Sarasvathy’s Seminal Article: A Novel Perspective on New Venture Development

Business

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Critically evaluate the view that Sarasvathy’s seminal article represents an important strand in
entrepreneurship research and gives us a novel perspective on the development of new
ventures........................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business is an enterprise that plays key role of producing along with distributing
commodities and services for satisfying demand or needs of public. Society does not exist
without any economic form, in this, businesses or enterprises are what which make up economic
system of world (Yang and Gabrielsson, 2017). In present era, entrepreneurship is emerging
trend that helps addition to supports entrepreneurs for developing new venture to come with
innovative offerings having potential to meet customer and market demand. The essay evaluates
views which seminal article of Sarasvathy represents significant strand in entrepreneurship
research addition to provide novel perspective on new venture development.
MAIN BODY
Critically evaluate the view that Sarasvathy’s seminal article represents an important strand in
entrepreneurship research and gives us a novel perspective on the development of new
ventures
Entrepreneurship is about discovering new ways to combine resources. At the time, when
market value is generated through the new combination of resources is more than market value
resources can generate, entrepreneur makes profit. For example, an entrepreneur takes resources
essentially for producing pair of jeans which could be sold for fifty pounds and instead turning
them into denim backpack which sells for seventy pounds will earn profit through enhancing
values those resources create. In accordance to Sarasvathy (2001), Causation along with
Effectuation are major elements that serves as basis to develop a new venture or establishment.
These two elements play great role in shifting inevitability of economy to entrepreneurial
contingency. Causation rests on logic of prediction, while effectuation is based on logic of
control. Causation implies that entrepreneurs emphasis on predefined objective and further aim
for finding a means to reach desired objective. Processes of causation takes a specific effect as
given along with focuses on selecting among means to create the effect. While, effectuation is an
approach for making decision addition to performing practices in entrepreneurship process,
wherein entrepreneurs identify next and best step through assessing resource that are available to
attain goals while continuously balancing goals with resources. Among the both elements,
causation is mostly preferable at the time when entrepreneurs emphasise on knowledge,
however, effectuation is preferred to focus on capitalising on opportunities.
1