
entrepreneurial businesses. Managers lack both the resources and knowledge to be able to adopt
a causal logic successfully; therefore, they apply what Sarasvathy (2001) calls effectuation. She
describes her approach as one of entrepreneurial knowledge or expertise, which is defined by its
interactive and dynamic processes, which in turn create new products and ventures. Effectuation
theory has so far been applied to entrepreneurial firms and high-tech companies (Matalamäki,
2017; Mthanti & Urban, 2014).
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Kotler is highly regarded as perhaps the primary proponent of causation. His classical STP
process (segmentation, targeting, positioning) comprises eleven steps (Kotler, 1991). According
to Sarasvathy (2001, 2008), causation has long been the predominant logic taught in education,
and Kotler's book “Marketing Management” has long been a cornerstone in university education,
and books similar to this one have been, and still are, used to teach students about business.
What Sarasvathy proposed was the opposite: instead of formulating strategies and initiating
programmes, we take as the vantage point what resources we have and what we can do with
them. A decision based on effectual logic starts with a) a given set of means, b) a set of effects or
operationalisations, which Sarasvathy (2001) called generalised aspirations, c) constraints and
opportunities for possible effects, and d) criteria for selecting between the possible effects,
something that Sarasvathy connected to the concept of affordable loss that the entrepreneur can
accept at any point. From the start, effectuation theory did not focus on international
entrepreneurship, but as the theory matured, research into effectuation in relation to international
entrepreneurship has become a stream within effectual research (Matalamäki, 2017).
International Entrepreneurship (IE) is a recognised field of research that has emerged from
the study of the international activity of newly formed firms (Yang, 2018). This phenomenon has
been the focus of researchers for decades as a result of globalisation and technological advances,
which have led to what we now call “the new economy”, which has resulted in the rapid growth
and expansion of new firms due to new technologies and a world economy where borders have
become less of an obstacle (Baier-Fuentes et al., 2018; Terjesen et al., 2016). International
entrepreneurship is a new field of studies (Zuchella et al., 2018) investigating the subject from
the different angles of social, cross-cultural, and comparative entrepreneurship.
An attitude is a person's conscious or unconscious, open, or hidden cognitive or emotional
position in relation to an object. Attitudes are not always stable over time and can change with
the moods of an individual (Schuldt et al., 2011). Attitudes can be measured by asking
respondents to state their attitudes or by inferring attitudes from spontaneous reactions to the
presentation of the attitude object (Ehret et al., 2015).
Attitudes differ from personality traits mainly because they are taught or occur through the
cumulative gathering of experiences, and therefore this makes them more prone to change than
our personality traits, which, most researchers agree, are inherited (Eagly & Chaiken, 1993).
There are two divergent views in social psychology: the traditional and linear, such as that
represented by Allport (1935), and the non-linear, represented by the theory of social
representations, as formulated by Moscovici (1961). Wagner (2017) states that “social
representations are overarching notions in two senses: First, they are conceptually located across
minds instead of within minds resembling a canopy across people's concerted talk and actions.
Second, they unite mental processes as well as behaviours and the social objects emerging
thereof.”
Moscovici challenged the then predominant view that attitudes, norms, and values are
formed in a linear function and later manifest a behaviour. The traditional social psychologist
views are represented by Allport (1935), who states that “an attitude is an evaluation of an
attitude object, ranging from extremely negative to extremely positive”. Most contemporary
perspectives on attitudes allow that people can also be conflicted or ambivalent towards an object
by simultaneously holding both positive and negative attitudes toward it. This has led to some
discussion on whether the individual can hold multiple attitudes toward the same object.
In a study by Matalamäki (2017), it is determined that there is no current research on how
attitudes change from one to another perspective, e.g. effectuation vs causation, so the research
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gap is to examine how attitudes change and which process is the most common explanation for
the changes that occur.
Furthermore, an attitude can be considered as a positive or negative evaluation of people,
objects, events, activities, and ideas. It could be concrete, abstract, or just about anything in one's
environment (Allport, 1935, 1954). Along with this, there is a debate about the precise definition
of this term. Eagly & Chaiken (1993), for example, defined an attitude as “a psychological
tendency that is expressed by evaluating a particular entity with some degree of favour or
disfavour” (Eagly & Chaiken, 1993). Although it is sometimes common to define an attitude as
affective toward an object (i.e., discrete emotions or overall arousal), it is generally understood
as an evaluative structure used to form an attitude object. Attitudes may influence the attention to
attitude objects, the use of categories for encoding information, and the interpretation, judgement
and recall of attitude-relevant information. These influences tend to be more powerful for strong
attitudes which are accessible and based on an elaborate supportive knowledge structure. The
durability and impactfulness of influence depend on the strength formed from the consistency of
heuristics. Attitudes can guide encoding information, attention, and behaviours, even if the
individual is pursuing unrelated goals (Breckler & Wiggins, 1992).
Traditional business programmes in management and marketing encourage causal decision-
making logic through subjects such as marketing management, international business, and
business strategy, with the emphasis on developing strategies, plans and programmes, with later
implementation and follow up. Our research question is why do successful entrepreneurs change
their logic from causal to effectual (Sarasvathy, 2001, 2008) despite the encouragement of causal
reasoning throughout the education system? Furthermore, how can the intrinsic values and
attitudes of students and future entrepreneurs, and in the case of this study, future international
entrepreneurs in a business programme, change (actively or passively) towards effectuation?
This research aims to seek answers to these questions through the lenses of traditional social
psychology (Eagly & Chaiken, 1993) and the theory of social representations (Bauer & Gaskell,
1999). Matalamäki (2017) states that it is important to develop new perspectives on effectuation
theory beyond traditional ones. This research fills that gap since it is focused not only on the
business aspects but also seeks to provide an explanation of how decision-making logics are
changed, and seeks to answer the question of how the educational system affects the preference
for a certain decision-making logic. In a recent study by Coudounaris and Arvidsson (2019), it
was revealed that among 78 studies on effectuation, the theory of effectuation had not moved
away from the realm of small entrepreneurial firms, and the development of effectuation theory
has accelerated in recent years, and more streams than the initial one can be identified,
(Matalamäki, 2017). However, most studies focus on small entrepreneurial firms rather than on
the application of the theory to larger non-entrepreneurial firms or international entrepreneurship.
According to these authors, the recent exponential growth of studies on effectuation (2017-2019)
has been encouraged by leading authors, who state that effectuation theory is a field with great
potential for further theoretical development. In addition, Coudounaris and Arvidsson (2019)
argue that effectuation theory would benefit from developing into the realm of psychology and
sociology.
