Causation, Effectuation & Dynamic Business Management Issues Analysis

This essay delves into the critical business management issues faced in the contemporary global environment, focusing on the concepts of causation and effectuation. It highlights challenges such as globalization, workforce diversity, technology, knowledge management, and multicultural effects, emphasizing the need for novel approaches in creating new ventures. The essay contrasts causation, which emphasizes prediction and control to achieve predetermined goals, with effectuation, which focuses on flexibility and leveraging available resources to create possible effects, even embracing affordable losses. It concludes by underscoring the importance of understanding these concepts for effective business management and competitive advantage in a dynamic global market, with both theories offering unique perspectives and tools for entrepreneurs and managers.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Drawing on the concept of causation and effectuation, critically discuss this statement and its
relevance to understanding the dynamic of business management issues in the contemporary
global business environment-......................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business management is the tool which is used for the managing and combining the business
resources for achieving the goals and objectives which were imposed in the beginning of the
business (Pettinger, 2020). Business management is the goal oriented and its main objective and
aim is how the goals of the business can be achieved. This is the regular and ongoing process for
managing all the activities of the business as well as monitors and directs tem towards the goals
of the business. The main functions of the business management are to organise, direction,
planning, staffing and supervising the organisation. It creates the environment for the employees
for Woking together in the team for achieving the goals and objectives of the business. This
essay will discuss about the concept of the causation and effectuation on the basis of this,
importance of understanding the business management issues in the global business
environment.
MAIN BODY
Drawing on the concept of causation and effectuation, critically discuss this statement and its
relevance to understanding the dynamic of business management issues in the
contemporary global business environment-
There are many business management issues which the businesses are facing in today’s
world. So to understand this dynamic management issues it is very important to go through the
novels for creating the new venture in the international business environment (Pride and et.al.,
2020). Some of the issues and challenges are:
Globalisation- This is the major issue which is the businesses are facing in the management. It
happens when the organisation is shifted to the new location across the world and there, they
have to adopt the activities of the host country and they have to face the high level of
competition in the new market. The transactions of these business takes place in the wider range
of the countries and in this process, the jobs of the managers is changing by the issues such as
the working with the people of different countries and many more.
Workforce diversity- When the businesses enters into the new market, then the workforce
becomes diverse in the company. This diverse workforce includes the women, senior citizens
and many more and managing this diverse culture in the organisation becomes very difficult for
the businesses at the global level.
1

Technology- The technological environment is the major issue which is faced by the very
organisation while entering into the global market. This technological comprises of the
innovations as well as the advanced techniques in the organisations for minimising the efforts
from the human resources (Fahrurrozi and et.al., 2020). The management has to consider the
rapidly changing technology by making modifications in the products and service of the
company. It helps the businesses to attain the competitive edge in the market and helps in
leading the market.
Knowledge management- Employees are the primary source of the knowledge. The
management has to accumulate the ideas from the employees as well in order to prepare the
policies and plans for the company. The ideas for the employees should be considered to meet
the expectations of the society by doing creativity in the products and services. So for
acknowledging this, it very necessary for the businesses to hire the candidate who comes up with
the new ideas of the market.
Multicultural effects- The another management issues facing the business is the modern
communication as well as the effective transportation system which has brought together the
people. It is very important for the business to involve the cross culture environment in the
organisation as this is continuously increasing. The multicultural includes different traditions,
values, social attitudes, religious beliefs as well as the living standard of the people and these all
creates the new issues for the management of the company (Szambelan, Jiang and Mauer, 2020).
Hence, these are the dynamic management issues which are facing by the managers of the
businesses in the current global business environment. So to evaluate and analyse this it is very
important to reach the novel concept approach for creation of the new venture.
Concept of Causation and Effectuation-
Causation is the process which mainly focus on the selection of the means of the creation
of this effect. The main assumptions of this theory is that the when the prediction of the future is
done, then it can be controlled. In this type of theory, the entrepreneur’s thinks and focus on the
outcome of the goals they want to achieve by taking the effective measures to achieve these
goals (Arvidsson, Coudounaris and Arvidsson, 2020). The main drawback of this theory that it
requires much time and efforts for the research sop that the outcomes achieved by the
organisation is real. The entrepreneurs in this starts with the whole big project plan and then for
2

