Management, entrepreneur, business plan, field of entrepreneurship, creation of new opportunities, theory of effectuation, Sara Sarasvathy, intellectual construction, effectual approach
The field of entrepreneurship has experienced remarkable progress over the past fifteen years. To begin with, there is a great amount of work that highlighted how the creation of new ventures opportunities can be discovered and exploited. The Theory of Effectuation, developed by Sara Sarasvathy in 2001, offers an original framework in the ways of thinking and acting of entrepreneurs, including their approaches to opportunities.
[...] In her theory, Sarasvathy considers that effectual entrepreneurs often start their creation process with a simple idea (or any at all). The means, personality, interpersonal skills, own resources, personal networks and help of others are decisive in the quality of the venture being created. Indeed, the real value of the business plan isn't the document itself, it's the process of investigating and finding information, thinking, experimenting and testing ideas. It can bring a lot more to the entrepreneur: self-confidence, self-train, experimental approaches, forcing him to leave usual modes of thinking, putting himself ‘in the shoes' of the customers. [...]
[...] VENKATARAMAN, S. (2000). The Promise of Entrepreneurship as a Field of Research. In: Academy of Management Review. Vol No 217- 226. READ, S. SARASVATHY, S. DEW, N. WILTBANK, R. OHLSOON, A.V. (2011). Effectual Entrepreneurship. Routledge, Taylor and Francis, London. [...]
[...] - Causal thinking is built upon competitive analyses, while effectual is into strategic partnerships. - Causal thinking uses existing data/knowledges, while effectual is all about eventualities. Sarasvathy took the chef example as a great sketch for both ways of thinking. There's the first chef who knows exactly what to do with his ingredients: he's a causal thinker. The second chef doesn't know his today's ingredients, ideas will emerge and materialize little by little with imagination, innovation, spontaneity and several variables: he's an effectual thinker, he didn't need a prior plan. [...]
[...] (1994). A process model of entrepreneurial venture creation. In: Journal of Business Venturing. Vol Issue 223-242. SARASVATHY, S.D. (2001). Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency. University of Washington. In: Academy of Management Review. Vol No 243-263. SCOTT, S. (2000). Prior to Knowledge and the Discovery of Entrepreneurial Opportunities. In: Organization Science. Vol No 448-469. SCOTT, S. [...]
[...] The effectual entrepreneur takes the business plan as a useful tool to acquire resources, highlight managerial and financial aspects, gain confidence through the process, while designed business models are useful to guide the entrepreneurial team in action. We can conclude by quoting the Amazon founder's belief: ‘Any business plan won't survive its first encounter with reality. The reality will always be different. It will never be the plan.' (Jeff Bezos). References BEZOS, J. (2011). Instant MBA: Business Plans Are Important And Necessary. Available on: BusinessInsider. com. CUODANO, G. (2020). Jeff Bezos Teaches You When Judgment Is Better Than Math And Data. Available on: FourWeekMBA. com. BHAVE, M.P. [...]
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