Abstract

Research on effectuation as an approach to decision making under uncertainty has increased steadily in recent years (e.g. McKelvie et al., 2013; Read et al., 2009; Wiltbank et al., 2009). Although the effectual approach is appealing as it offers hands-on principles to handle situations characterized by uncertainty, researchers still have limited knowledge as to when and how effectuation may constitute a superior option for decision making. This paper adds to the literature on effectuation by examining two specific issues. First, I examine the choice of using effectuation or causation under differing levels of uncertainty. Second, I examine the usefulness of effectuation by studying its impact on important outcomes, such as innovation and financial performance.

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