this they take the decisions for all the other activities of the business in order to achieve the goals
of the organisation.
The process can be applied in the three different stages such as the personal level,
organisational level and the economy level. The business can use this theory as this helps them
to understand the relevance of understanding the issues of the business management in the
global business environment as this will help them to lead in the highly competitive market by
going through the novel approach for the creation of the new venture. This theory will provide
them all the necessary information which is required for achieving the desired goal as well as to
acquire this goal. The causation theory is very effective in the context of the static, linear and
the stable environments as the fixed goals has the room or space for the adaptations and changes.
It is very important for the organisation to understand the issue of the business management as
this is the major part which helps the organisation to lead and have the competitive advantage in
the market (Li and et.al., 2020).
This theory focuses on the controlling the future rather than the prediction so it provides
more emphasis on the exploitation of the current contingencies for controlling the unpredictable
future. The managers using this theory will help them to effectively understand the issues of the
multicultural market, technology and many more.
Effectuation theory is the process which has the focus on the selection of the possible
effects which can be created by the set of the means. This process theory rejects the goal
oriented thinking which follows same as the causation theory. The effectuation theory creates
the space or room for the flexibility and creativity. The entrepreneurs using this theory, helps
them to come up with the new solution according to the available sources. This process is very
crucial and difficult because it requires the great creativity while thinking the solution. The set of
the resources used in this theory is same as used in the causation theory that is the personal
means, organisational means as well as the economic means (Brenk and et.al., 2019).
Under this theory, the future is not predictable and the managers as well as the
entrepreneurs focus on the loss which is most affordable it effect will lead to. This creates the
way for the risk which is very important for the effectuation theory. As the causation theory
focuses more on the maximising the profits and on the other hand, the effectuation theory
focuses more on the effects that may lead to the most affordable loss of the organisation and for
this, the thinkers of this theory has more emphasis on the worst situations cases of the company
3

(Keskin, Wever and Brezet, 2020). The management issues using this theory can be understand
as this will help them to understand the issues and their effects if they are not considered in the
global business environment and this can be effectively done only by using the appropriate
concepts or the theories.
This theory proved very effective when it is used in very highly unstable global business
environments. The thinkers of this theory has the ability for adopting as well as creating the best
company for the evaluated business environment. This theory is also very better to be used when
the entrepreneur has the common idea for the direction of the business. It will help the
organisations to set the corporate strategies which help the organisation to attain the goals and
eliminate the issues of the business management and lead in the market.
CONCLUSION
This essay has discussed the business management issues such as the globalisation, technology,
multicultural effects, workforce diversity and many more which are faced by the businesses in
the today’s global business environment. These issues of the business management hinders the
organisations to achieve its goals and objectives effectively. Along with this, this essay has also
discussed the importance of going through the novels and concepts for the creation of the new
ventures as well as this essay has described the concepts of the effectuation and causation theory
which can be applied by the entrepreneurs for understanding the dynamic business management
issues in the global business environment.
4

REFERENCES
Books and Journals
Arvidsson, H.G., Coudounaris, D.N. and Arvidsson, R., 2020. The shift from causation to effectuation for
international entrepreneurs: Attitudes and attitude change versus social
representations. International Journal of Entrepreneurship, 24(3), pp.1-23.
Brenk, S., and et.al., 2019. Learning from failures in business model innovation: solving decision-making
logic conflicts through intrapreneurial effectuation. Journal of Business Economics, 89(8),
pp.1097-1147.
Fahrurrozi, M., and et.al., 2020. Business to Business ecommerce and role of Knowledge
Management. Business to Business ecommerce and role of Knowledge Management, 82.
Keskin, D., Wever, R. and Brezet, H., 2020. Product innovation processes in sustainability-oriented
ventures: A study of effectuation and causation. Journal of Cleaner Production, 263, p.121210.
Li, Y and et.al., 2020. Academic entrepreneurs’ effectuation logic, role innovation, and academic
entrepreneurship performance: an empirical study. International Entrepreneurship and
Management Journal, pp.1-24.
Pettinger, R., 2020. Introduction to management. Bloomsbury Publishing.
Pride, W.M and et.al., 2020. Business. Nelson.
Szambelan, S., Jiang, Y. and Mauer, R., 2020. Breaking through innovation barriers: Linking effectuation
orientation to innovation performance. European Management Journal, 38(3), pp.425-434.
5