The research question of this study examines whether new international entrepreneurs who
have passed through the system of higher education will state that their education trained them in
causal or effectual logic. Another objective is to examine whether there is a perceived shift from
one logic or the other. Can the change in logic predominantly be explained by low effort, high
effort, expectancy-value, dissonance processes, or by a more dynamic process such as the social
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representation model with the anchoring of new ideas and objectification? The contribution of
the study lies in the analysis, from an attitudinal perspective, of the mechanisms underlying the
question of why future entrepreneurs during their education and in their initial steps into the
world of entrepreneurship following their tertiary education, have adopted causal logic, but later
on, due to their gained experiences, have more frequently implemented effectuation logic.
In the following sections, we analyse the theoretical background, consisting of social
representations theory, effectuation versus causation logics, and attitudes and attitude changes
through both low and high effort processes. Furthermore, in the methodology section, the study
shows the composition of the semi-structured interview and its operationalisation. Following
this, there is a discussion of the findings. Finally, the conclusions, theoretical and managerial
implications, limitations, and suggestions for future research are discussed.
LITERATURE REVIEW
Theoretical Background
This section provides the theoretical background on effectuation versus causation, defines
the concept of international entrepreneurship (IE) and discusses both the linear and non-linear
ways of attitudes and attitude change.
Causation Versus Effectuation: Two Bipolar Decision-Making Logics
As previously stated, Sarasvathy (2001, 2008) launched her means-driven effectuation
theory, which can, in many ways, be regarded as the bipolar opposite of ends-driven causation.
She identifies three categories of means. Persons first must ask themselves who they know,
meaning what the size and structure of their network are; secondly, what do they know; and
thirdly, who they are. This defines the corridor in which persons can operate, since it entails their
knowledge, their social network, and their personality. At the firm level, other means can be
identified in the form of capital and other physical resources, as well as non-physical ones in the
form of human resources: the people working in the firm (Sarasvathy, 2001). Entrepreneurs, due
to their limited resources and high-risk environment, often use effectual logic.
Entrepreneurs often work under constraints in the form of resources, and therefore,
according to Sarasvathy, tend to opt for effectuation. Effectual logic is the predominant logic
among successful entrepreneurs, and effectuation has a positive correlation with innovation and
performance (Roach et al., 2016), Sarasvathy acknowledges that entrepreneurs sometimes shift
between causal and effectual logic. However, causal logic is still the one most often taught at
business schools around the world. Entrepreneurs using effectual logic also tend to network and
co-create with other actors in the effectual network to a higher degree than those applying causal
logic (Sarasvathy, 2008). Read and Sarasvathy (2005) state that as the firm grows and its
network and knowledge base grow, the adoption of causal logic becomes inevitable. Harms and
Schiele (2012); Politis et al. (2010) also support this notion: their research focused on student
entrepreneurs and which logic they viewed as more favourable, and the result was that student
entrepreneurs tend to have a more positive attitude towards effectuation (Politis et al., 2010).
Other researchers, including Chetty et al. (2015); Sitoh et al. (2014); Maine et al. (2015);
Dutta et al. (2015); Ciszewska–Mlinaric et al. (2016) conclude that there is a simultaneous
appliance of both decision-making logics, whilst Sarasvathy (2001); Nummela et al. (2014)
argue that there are periods in the firm's life cycle when one logic is more frequently applied.
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Smolka et al. (2018), who examined the correlation between effectual and causal logic and
venture performance, also concluded that firms benefit from applying both decision-making
logics. This study, however, sides with neither party, but instead deals with the question of which
logic the entrepreneurs subjectively perceive to favour and apply.
Even though effectuation is a relatively new and not yet mature field of study (Matalamäki,
2017), and causal logic has been the predominant way of viewing business in the system of
tertiary education, Sarasvathy (2001) has changed the way we look at entrepreneurship. Taking
everything into consideration, we have finally reached the question of how the attitudes of future
entrepreneurs can change towards a more effectual approach regarding decision-making.
International Entrepreneurship
International entrepreneurship (IE) is seen as the process of an entrepreneur conducting his
or her business activities beyond the borders of the firm's country of origin. It may consist of
exporting, licensing, opening a sales office in another country, subsidiaries, manufacturing or
joint ventures, and further development of the business. The research field can be traced back to
Penrose (1959); Cyert & March (1963). IE has been developed by several authors such as
McDougall (1989); McDougall & Oviatt (2000); Oviatt & McDougall (2005); Coviello et al.
(2011); Zuchella et al. (2018). Since the days of the early researchers, the world has changed,
and borders have become less and less critical. Today, firms have become increasingly
borderless, and the term "Born Global" can be used to describe the current state of affairs, where
a firm can instantaneously establish itself in many locations outside the realm of its own home
country (Knight & Liesch, 2016).
The advent of the field of international entrepreneurship was marked by McDougall's
(1989) comparison of domestic versus international new firms and by her explicitly naming and
also providing an early precise definition of the term international entrepreneurship (Coviello,
McDougall & Oviatt, 2011).
McDougall (1989) stated that there were three main differences between international
entrepreneurial firms and traditional domestic entrepreneurial firms, the first being related to
marketing strategy: “The variable that contributed the most to the discriminant function was the
distribution and marketing strategy. This is a rather comprehensive strategy, with the
international new venture pursuing a strategy of broad market coverage through developing and
controlling numerous distribution channels, serving numerous customers in diverse market
segments, and developing high market or product visibility. Thus, the emphasis is on high
market awareness, market channel control, and overall market penetration”.
The second marker was the competitive environment: “The intensity of international
competition was the second most important variable distinguishing international and domestic
new ventures. Whereas both groups characterised domestic competition as being relatively
intense, the international new ventures compete in industries with higher levels of the
international competition” (McDougall, 1989).
The third most discriminating variable was the grand entry strategy. "This strategy,
emphasised by international new ventures, builds on outside financial and production resources
to enter numerous geographical markets on a large scale. Securing patent technology is also an
important component of this strategy. Research has indicated that patent technology is important
to the success of new ventures” (McDougall, 1989).
The research field has grown in later years, and newer research has focused on issues such
as linking the research area of international entrepreneurship with marketing, branding,
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knowledge management, organisational learning, and finance and venture capital (Coviello et al.,
2011). Attitudes towards a decision-making logic will also determine the internationalisation
process of the firm and other aspects such as growth and innovation, and in the long term, it will
be a predictor of the success of a firm.
Attitudes and Attitude Change: An Introduction.
