Sarasvathy’s Theory: Causation and Effectuation in Entrepreneurship

This study explores Sarasvathy’s theory of causation and effectuation in entrepreneurship and how it challenges the traditional model. It discusses the importance of innovation, risk management, and the novel perspective on expansion of new ventures. The study provides insights into the two approaches of entrepreneurship decision-making and their application in different scenarios. It also includes examples of successful ventures that have utilized these approaches. Course code, course name, and college/university are not mentioned.

Contemporary Management

Table of content
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Entrepreneurship and innovation challenge the traditional model of entrepreneurship............................3
Sarasvathy’s seminal article represents useful stand in entrepreneurship research..................................4
Novel perspective on expansion of new ventures and examples..............................................................6
CONCLUSION...........................................................................................................................................7
REFERENCES............................................................................................................................................8

INTRODUCTION
Causation and Effectuation is all above refers to new decision-making activity which
done by and used by entrepreneur effective process. It includes understanding or multiple
practices, evolution identification of market requirement, availability of resources that they have
or not and many more which is mainly done by successful goal achievement (Silva, Guimarães
and Castro, 2021). This study will provides information about Sarasvathy’s theory which mainly
refers to that new idea making activity and implementing activities in entrepreneurs and it will
useful for the determination of development of new business is beneficial or not.
MAIN BODY
Entrepreneurship and innovation challenge the traditional model of entrepreneurship
Traditional model of entrepreneurship refers to activities which done within specific
timing. It includes that entrepreneur has responsibilities like they have to evaluate market has
requirement of product or not, hire employee for sales, management, safety and many more.
Innovation and entrepreneurship: Innovation refers to new idea to generate new business
achievement and development of best result. Entrepreneurship is all above refers to activity
which includes identification of new opportunities with effective innovative ideas and continues
decision-making activities done by evaluation and identification of market requirements and
variations (Uehara, 2020).
Entrepreneurship decision-making activity affects by and implements changes according
to evaluation and identification of new changes in economic situation. Diversification in
environment like continues variation in people life styles, perspective about product and services
more engagement towards with expensive an exclusive brands and many more.
Innovation challenges like traditional model people mainly consider to buying services
from specific timing but after engagement of digitalization and when audience influence by this
concept entrepreneur has responsibility to generate twenty four hours services provide to
audience. Because people consider to use this approaches for influencing or affecting business
effectiveness.

Innovation mainly requires consideration and identification of managing task with
evolution and management of multiple approaches like they have responsibility to engage right
decision but its not and easier approach so for the entrepreneurship process mainly define and set
by proper justification of suitable activities with effective manner.
Risk management: Entrepreneur decide to develop new venture they have specific idea that this
product and services can survives in long term or not, they have to clarity that they reach success
or not, they have not clarity that this decision, product and services that power to influence
audience attraction and variations in environmental factors affects business activity or not
(Engmann and Ngwakwe, 2021). So its clear that an entrepreneur has not specific ideas that how
many thin g they have to engage in business. Idea about this concept makes sure that
organization mainly decide to evaluate right and proportionate.
Servives in the competitive market requires consideration and identification of various
task but its essential that entrepreneur always takes innovative practices and if they decides to
provide similar kind of product which already situated in market, entrepreneurs has
responsibility to implement new resources. Consideration and idea about this term makes higher
efficiency so entrepreneur has also consider developing innovative practice but they have to
evaluate and analyze market conditions.
Sarasvathy’s seminal article represents useful stand in entrepreneurship research
Sarasyathy’s entrepreneurship approach mainly generate distinguished between causation
and effectuations. These two approaches have different perspective to implement that variations
development in activities which influence entrepreneurship has different ideas, perception to set
new goal and develop exercise to generate solutions.
This model defines as entrepreneur’s uses resource for best solution development within
proper identification and evaluation of audience requirement. Idea about this term they can easily
select and evaluate that which term is useful and it will take higher efficiency in result
development. Entrepreneur has to decide right approach which makes their business higher
efficient because it has power to influences and generates correct decision with the flow of new
ideas. Both approaches define different perspective about entrepreneur implement decision

making activity for solution develop with identification and evaluation of correct solution for
successful goal achievement of from new venture are as follows.
Effectuation: It mainly defines as to managing multiple steps it includes resources use, goal
setting and decision-making. These three aspects useful for business venture development. It
takes small actions for long term goal development and expansion of effective (Rapp and
Olbrich, 2021).
In this concept entrepreneur evaluate resource availability like I phone brand their own
has responsibility to check which new technological tools is useful for goal achievement, which
new resources like they have to develop structure to attract people attraction and many more.
And for the continuity development in business activities requires consideration of essential
tools. So it means they have to evaluate and properly identified risk management and problem
solving techniques as well because of essential term.
Examples McDonalds McCafe because their entrepreneur decide to implement that they
mainly provide burger services and they continuously decide and reach other country attraction
with new technology engagement like online services provide and many more.
 Risk can be evaluate and analyze effectively by entrepreneur effective thought process
because they have responsibility to involve and measure tools which has power to resolve
problem. Knowledge about this concept makes higher efficiency in work activities.
 And the measure approach of this term is entrepreneur and develop predefine goal which
means they evaluate that they have to launch this product and services in market, and
they have to reach this goal from specific time.
 Interact with audience like which people mainly attracts by products and services so it
means evaluation of target audience and communicate with them.
Completion of overall activities major part of this approach is evaluating essential resources for
set goal completion. So its clear that effectuation approach is useful for new techniques and
essential resources engagement for successful goal achievement. Application of this method
which is prepares by Sarasvathy’s is really useful for entrepreneurship process improvement.

