BA Business Studies: Causation, Effectuation & Management Issues Essay

This essay analyzes the concepts of causation and effectuation in the context of contemporary management issues, drawing upon Sarasvathy's work. It discusses how businesses are becoming more free-market oriented and entrepreneurial, and how emerging technologies are redefining business practices. The essay differentiates between causation, which focuses on achieving specific results with given means, and effectuation, which explores potential impacts with a given set of means. It uses the thought experiment 'Curry in a Hurry' to illustrate these concepts. Furthermore, the essay explains the rudimentary theory of effectuation, highlighting its principles such as affordable loss, strategic alliances, exploitation of contingencies, and controlling an unpredictable future. It connects these ideas to existing theories like organizational learning and Mintzberg's views on strategic planning. Finally, the essay proposes the role of effectuation processes at the levels of the economy, market/industry, and firm, emphasizing the importance of entrepreneurial activities, new market creation, and contingent aspirations in shaping economic decisions. The essay concludes by noting that human imagination and aspirations significantly influence and reshape economic artifices.

Individual essay

Table of Contents
Causation and Effectuation: Toward A Theoretical Shift from Economic Inevitability to
Entrepreneurial Contingency” by Sarasvathy..................................................................................1
REFERENCES................................................................................................................................5

Causation and Effectuation: Toward A Theoretical Shift from Economic
Inevitability to Entrepreneurial Contingency” by Sarasvathy.
It has been identified that there are different types of issues and problems that is faced by the
organisation due to contemporary management. It is important for organisation to correctly and
effectively deal with the challenges of contemporary management issues in order to effectively
and efficiently conducting business practices. as per the view of , it has been analysed that there
are large number of business all over the world that is becoming more free market oriented as
well as more entrepreneurial (Galkina and Jack, 2021). It has been identified that Fortune 500
have to deal with the issues of contemporary management which is significantly affecting its
function and performance. The emerging technologies that consist of internet lead to have major
affect productivity of business. This is not only affecting or creating rapid changes but it is also
fundamentally redefining on how business are truck or trace along with the way organisation is
interacting with each other. Through this article it has been determined that causation process
could be define as the process which is produce a specific results as a given just as spotlight on
choosing between the means to make that impact. It has been broke down that effectuation
process accept a bunch of means as given just as spotlight on choosing between potential impacts
that could be made with that arrangement of means.
This article includes the thought experiments that is Curry in a Hurry. This includes the process
for building an imaginary Indian restaurant that is Curry in a Hurry. In this two cases has been
determined in which one is using causation as well as other is effectuation. In this market is
explained as the area which consist of all potential customer sharing a specific necessities or
needs that is willing just as ready to take part in return to fulfill that requirements or needs. It has
been determined that it is crucial for organisation to gain accurate and correct information about
the customers needs and wants so that right and appropriate products or services could be
provided to customer. STP is one of the important process that needs to be consider by business
and this is refer as segmentation, targeting and positioning process. This will assist business to
determine and identify the actual needs of customers in order to attract them and increase the
sales and profitability of business (Galkina, Atkova and Yang, 2021).
Rudimentary theory of effectuation – Through this it has been analysed that it is pivotal to
underline that effectuation processes are not placed in this as preferable or more proficient over
causation processes in the making ancient rarities which incorporates firms, showcases just as
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economies. It is crucial to determined what circumstances in which type of processes are
significant for providing particular advantages as well disadvantages in an issue to be resolved
through future empirical investigation. Through this it has been determined that a it is crucial to
provide a proper goals as well as accurate decision needs to be taken for successfully and
correctly functioning. It is crucial to determine the set of effects or possible operationalization of
generalized aspirations ( Asemokha and et.al., 2021). There are different principles which is
significant part of the rudimentary theory of effectuation. These four principles are mention
below in detail –
The principle that form the core of a rudimentary theory of effectuation
 Affordable loss rather than expected – It has been determined that causation model is
majorly focusing on the maximization of the potential returns for a decision by selecting
optimal strategies. Through effectuation company is able to determine the capacity of