Attitudes are necessary for human beings as they assist us in navigating through a complex
world. An attitude consists of three fundamentals. First is the content, which, in turn, consists of
three parts (Allport, 1935, 1954): cognitions (what we believe), affects (our feelings) and
behaviour (what we do). Second is the structure. According to the unidimensional view, human
beings either tend to feel positively or negatively about an attitude object such as a person, an
object, artefact, or event. This bi-dimensional view states that attitudes reflect varying amounts
of favourability or unfavourability toward an object. The third fundamental is a function, such as
the ability to make it easier to navigate through a complex environment or to avoid danger
(Allport, 1954).
Attitudes have been considered to be a central concept of contemporary social psychology.
Scientists such as Thomas and Znaniecki (1918) have defined social psychology as the scientific
study of attitudes. In 1954, Allport (1935) further noted: “This concept is probably the most
distinctive and indispensable concept in contemporary American social psychology”. The initial
definitions were broad and encompassed cognitive, affective, motivational, and behavioural
components. For example, Allport (1935) defined the concept of attitudes as “a mental and
neural state of readiness, organised through experience, exerting a directive and dynamic impact
on the individual's response to all objects and situations with which it is related” (Allport, 1935).
A decade later, Krech and Crutchfield (1948) stated that “an attitude can be defined as an
enduring organisation of motivational, emotional, perceptual, and cognitive processes with
respect to some aspect of the individual's world”.
Today, there are many theories on how attitudes can be changed, and the primary users of
attitude changing measures are businesses and governments. There are both emotional and
cognitive ways in which our attitudes can be changed (Smith & Petty, 1996). Moscovici (1961)
challenged the perception that attitudes are formed and changed in a linear way when he
introduced his theory of social representations. There, he argues that attitudes are changed
through the constant interaction of people, and they are continuous and ongoing.
Attitudes change through both low and high effort processes. Numerous models describe
the processes leading to attitude change: one of them was presented by Petty, Cacioppo, and
Goldman (1981). In their model, dubbed the “Elaboration likelihood model”, they identified two
systems in which we process information - one the central and one the peripheral route. The
persuasion attempt can take the central route if the receiver of the message is highly motivated
and can think about the message. The process then occurs at a deeper level, focused on the
quality of the message and its arguments. The outcome will be a change in attitude that lasts
longer and is more resilient to counterattacks or conflicting information (Petty et al., 1981). The
peripheral route is taken if the subject has low motivation or low ability to think about the
message, and the processing is superficial and focused on superficial features such as the
attractiveness (or status, competence, etc.) of the sender. The persuasion outcome has a lower
probability of profound and lasting attitude change (Petty, Cacioppo, & Goldman, 1981).
Research into attitude change, however, was more intense before and during the 1970s, but has
steadily declined in the last 40 years (Albarracin & Shavitt, 2018). Regarding entrepreneurship,
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the research is not extensive, even if there are examples mostly to do with different aspects, such
as motivation to engage in a business of your own (Ayalew & Zeleke, 2018).
Sarasvathy, Dew, Read and Wiltbank (2008) seem to conclude that attitudes are something
static and not prone to change, which goes against the core concept of social psychology.
However, leaving Sarasvathy and her non-evolutionary model of attitudes behind us, we now
examine the main processes in which attitudes can change.
Low-Effort Processes
Attitudes change through low effort processes when the object, for example, a decision-
making logic or an artist, is not relevant to the individual. For example, if an individual has little
interest in music, he or she will not waste much cognitive effort on reflecting about an artist; to
an extent his or her opinion will be influenced by factors such as the opinion of others. This is in
contrast to an attitude that regards something as important, when the individual would engage in
a higher level of cognitive effort (high effort process). Attitudes have both a cognitive and an
affective component. Attitudes can also be, to a varying degree, unrelated to the object at hand,
but they can still have an impact on how we regard the object. One theory about attitude change
was presented by Zajonc (1968): the Theory of Mere Exposure states that we tend to develop a
liking for objects that we are frequently exposed to. Moreland & Beach (1992) conducted an
experiment where four female 'students' were sent to a class to study the effect of mere exposure.
To replicate the conditions needed to study mere exposure, they did not interact with any of their
fellow students. At the end of the semester, the students were shown slides of the women and
completed measures of each woman's perceived familiarity, attractiveness, and similarity, and
the result was that the more frequently they were exposed to the 'student', the more they liked
her. This means that we tend to develop a liking for attitudinal objects that we are often subjected
to.
Operant conditioning is a method of learning that occurs through rewards and punishments
for behaviour. Through operant conditioning, an individual makes an association between a
behaviour and the consequence that later follows (Skinner, 1938).
High-Effort Processes
High-effort processes occur when the attitude object is of importance to the individual;
therefore, his or her attitudes change using high cognitive effort. Some of the most important
aspects to consider are the person's actual thoughts (cognitive responses) toward the attitude
object and any persuasive message that is received on the topic. Although there are many aspects
to take into consideration, three components of thought have proven especially important in
producing change (Eagly & Chaiken, 1993). The first is whether the thoughts about the attitude
object, such as a decision-making logic, are positive or negative.
If there is a greater amount of positive thoughts, the attitude is likely to change towards the
positive, and the opposite if there is a higher degree of negative thoughts. The second dimension
concerns the level or amount of cognitive effort. The third and final aspect of thought is related
to the issue of confidence. When thinking about an attitude object or persuasive message, people
will have varying confidence in each of their discrete thoughts.
According to the theory of reasoned action (Fishbein, 1967), attitudes are created through
an individual's assessment of how likely it is that a given attitude object will be associated with
positive (or negative) consequences. The more likely it is that an attitude object is associated
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with a positive consequence, the more positive the attitude tends to be (Petty et al., 2003;
Fishbein & Ajzen, 1969; Fishbein, 1967).
According to this perspective, it is thought that when people engage in this process of
effortful consideration of an object or a message, they may change their attitude.
According to cognitive dissonance theory (Festinger, 1957), people are often motivated to
hold consistent attitudes towards objects (Petty et al., 2003). Because of this motivation for
consistency, people tend to experience unpleasant physiological symptoms when they engage in
a behaviour that is counter to their beliefs, or are made aware that they possess two or more
conflicting attitudes. This experience then motivates them to change their attitudes so that
unpleasant feelings can be eliminated. When people engage in the process of making a choice,
dissonance processes will often produce attitude change.
Theory of Social Representations
Previously we described the linear processes behind attitude change; now we will focus on
non-linear processes in the form of the theory of social representations.