Causation: It refers to includes process to evaluate resources which beneficial for situated goals.
Entrepreneur implement continues improvement and implement practices like idea generates and
evaluate practices and many more tasks (Nelson and Lima, 2020).
Entrepreneur has responsibility to evaluate and identified many factors and according to
this model and approach makes idea about which things are beneficial for the identification of
necessary to evaluate market flow. Idea about this concept refers to predefine goals which means
entrepreneur has to consider this approach that when they decide to develop new venture, they
have to evaluate overall plan including with technological tools as well.
 Major determine goal like which resources they have to engage, decision-making about
revenue generate.
 Analyze that this product business ahs potential to reach success.
 Engagement of resource and which technological tools, electronic tools requires for
continuity in business process.
 Evaluation of competitive business for successful growth development and completion of
successful idea development with proper resources availability. Example of this approach
is checkout.com, Quanta and many more.
So its clear from idea about Causation practice and approach of entrepreneur process that
this one is more efficient and provide more impressive results. From the overall identification
about this term makes celerity to engage and develop higher efficient results. This approach
provides sustainable results from the evaluation and calculation of overall essential practice
before venture set up which entrepreneur uses this entrepreneurship process they can reach
goal with effective manner because they have ideas about which thing they have to engage
and solution of unwanted risks as well.
Novel perspective on expansion of new ventures and examples
On the basis of novel perspective it’s very clear that both has some prose and corns but
from the above study that Causation approach makes higher efficiency and it highly
influences performance of business.

Application of novel practices is best approach because utilization of this approach provides idea
to builds and develops motivation in entrepreneurship decision-making process. And when they
have to responsibility to build higher efficiency then they have to evaluate and analyses
causation approach because it provides clarity and consistency to mange unconditional and
unwanted risk (Alzamora-Ruiz and et.al., 2021).
Efficiency improvement in new busiensns ste-up requires idea about various tasks. And
entrepreneur always consider believing in take initiative for business effectiveness. And from
their behavior they naturally evaluate and develop right decision because they decide to
generate revenues. So from the Sarasvathy’s seminal article applied by entrepreneur makes
their decision higher effective and it develop result more powerful and consistence. So
utilization and application of two practices are beneficial. So individual enterprises has to
consider and uses this approaches but mainly they have to use causation approach when they
develop new venture and when entrepreneur influence new activities in existing business
they have to decide effectuation approach.
CONCLUSION
It has been summarized form the above reflective study that entrepreneur has various
approaches for decision-making development. But it mainly requires consideration and
identification of suitable entrepreneurship process. It has been very clear from the report that
entrepreneur and innovation both are different terms, entrepreneur has responsible to evaluate
market condition, resource arability, competitive industry, brands, product worth, define goals
and many more. From this study multiple aspects has been knowledgeable that application of
entrepreneurship process define by Sarasyathy’s define two major approaches for entrepreneur
actions makes higher efficiency for new venture development. Consideration about this concept
makes higher proportionate for solution development.

REFERENCES
Silva, J.P.M., Guimarães, L.D.O. and Castro, J.M.D., 2021. Facile/LigFerv: Hot water in three
seconds, thirty years of entrepreneurial process. Revista de Administração
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Uehara, M., 2020. Application of causation and effectuation processes to risk
management. Bulletin of Aichi Sukutoku University-Faculty of Business. 16. pp.15-27.
Coker-Farrell, E. and Imonitie, I., the impact of effectuation on entrepreneurial success. in 21st
academy of african business and development conference (p. 48).
Engmann, A. and Ngwakwe, C.C., 2021. A moderation approach to online social interaction in
entrepreneurship using the effectuation and causation theory. Journal of Governance
and Regulation/Volume. 10(2).
Rapp, D.J. and Olbrich, M., 2021. On predictive entrepreneurial action in uncertain, ill-structured
conditions. Review of Managerial Science. 15(7). pp.1961-1979.
Nelson, R. and Lima, E., 2020. Effectuations, social bricolage and causation in the response to a
natural disaster. Small Business Economics. 54(3). pp.721-750.
Alzamora-Ruiz, J., and et.al., 2021. Together or separately? Direct and synergistic effects of
Effectuation and Causation on innovation in technology-based SMEs. International
Entrepreneurship and Management Journal. pp.1-27.