Part Two of Principles of Effectuation


In entrepreneurship, there are limitations like money, skills, etc. whether the entrepreneur thinks effectually or causally.  Saras Sarasvathy discusses the difference limitations between effectuation and causation. One important aspect of entrepreneurship is during the business establishment. The limitation to establish a business is based on the approach that the entrepreneur takes. So are there Principles of Effectuation that we need to follow?

Principles of Effectuation prompt the entrepreneur to concentrate on the things they can control. When establishing a business an effectual entrepreneur may seek venture capital. However, if there is no success in obtaining funding, the entrepreneur takes a different approach. It could be to get people to work with in terms of skills or finances. With causation method, however, the entrepreneurs wait for the right opportunity to start. That is, there is a lack of using all other resources within one’s control. The entrepreneur waits for opportunities instead of creating opportunities for himself.

The challenge in establishing a business is getting people to work with especially if you have limited resources. Mastering the art of communication to get people to work with you is important. Cooperative work, partnership and other relationship such mentorship are very important. This is the main reason why crazy quilt and pilot in the plane are key and take more time.

According to Saras Sarasvathy, effectuation Principles and causation method of doing entrepreneurship both have limitations. As the lemonade principle states, it is important to be flexible and to embrace surprises. Causation has some restriction and confinements making it impossible to adapt to situations whatever they may be. has an in-depth discussion on this matter.