Social representations are a collection of ideas, values, beliefs, metaphors, and practices that
are shared between the members of groups and communities. The term social representation was
originally coined by Moscovici (1961) in his study on the reception and circulation of
psychoanalysis in France. It is understood as the collective elaboration of a social object by the
community to behave and communicate. It is further referred to as a “system of values, ideas and
practices with a twofold function” (Moscovici, 1961; Bauer & Gaskell, 1999). The first function
is to establish an order that will enable individuals to orient themselves in the material and social
world that surrounds them, and to master it. The second function is to enable communication
among the members of a group or community by providing them with a code for social exchange
and a code for naming and classifying the various aspects of their world and their personal and
group history.
In his initial study, Moscovici (1961) sought to investigate how scientific theories circulate
within common sense, and what happens to these theories when they are elaborated upon by a
broader lay public or audience. For such an analysis, Moscovici postulated two states or
universes: first, the reified universe of science, which operates according to scientific rules and
procedures, and gives rise to scientific knowledge; and, second, the consensual universe of social
representation, in which the lay public elaborates and circulates forms of knowledge which come
to constitute the content of common sense (Rooney et al, 2013; Alison et al., 2009).
The terms consensual and reified discourse describes the state of discourse in which objects
gain their meaning through the processes of reification (e.g. ritual). This means they are given a
meaning that is agreed upon by members of the group. The same goes for what is regarded as
correct and accepted within a group. When the discourse is communal, different opinions can be
voiced, and there is a lively discourse within society. Later, a subject may be taken up by an
institution that has significant influence within the area of discourse, an example of which may
be the United Nations and its climate panel regarding global warming. The process that then
occurs is that the discourse becomes institutionalised (Wagner et al., 2008; Wagner & Hayes,
2005) and an institution is born (North, 1991; Moscovici, 1961). This will eventually lead to a
reified discourse, where those holding a divergent opinion find it hard to voice it without fear of
belittlement and other social sanctions.
A social object is something material or immaterial such as an idea or concept that people
gather around. In this respect, Kotler's book “Marketing Management” (Kotler, 1991) can be said
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to be a social object. The educational system is structured in a way that transfers not only
information but also a system of social representations (Chaib et al., 2010).
Social representation has a varying degree of stability: some concepts are stable, such as the
idea about the presence of a God, whilst others are not, such as scientific ideas like effectuation.
According to Moscovici (1961); Laszlo (1997); Jovchelovitch (2007), there are two ways of
integrating something new: anchoring and objectification. Anchoring is when you ascribe
meaning to something new, such as objects, relations, ideas, and practices.
The process involves the referencing of pre-existing knowledge as a mould for the novel,
and the categorisation of the novel in terms of the old, and unintentionally transferring attributes
of the old to the new. After the anchoring process has taken place, the objectification process
starts. It is a process that Moscovici (1961, 1973) describes as the turning of the abstract into
something tangible and concrete, something that becomes reified and changes our behavioural
patterns. It occurs through the discourse and interaction between group members and makes the
abstract into something tangible. After this process is completed, there is an acceptance of the
new, and the attitude towards it has changed from negative and suspicious to one of acceptance.
Attitude Change From Causal Towards Effectual Decision-Making Logic
First, one must ask the question of whether the choice of which decision-making logic to
apply is a conscious process or something that occurs without knowing it. If we assume that
there is a conscious process behind this, we can study how attitudes change through both the
linear and non-linear perspective. If a person is exposed to one logic during their tertiary
education, that logic becomes institutionalised (North, 1991) or reified (Moscovici, 1961). In our
interviews, we set out to see which perspective best describes the attitudes formed during the
educational period and how they later changed as the entrepreneur gained experience.
RESEARCH METHODOLOGY
In this study, we attempt to measure the retrospective attitudes of former business students,
turned entrepreneurs, as well as their current attitudes towards both causation and effectuation.
We also ask questions in our semi-structured interview with ten entrepreneurs about how their
attitudes had changed. The questions associate with the way attitudes change through low-effort
processes, high-effort processes - cognitive responses, high-effort processes - expectancy-value
processes, high-effort processes - dissonance processes, and social representation processes.
Furthermore, we conducted interviews with ten international business leaders/entrepreneurs
who had previously studied business at universities in Estonia, Sweden, Denmark, the USA, and
Ukraine. These interviews, which were based on a semi-structured questionnaire (Table 1
below), were also analysed and interpreted in section results to answer the research question.
The focus of this research is to examine the relationship between former business students,
the logic they acquired through their education, and how their attitudes changed when they left
the educational system and started their entrepreneurial career. Sarasvathy (2001, 2008) states
that most entrepreneurs prefer effectual logic, and our focus is on which logic students perceive
being taught at university, and which logic they later prefer when they have had a minimum of 2
years of entrepreneurial experience. Therefore, our study group sample consists of entrepreneurs
who studied business at university level and have a minimum of two years' experience as
entrepreneurs.
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This is a qualitative study, with the main aim of examining how the attitudes of future
entrepreneurs will change. Within this study, we performed in-depth analyses of low-effort
processes, high-effort processes, expectancy-value processes, dissonance processes and social
representation-driven processes in order to determine how these initiate a change in attitude
towards an object such as effectuation or causation.
For this qualitative study, a sample of 10 respondents was chosen, and all had higher
education in business studies. Half of the respondents had 2-5 years of entrepreneurial
experience, and the rest over five years' experience. The sample is gender-balanced, as half of the
respondents are male, and the other half female. The age of the respondents ranges from 25 to 59
years. The interviewees have a varied country-of-origin profile: specifically, two respondents are
from Estonia, three from Sweden, two from Denmark, two from the USA, and one from Ukraine.
Table 1 below shows the semi-structured questionnaire used in the ten interviews. We used
a set of fixed questions on whether the participants favoured causation or effectuation during
their university years, and how they perceived their education as persuading them to adopt either
causal or effectual logic.
Additionally, we asked the interviewees how they viewed effectuation and causation as
entrepreneurs with 2-5 years' experience or five or more years' experience. We also asked them
whether there was a change in their favoured logic and how it happened, and which of the
processes mentioned the entrepreneurs considered to be behind the change in logic. We also
analysed whether there was any difference between entrepreneurs with 2-5 years of experience
and those with five or more years of experience.
The study deals with ten entrepreneurs only, as it was difficult to contact a larger number of
always busy entrepreneurs in the time frame available. The study is a preliminary one, limited in
scope but serving as the basis for a more extensive study, perhaps even later a longitudinal one.
