Abstract

In recent research several constructs have emerged, which differ from more traditional model of entrepreneurship in how they explain entrepreneurial decision making (Fisher, 2012). The most prominent, the theory of effectuation (Sarasvathy, 2001) describes a “set of heuristics for decision making in uncertain environments” (Read et al., 2009). Contrary to a prediction-based, causal planning approach, effectuators take into account the unpredictability of events due to uncertainty and thus follow a non-predictive, emergent strategy approach (Wiltbank et al., 2006). Even though still under debate, researchers have shown a positive effectuation-performance relationship especially under conditions of high uncertainty (Chandler et al., 2011). However, it remains unclear, how effectuation creates value from uncertainty-resolution activities and how this leads to a performance improvement (Arend et al., 2015). This study fills this gap by showing how effectual behavior of entrepreneurs manifests itself on the firm level in the increased use of the Lean Startup methodology (LSM) (Ries, 2011), thereby creating value from systematically applying a set of principles geared towards reducing business model uncertainty (Blank, 2013).

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