The process of new venture creation is characterized by the need to decide and take action in the face of uncertainty. Especially in the context of technology-based ventures uncertainty is substantial, posing difficulties for strategic decision-making based on prediction and planning. As alternative, more flexible and adaptive decision-making logics are being advanced. This study draws upon effectuation and causation as examples of planning-based and flexible decision-making logics, and investigates dynamics in the use of both logics. The study applies a longitudinal process research approach to investigate strategic decision-making in new venture creation over time. Combining qualitative and quantitative methods, we analyze 385 decision events across nine technology-based ventures. Our observations suggest a hybrid perspective on strategic decision-making, demonstrating how effectuation and causation logics are combined, and how entrepreneurs’ emphasis on these logics shifts and re-shifts over time. From our data, we induce a dynamic model which extends the literature on strategic decision-making in venture creation, illustrating how external and venture conditions - including not only uncertainty but also resource position and stakeholder pressure - lead to changes in venture scope, and thereby to shifts in the use of decision-making logics.
- decision making
- new venture creation
- process research
Reymen, I. M. M. J., Andries, P., Berends, J. J., Mauer, R., Stephan, U., & Burg, van, J. C. (2015). Understanding dynamics of strategic decision-making in venture creation : a process study of effectuation and causation. Strategic Entrepreneurship Journal, 9(4), 351-379. https://doi.org/10.1002/sej.1201