Furthermore, the study was based on entrepreneurs based in Tallinn, because Estonia is the
home country of the authors, and Tallinn is the tech – hub of the country. Very little business
activity takes place in other areas of the country, which has only 1.5 million inhabitants. The data
was collected during the winter of 2019/2020. This study is also a preliminary study, which will
lay the foundations for a larger-scale study in the future. The study is a cross-sectional one since
a longitudinal study was not feasible given the limited timeframe, but it lays the foundations for
a more extensive, larger scale study in the future.
Table 1
SEMI-STRUCTURED QUESTIONNAIRE USED IN THE INTERVIEWS WITH
THE ENTREPRENEURS AND OPERATIONALISATION OF THE STUDY
Interviews
Before the interview, the participants were given an explanation regarding the definitions of effectuation
and causation. The definitions were given in accordance with Sarasvathy (2001).
Questions:
1: How would you rate your education: as leaning towards indoctrination in effectuation or causation, and
what was the logic you preferred right after graduation?
2: How many years of experience do you have as an entrepreneur? (Sarasvathy, 2001).
3: Do you believe your preference regarding decision-making logic has changed after graduation from
university and you starting your business? (Sarasvathy, 2001).
4: Do you prefer a decision-making logic that you have been extensively exposed to compared to one that
you have been less exposed to? (After graduating from university and at the present time) (Zajonc, 1968).
5: Has your decision-making logic been stable over a longer period of time? (Petty, Wheeler & Tormala,
2003).
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6: Would you say your change in decision-making preference (if changed) was the result of an extensive
cognitive process? (e.g. did you think a lot about it? (Fishbein, 1967)).
7: Do you feel that the main reason for changing preference regarding decision-making logic (if changed)
was a mental discomfort stemming from negative outcomes produced by the results of the previously
applied logic? (Festinger, 1957).
8: Did you reflect a lot about the positive or negative consequences of adopting one or the other decision-
making logic? If yes, did you act according to the outcome of your thought process? (Fishbein, 1967).
9: Would you agree that your change in logic (if changed) is the result of a group process, where the input
of others influenced how you viewed and applied logic, or a choice you made on your own? (Moscovici,
1961).
10: Is association with a positive or negative outcome something that influenced your choice of decision-
making logic? (Skinner, 1938).
11: How important is the opinion or input of others on your choice of decision-making logic? (Moscovici,
1961).
12: Do you feel reluctance towards adopting a new decision-making logic? (Petty, Cacioppo, & Goldman,
1981).
13: Describe in your own words: 1) If you prefer an effectual or causal logic (Sarasvathy, 2001); 2) If the
logic has changed, what brought about that change, and was it a process to which you devoted a lot of
thought? (Fishbein, 1967); 3) Is there a difference between the amount of thought you had regarding
decision-making prior to, during, and after graduating from university; if yes, rank the amount of thought
put into each stage on a 0-7 scale, where 0 is no thought , 4 a fair amount of thought, and 7 extensive
thinking (Fishbein, 1967; Moreland & Beach, 1992); 4) Is there a difference between preferred logic and
applied logic? If yes, please describe what it is (Festinger, 1957); 5) What was more important as a factor
for changing your attitude towards a certain decision-making logic: the initial information or your inner
thought process? (Allport, 1935; Fishbein, 1967).
14: Are decision-making logics and decision-making in general something you have often discussed with
others? (Moscovici, 1961).
15: Do you apply effectual or causal logic, or a combination of the two? (Sarasvathy, 2001).
Note: The following definitions of causation and effectuation were given to the
respondents so they could become familiar with these concepts:
Causation: “Causation processes take a certain affect as given and focus on selecting the
means to create that effect” (Sarasvathy, 2001).
Effectuation: “Effectuation processes take a set of means as given and focus on selecting
a set of effects that can be created with that set of means” (Sarasvathy, 2001).
Clarifications: If the respondents had problems in understanding, a further explanation
was offered such as describing the model of Kotler or Sarasvathy’s thought experiment “Curry in
a hurry”.
RESULTS
Decision-making models and how human beings change their logic pose important
questions that need to be answered at both an individual and collective level. On the individual
level, traditional theories of social psychology that deal with attitudes and beliefs answer how an
individual shifts from one logic to another, and sometimes re-shifts. There is a one-way flow
between the group and the individual, and there is little or no room for co-creation. If one looks
at the collective level through the theory of social representations, we see that there is a constant
discourse, negotiation, and re-negotiation between group members regarding what is right and
what is acceptable. This, however, does not mean that there is no overlap between the two. The
main difference is that the traditional social psychology explanations are linear, such as those
described by Alport (1935), whilst the theory of social representation (Moscovici, 1961) focuses
on group processes that in turn form the beliefs and attitudes of the individual. Traditional
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theories about attitude stem from the notion that attitudes either change because of events in the
environment of the individual, or persuasion from an external source. Social representation
theory, however, states that a change or creation of a new object such as effectuation is
something commonly created within the group.
According to traditional social psychology, we change our attitudes both in an active way,
as portrayed in the theory of reasoned action, and in more passive ways, such as mere exposure,
as described by Zajonc (1968), and in operant conditioning (Skinner, 1938). They lead to the
same result, but the difference is that passive means of attitude change in general lead to a lower
degree of reticence over time. However, these theories do not consider the co-creation of social
objects and the consequences of breaking the norms. These are factors that are best explained by
the theory of social representations. As we mentioned before, the individual can have a belief
that is contradictory to the beliefs of the group, and when a belief or attitude has become
institutionalised and reified, it is difficult for the individual to contradict the group without
consequences, which can be social or more material in nature, such as the loss of credit
possibilities.
This means that an aspiring entrepreneur already from the beginning is forced to adopt
causal reasoning since he/she is forced to go through the process of creating a business plan.
This, together with the institutionalised learning process, where the student is moulded into
adopting a causal form of reasoning, can in some groups lead to a more difficult transition from
the widely accepted form to a different one.
Effectual logic is by no means a new logic, and it was not invented by Sarasvathy (2001),
but merely described. We tend to argue that effectual logic has existed since the advent of man.
However, causal logic has been institutionalised, at least in the realm of business, to the extent
that stakeholders, both internal and external, often demand manifestations of causal reasoning
such as SWOT analysis and business plans from aspiring entrepreneurs. Perhaps it is also the
case that the more an entrepreneur has proven him or herself in terms of success, the more
freedom the person enjoys. However, for the new entrepreneur, there are many hurdles to
adopting an effectual logic. The way the shift occurs is in other means a product of the shift in
beliefs and attitudes at an individual level, but it also depends on the group to which the
individual belongs.
