Effectual Reasoning and Causal Reasoning in Creating New Businesses: A Case Study

Juan Miguel Rosa González, Miguel Eduardo Moreno Añez, Hilka Vier Machado

Abstract


This article focuses on the process of new business creation, considering the effectuation approach, which explains the phenomenon of entrepreneurship in a different perspective than the traditional causal approach. Beginning with a description of the effectual approach assumptions, a case study about the subject is presented in order to explore the logic of the business creation process. The case discusses a Brazilian organization created in 1980 to produce materials and services in steel industry. Through structured interview with the entrepreneur who idealized the business, the main events in the early stages of the project are described. The results show the relationship between entrepreneur’s means available at the time of the enterprise creation and the new business design. In addition, the entrepreneur preferred a strategy of drawing instead of a decision one, and gave priority to strategic partnerships as a substitute of formal market research. All these aspects are covered by the effectual approach.

Keywords


Business Creation; Effectuation; Entrepreneurship



DOI: https://doi.org/10.5585/ijsm.v10i2.1718

Refbacks

  • There are currently no refbacks.


Copyright (c) 2011 Iberoamerican Journal of Strategic Management

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Iberoamerican Journal of Strategic Management (IJSM)
Revista Ibero-Americana de Estratégia (RIAE)
e-ISSN: 2176-0756
https://periodicos.uninove.br/index.php?journal=riae

Iberoamerican Journal of Strategic Management (IJSM) © 2021 All rights reserved.

Is this work licensed with a License
Creative Commons Atribuição-NãoComercial-CompartilhaIgual 4.0 Internacional