losses that could be affordable as well as focuses on experimenting with different
strategies as possible.
 Strategic alliance rather than competitive analysis – The causation models that includes
Porters models have more emphasize on the detailed competitive analyse. Effectuation is
majorly considering about the strategic alliances as well as pre commitments form the
various stakeholders with the motive of reducing entry barriers.
 Exploitation of contingencies rather than exploitation of pre-existing knowledge –
Causation models are effective for pre-existing knowledge such as expertise in new
technology for competitive advantage. Effectuation is consider to be significant for better
exploiting contingencies that increase unexpectedly over time.
 Controlling an unpredictable future rather than predicting an uncertain one – it has been
analysed that causation process is significant for the predictable aspects of an uncertain
future (Memar, Sundström and Larsson, 2021). Effectuation is majorly focusing in the
controllable aspects of an un predictable future.
Connection with existing theories and empirical evidence
It has been identified that organisational learning is including different aspects of decision which
consist of different scarce resources that are allocated between the exploration of new
possibilities as well as exploitation of old certainties. Both of these decision are very
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complicated for organisation as it has been identified that its costs or benefits will be dispersed
over the time. it is essential for company to have a proper balancing between the allocation
between exploration as well as exploitation is crucial to the survival as well as sustenance of the
organisation. As per the statement of Henry Mintzberg it has been analysed that strategic
planning can not be consider as the strategy formation. It is essential for company to have
different models of decision making in which one should not focus on the on the analysis and
predicton but it needs to consider synthesis as well as action.
Propositions for the role of effectuation process in the business – There are different roles of
effectuation processes with in the business which is mention below in detail –
 At the level of economy – It has been identified that macro economic policy is the
fostering of entrepreneurial activities that is significant for enhancing innovation, growth
and productivity in the economy. In the free market capitalism it has been determined
that both job creation and increase in real per capita income has been depended on the
entrepreneurial activities that is especially in the formation or development of new firm.
 At the level of the market or industry – There are different companies that is significant
for creating a new market area or industries along with the new organisation in the
current industries. It has been determined that opening of new market area as well as
industries are plugged into an exploited social as well as technological contingencies
which could not been planned or anticipated by the business ( Harms and et.al., 2021).
this includes changing along with the revolutionary scale and expectation of different
stakeholders, customers or investors of the organisation.
 At the level of the firm – It has been determined that there are different success and
failure factors for the new venture that is affecting its business practices. it has been
analysed that within the firm there is different levels of founders as well as decision
makers.
Contingent aspiration and the entrepreneurial imagination
It has been analysed economic and management lead to have long rested on primitives that
includes products and market along with the institution such as industry and economy.
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Successful entrepreneur lead to have long created firms, industries as well as economies with the
practices of matching up offspring of human imagination. It has been determined that human
imagination as well as human aspirations will lead to influence each other along with this
reshapes one another directly through economic artifices. This could be consider as the major
reason due to which path and destination are un clear in economic decision making practices. due
to unclear destinations there is no pre-existents of the goals, causal road maps are consider to be
less useful than effectual exchange of information between all stakeholder that are involved in
the journey.
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REFERENCES
Books and Journals
Galkina, T. and Jack, S., 2021. The synergy of causation and effectuation in the process of
entrepreneurial networking: Implication for opportunity development. International Small
Business Journal, p.02662426211045290.
Galkina, T., Atkova, I. and Yang, M., 2021. From tensions to synergy: causation and effectuation
in the process of venture creation. Strategic Entrepreneurship Journal.
Asemokha, A and et.al., 2021, January. Business Model Innovation in the Internationalization of
SMEs: The Role of Causation and Effectuation. In Proceedings of the 54th Hawaii International
Conference on System Sciences (p. 5059).
Memar, N., Sundström, A. and Larsson, T., 2021. Teaching Causation and Effectuation in the
Large Classroom: A Production–Trade Game. Journal of Management Education, 45(3), pp.438-
478.
Harms, R., and et.al., 2021. Effectuation and causation configurations for business model
innovation: Addressing COVID-19 in the gastronomy industry. International Journal of
Hospitality Management, 95, p.102896.
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