The question is also why most student entrepreneurs favoured effectuation as a decision-
making logic, even if traditional education teaches causation. Perhaps it has to do with the fact
that student entrepreneurs and non-serial entrepreneurs often operate with constraints in the form
of budget, network and knowledge to a higher degree than entrepreneurs in general, although
Sarasvathy (2001, 2008) also supports this conclusion. Even so, the remaining entrepreneurs who
favour causation often have a cognitive journey ahead of them in the form of a change of beliefs
and attitudes, constrained by group or stakeholder expectations. As the entrepreneur gains
positive experience and exposure to effectuation, the concept becomes more appealing, and as
the concept is anchored and objectified, acceptance towards it grows.
Our interviews show that 8 out of 10 entrepreneurs with university education stated that
their education taught them to adopt a causal decision-making logic, two were unsure, and none
stated that effectuation was taught in their respective university education programmes, or that
they favoured effectuation after graduation. This leads us to the conclusion that effectuation is
something that entrepreneurs learn to adopt after their university education.
In addition, the interviews reveal that 7 out of 10 entrepreneurs also stated that they
favoured the decision-making logic that they were exposed to immediately after their education,
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meaning that the education system tends to change attitudes towards causation through mere
exposure. It is worth noting that 8 out of 10 entrepreneurs stated that their attitude changed after
they became entrepreneurs, and 8 out of 10 said that after becoming entrepreneurs, they favoured
effectual logic. According to some previous studies, large, non-entrepreneurial firms are more
causal than smaller ones (Sarasvahy, 2001), whilst others such as Reymen et al. (2015), and
perhaps most notably Arend et al. (2015), hold a divergent view. Thus, according to the views of
Sarasvathy (2001), if the studied firms were large, this could explain why the entrepreneurs
might prefer causation, and vice versa, i.e. if the studied firms were small, then this could explain
why entrepreneurs might prefer effectuation.
When one looks at the group that has more than five years’ experience of entrepreneurship
(5 persons out of 10), the result is overwhelmingly in favour of effectuation, since 5 out of 5
entrepreneurs (with entrepreneurial experience longer than five years) said they prefer
effectuation, which is in contrast to the group with less than five years’ experience, where 3 out
of 5 preferred effectuation.
Regarding the question of whether the subjects put an amount of cognitive effort into the
process of changing their decision-making logic, most subjects replied that they did, but not
extensively, and 70 % of those who changed their decision-making logic said they did so because
they experienced mental discomfort stemming from adopting the previously used logic
(Festinger, 1957; Martinie et al., 2017). The same also applies when it comes to the issue of
whether they reflected a lot on the positive or negative consequences of adopting one or the other
logics, implying that there is a strong correlation with the fundamental principles of the theory of
reasoned action. When it comes to the question of input from others as a factor that determines
the decision-making logic preferred or applied, only two subjects replied that it played a notable
role. The same subjects answered that decision-making logic and decision-making in general
were something they discussed with others, while 6 out of 10 subjects replied that this was not an
issue that they discussed extensively with others, and 2 out of 10 replied that input from others
played some role. Five out of 10 entrepreneurs also answered “no” to the question regarding
whether the change of decision-making logic was the result of a group process of some sort, and
only two answered that this was so, one - to some extent, and two stated the question was - non-
applicable as they had not changed their decision-making logic. 4 out of 10 also felt a reluctance
when it came to changing decision-making logic, suggesting that there is often resistance to
change. Furthermore, there was no difference between those with under five years of
entrepreneurial experience and those with experience exceeding five years. In the open-ended
question, where the respondents were asked to describe the process leading to attitude change
and the change of decision-making logic, they described in varying words a process where they
increasingly felt that the logic they previously used did not produce the expected returns, or, in
other words, the positive outcomes were not as expected. One entrepreneur stated:
“What I learned at university later, when I opened my first business, turned out not to be
true in reality (laughing)... in a small business, one cannot make extensive plans, implement, and
follow up; there is no free money or endless resources. Therefore, I concluded that I needed to
act based on what I had, instead of following what I learned in school. I decided to do what I
could, with what I had. It was a painful awakening, and it took time to break free. If I had not,
the consequence would have been bankruptcy at some point, of that I am sure (laughing).
Outcomes and consequences were topics that circled my mind for a long period. It took me a
long period before I even heard of other ways of doing things than the ways we learned in
school. I think that the university is an authority, and also when you work together with your
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fellow students, you tend not to question: group work, for example, instead tends to reinforce
what the school is teaching, since no one questions authority in any meaningful way, and group
work means that your own beliefs are reinforced by others. As an entrepreneur, you do not often
discuss the same topics as you do at university with others since the process of learning is
constructed and controlled by others, which means that later in life you do not get the same
opportunity to exchange ideas”.
The entrepreneur described a process where he at first did not know about any other logics,
and that the logic taught at university was later reinforced in interaction with fellow students.
Here, we see clear elements from social representation (Moscovici, 1961): anchoring and
objectification, something that, according to the entrepreneur, was harder to achieve later in life,
and that points to the fact that social representation is more applicable in a group setting than in
an entrepreneurial setting, where those issues are perhaps not raised.
One of the two entrepreneurs who changed his logic stated:
“As for the definition you provided to me, causation is most definitely the logic I learned in
school. I think it stuck with me for some time; I think, in fact, it made it difficult for me since I
was too rigid for my own good. Later, when I saw the need to change, I did not know it then, but
what I did was that I changed to what I later got to know as effectuation. The process was not
easy, and it caused me a lot of stress”.
The other entrepreneur, who was one of the 20% who always preferred causation, stated:
“For me, there was no need to change my decision-making logic. I can understand that in
some businesses, there is a great deal of uncertainty, but for me, that was never the case. I think,
however, you can find elements of effectuation in my reasoning because as an entrepreneur, you
always need to handle uncertainty. However, I need a framework: to skip formulating goals and
implementing programmes would not work for me. Perhaps decision-making logics are
determined both by situational factors, but also by the personality of the entrepreneur”.
