Abstract

We incorporate a paradox perspective (e.g. Smith & Lewis, 2011) to investigate whether entrepreneurs combine elements of constrained, systematic search (e.g., Fiet, 2007) and effectuation (e.g., Sarasvathy, 2001). Previous research has suggested an inherent effectual paradox whereby expert entrepreneurs combine causal and effectual elements in order to create economic artifacts, yet scholars have largely ignored the causal side of the equation. Perhaps some causal actions lend themselves to more successful effectual outcomes than others. Because successful effectual outcomes include lower temporal and/or financial cost failures, ideal causal actions would assist an effectual entrepreneur in both entry and exit. This study notes that causal elements of constrained systematic search are particularly well-suited to further enable effectual entrepreneurs to both create new economic artifacts and to fail more quickly and/or at lower cost when appropriate. We develop testable hypotheses regarding the compatibility of effectuation and systematic search, and the outcomes of an effectual search process.

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