An interesting fact to note is also that the entrepreneurs who continued to apply causation
both stated that causation and causal logic was something they learned at university, mainly
through low-effort processes such as heuristics, and also in dynamic interactions according to
social representations. This shows that the cultural and institutional aspects described by
Laskovaia & Shirokova (2017); North (1991) are at play. The second entrepreneur, who
continued to apply causation, stated:
“For me, I never thought about any logics or rather changing mine. I simply did what I
learned in school; in hindsight, maybe I should have been more open because I think the
reluctance or fear of change led to many hardships. I think our educational system should be
more open and embrace more and different ideas. I felt like causation was the only way to go
about it, and I would say I had my education to thank for that (laughing). When I look at things
now, I think I felt mental discomfort or stress because I felt that my way of going about things
was wrong, but I did not dare to challenge what I was taught. I sometimes wish I would have
because it would have spared me a lot of pain. I thought about the consequences, most of all
related to mine, because I quickly realised that things were not as easy as Kotler said they were
(laughing). Sadly, I did not know of any other way back when I started my career; now, I think it
is too late. I got used to my way of doing things. With that said, I think there are also times
where I used effectual thinking, especially when I could not muster the resources to go ahead
with a more traditional way of doing things”.
This underlines the principle of cognitive dissonance that people often have resistance to
new ideas (Martinie et al., 2017). The entrepreneur suffered hardships and increasingly
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understood that his way of doing things was not optimal. There was a discrepancy or conflict
between his values that favoured causation; but still, he felt resistance when it came to changing
his attitudes.
In general, our results point to the fact that social representation theory cannot explain why
people turn from adopting one decision-making model to another. However, the person
interviewed kept on with causal reasoning, since he did not know about effectuation or other
ways of doing things. If effectual reasoning had been the subject of anchoring and
objectification, perhaps the leap would not have been so great. The question is also whether
people are aware of the processes described in the theory of social representation, as we are
seldom aware of these kinds of processes that do not draw our immediate attention, which in our
view means that social representations theory cannot be ruled out.
Our study further shows that entrepreneurs are, to a large extent, aware of factors within
themselves and their environments, such as the positive and negative consequences of adopting
one or the other decision-making model.
The results from the interviews also underline that decision-making is something that the
entrepreneurs did not think about in the stages before and during education, as within those
stages, they put little thought into these issues. After becoming entrepreneurs, the score was
higher: on a 0 to 7 scale, where 0 is none, 4 is a fair amount, and 7 is extensive, the average score
was 5 after they became entrepreneurs. This can be compared to 0 before entering university, and
1 during their studies. This makes a case for high-effort processes after becoming an
entrepreneur and low-effort before the entrepreneurial debut as an explanation for the formation
and change of attitudes regarding decision-making logic.
Our study also showed that 60% of entrepreneurs applied both causal and effectual logic
and that there was a high correlation between preferred logic and applied logic - 90%. 50% of
the entrepreneurs also stated that their decision-making logic had been fairly stable over time,
perhaps a sign that they use a combination of logic, applied in different periods of the firm's life,
something that also became clear during our interviews.
Regarding the age of the entrepreneurs, the sample was too small to draw a definite
conclusion. However, from what we could read out of the correlation between age and
experience, there is a broader tendency for older entrepreneurs to prefer effectual logic, because
of a larger exposure to entrepreneurship, something that is also reflected in the answers given by
the interviewee: this has also been confirmed in a study by Harms & Schiele (2012).
Those entrepreneurs with a broader experience of entrepreneurship have, to a larger extent,
reflected upon the consequences of their decision-making logic than those with less experience.
Also, those of younger age are probably more prone to experience a lingering effect of their
inculcation into one logic, which is still active, than those who have spent a long time outside of
the university and are operating outside in an entrepreneurial context. The effects of this
inculcation, stemming from university, have, in other words, grown weaker, and the effects of
high effort processes have increased in strength due to the cognitive processes within the
entrepreneur him or herself. Also, with gender, the sample was too small to draw any conclusion,
and gender difference was not a primary goal of investigation. However, it is well established in
research that women tend to take fewer risks than men (Waldron, McCloskey & Earle, 2005),
and have slightly different personality traits described in the big five personality trait model,
such as agreeableness, extraversion and neuroticism. In this study, gender differences were not
substantial (Weisberg et al., 2011).
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One difference that can be noted is in the answers, where men tend to be more direct, whilst
women appear to have a more uncertain tone, as exemplified in the answer of the female
respondent, aged 28 from Ukraine (Q1), who stated “Well, given your definitions and given the
size of my business, I would say I am leaning towards effectuation now. However, back then, I
was taught causation”.
Gender differences can be identified, but not to the level where one can say they are
significant enough to make conclusions on the process of the change of attitudes in an
entrepreneurial context. What can be said, however, is that women, because of their slight
variance in personality traits such as openness and extraversion, should theoretically be more
open to changing their attitude as well as being more influenced by other individuals and group
dynamics than men, who score lower than women on the same traits. Another aspect is the
cultural context from which the entrepreneur originates and the personality traits of the
entrepreneur - a case made by Laskovaia & Shirokova (2017); Dilli & Westerhuis (2018). The
school system and what is taught to the students is a result of the culture and the institutions of
society, something that, in turn, partly shapes personality traits (Hofstede & McCrae, 2016).
There is a relationship between culture, institutions, the educational system, identity, personality
and the decision-making logic applied and preferred (Alsos et al., 2016). According to the
research by Laskovaia & Shirokova (2017); Hofstede & McCrae (2017), the results may have
differed if we had conducted a country-specific study or engaged in a study with a much broader
sample, also involving countries more different in culture than the ones found in the sample of
this study. There is a debate regarding whether the adoption of effectuation vs causation is stable,
depends on circumstances or where in the lifecycle the firm is. Our study showed that there is a
tendency that the preferred and applied logic moves from causal to effectual as the entrepreneur
gains experience, but we cannot rule out the possibility that effectuation is applied to a different
extent during certain events in the firm's life, or if applied according to a situation. However,
according to Velu and Jakob (2016), managers with entrepreneurial traits strengthen the
innovation ability of the firm. Therefore, people with entrepreneurial traits who use effectuation
might be overrepresented since entrepreneurial skills have a positive effect on the firm's survival
during the first part of its life.
CONCLUSIONS, MANAGERIAL IMPLICATIONS, LIMITATIONS, FUTURE
RESEARCH AND PROPOSITIONS DEVELOPMENT
Conclusions
Our study shows that entrepreneurs, to a high degree (8 out of 10 entrepreneurs), perceive
that causation is the predominant decision-making logic taught in business programmes at
universities. The vast majority of those entrepreneurs after graduation favour causation, but
during their experience as entrepreneurs they shift towards effectuation, and that, according to
our study, is a gradual process, where there is a significant difference between those with shorter
and those with longer experience in entrepreneurship. Our study further shows that the process is
mostly associated with what is characteristic of high-effort processes, and more specifically
described in the theory of reasoned action, and to a certain extent with cognitive dissonance,
since there is mental stress or discomfort involved that is related to cognitive dissonance. For the
most part, the subjects change their values since their actions cannot be altered in retrospect. Our
study was partially inconclusive when it comes to differentiating between cognitive responses
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and reasoned action, although the results point more in the direction of reasoned action as an
explanation.
According to our study, low-effort processes, play a minimal role, the same as collective
processes such as those described in the theory of social representation after graduation, and they
cannot be a driver of change. However, the theory cannot be fully disregarded: if we do not
know any other way of doing things, we tend to continue along the path we started on. As the
interviews have revealed, social representation theory can partly explain the processes at
university, where things are anchored and objectified in dynamic social processes involving
others, such as group work.
Low-effort processes also seem to be less important as an explanation of attitude change
among entrepreneurs because of the importance of business in the life of the entrepreneurs.
Therefore, one can conclude that low-effort processes play only a marginal role in the attitude
change that occurred after the point of graduation, but a larger role in the time leading up to
graduation.
Our study also shows that the preference for effectuation grows higher in association with a
higher level of experience.
Implications and limitations
Regarding the implications of this study, they can be divided into theoretical and managerial
ones. The study theoretically implies that causation versus effectuation use is not black or white,
but rather a mixture of grey tones, e.g. someone can be 70% causal and 30% effectual in making
a specific decision, and 40% causal but 60% effectual in making another decision. Moreover,
most people do not analyse their decisions in this way, and they also do not always clearly
remember the reasons for their choice. For example, they may try to give a better impression of
themselves, and therefore state that their decision was based on some systematic reasoning,
whereas it could have simply been of the “what feels best” type.
Regarding managerial implications, one can think that entrepreneurs with an adequate level
of education implement effectuation logic rather than causation logic. However, it is not very
clear which of the logics is more effective, depending on numerous factors such as financial and
environmental ones.
This study has some limitations. For example, it is a qualitative study of ten entrepreneurs,
and therefore the generalisability of the findings can be questioned. Additionally, the age and
profession of the participants and the industry they are operating in are varied. Individual
differences, such as personality traits, have also not been examined and considered.
Furthermore, there is an additional limitation due to a possible lack of understanding about the
different perspectives from the side of the interviewees. Additionally, one more limitation of this
study is that it builds upon retrospective data.
The qualitative method also makes it more difficult to draw definite conclusions, due to the
limitations in both scope and the fact that the answers are interpreted by the interviewer, and
his/her own bias might play a larger role than in a quantitative study.
Future Research and Propositions Development
Future research should be performed on a larger scale with a larger sample of entrepreneurs,
as our study only shows tendencies. An attitudinal study can also be undertaken based on the
attitudes of the ten interviewees of this study. A similar study was carried out in the different
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context of exporting attitudes (Coudounaris, 2012). A suggestion might be to replicate this study
using a quantitative approach and in a specific industry, e.g. the IT sector.
According to Sarasvathy (2001, 2008), causation has long been the predominant logic
taught in our classrooms today at business schools at the university level. Despite this,
Sarasvathy (2001) claims that most entrepreneurs favour effectuation as a decision-making
model.
Furthermore, there must have been a transformation in preferences shifting from causation
to effectuation. Even though Sarasvathy (2001); Sarasvathy et al. (2008) assume that attitudes
are something static, most social psychologists disagree with that notion (e.g. Arend et al., 2015)
and view our attitudes as ones that are continually evolving.
Proposition 1: Education in business is an education that indoctrinates future
entrepreneurs in the decision-making logic of causation.
According to the works of Sarasvathy (2001, 2008), most experienced entrepreneurs prefer
effectuation as a decision-making logic. This has to do with the fact that as entrepreneurs gain
more and more experience, the shift then is one towards effectuation. Sarasvathy acknowledges
that there is a change in decision-making logic, but she does not attribute it to any change in
logic, but rather through the lens of resources and networks. However, if one has a change of
perception towards an object, one also needs to have a change of attitude. Allport (1935, 1954);
Eagly & Chaiken (1993) refute this static view on attitudes.
Proposition 2: Most entrepreneurs prefer effectuation as a decision-making logic, and
attitudes are subject to change and are not static constructs in the way that Sarasvathy and Dew
(2008) assume.
The reason for this is that the more important something is for us, the more thought
processing capacity we use when thinking and reflecting on it. We assume that for an
entrepreneur, his or her business should be of such importance that a high degree of cognitive
effort is put into it. The theory stipulates that the more favourable a presumed outcome is
associated with behaviour (Ajzen & Fishbein, 1969; Fishbein, 1967) such as effectuation, the
more favourable an attitude the person will have towards effectuation as a decision-making
model. The difference here is that there is an active process involved and not just a generally
positive such as mere exposure. It seems we learn to associate different types of behaviours with
different types of rewards, dissonance processes or where group processes form our attitudes
towards an object such as in social representations theory. Social representation, to a certain
extent, includes an external locus of control, something that is atypical of the average
entrepreneur. However, in our propositions, we do not entirely refute other forms of attitude-
changing processes.
Proposition 3: The shift in logic is mainly driven through high-effort processes.
We propose that the shift towards effectuation as a preferred decision-making logic will
grow exponentially over time and that an entrepreneur with a long experience of business will
have a greater tendency to prefer effectuation. First of all, an entrepreneur who has done business
for a longer time will have gained greater experience, learned through trial and error, and have
been subject to low effort, high effort, and social representation processes (anchoring and
objectification). None of those processes can be excluded as means of attitude change, but we
propose that high-effort processes play a more prominent role than the other means of attitude
change. Sarasvathy (2001, 2008) stated that serial entrepreneurs were prone to adopt effectual
reasoning, meaning that over time the tendency towards effectuation should be more significant.
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Proposition 4: Entrepreneurs with more than five years of experience show a higher
degree of favourability towards effectuation compared to those with 2-5 years of experience.
FIGURE 1
THE FUTURE CONCEPTUAL MODEL
Figure 1 above shows the conceptual model, which is suitable for the tertiary education
system. The question is whether the educational system indoctrinates students of effectual logic.
We propose that this is the case. Then the question arises as to whether the following five
antecedents, i.e. a) low effort processes, b) high effort processes - cognitive responses, c) high
effort processes - expectancy-value processes, d) high effort processes - dissonance processes, or
e) social representation, constitute the main drivers of attitude change. The other important
question is whether attitudes towards the two types of decision-making model logics are stable
over time, and whether they are subject to change. Finally, a case study of an IT recruitment
company has recently been investigated in Tallinn, revealing very interesting insights about the
effectuation versus causation of the managing staff of the company (Arvidsson & Coudounaris,
2020).
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