Entrepreneurship and Innovation: Contemporary Management Issues

This essay provides a contemporary evaluation of entrepreneurship and its challenges in the 21st century. It discusses the transformation of business enterprises through the utilization of available resources to generate revenues. The report evaluates and critiques the use of effectuation in business, disclosing the processes and effects of effectuation and causation, including explicit assumptions in dynamic environments. Contingencies related to these concepts are also explored. Furthermore, the report describes the role of effectuation in the market or industry, highlighting the shift from economic inevitability to entrepreneurial contingency and the importance of adapting to the changing business world.

Contemporary
Management Issues in
21st Century

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Contemporary Debates on Entrepreneurship and Innovation Challenges with Traditional
Model......................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES ...............................................................................................................................6

INTRODUCTION
Contemporary management is stated as the control on processes, innovation and
resources used in an organisation. This is done by an company in order to achieve intended goals
within existing realities, conditions and restrictions in accordance with the economic and social
rationality of economic activities. There are various management theories that helps managers in
better planning, organising and controlling operations to achieve greater market coverage. In the
following report various processes of market development are mentioned naming as Causation
and Effectuation. The important characteristics of effectuation and causation are also explained
with the help of Sarasvathy's article that is important for entrepreneurship in its development to
tackle losses, exploit contingencies and control unpredictable future. Entrepreneurship
development depends on various factors and various theories and models have been used for this
purpose.
MAIN BODY
Contemporary Debates on Entrepreneurship and Innovation Challenges with Traditional Model
Understanding the process of innovation and firm levels has transformed with the long
run in recent decades (Karami, 2020). Previously the companies and enterprises with simple and
unified models are developing with complexity in operations and fundraising through
stakeholders. Differentiated by the focus of management, strategies, plans, structure, internal-
external operations. The Sarasvathy's seminal article defines innovation of an enterprise by
causation and effectuation to choose the best process of developing an enterprise. Effectuation
process is concerned with developing new ideas with the given amount of resources and
causation is concerned with the complete creation of a complete enterprises. Sarasvathy's article
have propounded various processes of entrepreneurial development.
Sarasvathy's theory of effectuation and causation is a process to make decisions and
performing actions in entrepreneurial process, where you identify the upcoming suitable plan by
evaluating the availability of resources to achieve goals, while continuously stabilising these
resources and goals on the pendulum. There is a argument on a fact that casual actions and
knowledge cannot influence the risks that are inherited or characterised and present with along
the previous entrepreneurial skills.
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Elaborating on the theories that were given by Sarasvathy about effectuation involving various
principles embedded below: Bird in Hand Principle: According to this principle the utilisation of resources by the
entrepreneur which are already present with them(Cotta de Mello, da Rocha and Pacheco,
2021). It means about the knowledge, experiences, materials and human resources,
aligning options based on who they are. Principle of affordable loss: According to this principle the entrepreneur should only
focus on affordable losses that can be bearable and does not crushes the whole enterprise.
The entrepreneur takes low profit initiatives and indulges in activities that require less
investments as of to take precautions that arises due to failures. The Crazy Quilts Principle: This principle states that the entrepreneur should use various
things that suits to its budget and lowers costs in innovating its products(Packard and
Clark, 2020). The entrepreneur should make the organisation strong with making its walls
strong by building such image with its deals that are everlasting. The dealers of the
organisation should be in collaboration to the organisation and each others. The Pilot in the Plane Principle: The entrepreneur should make its focus towards the
short term achievements not on the achievements of future. They work along the business
to run it and maintains the activities of business focusing on achievement of short term
objectives. If an organisation is able to achieve short term objectives then they would be
slowly but gradually patching towards long term objectives of a business. It is expected
by the entrepreneur that they would consider their focus on short term like a pilot of the
plane.
 The Lemonade Principle: Make lemonade means make use of potential depressed
resources or under utilized resources. The entrepreneur should make us of available and
not utilized resources so that nothing gets wasted(Peng, 2021). Every single piece is
important for the business and optima use of these products would garner best results.
The entrepreneurship plays an essential role in building innovative and creative
enterprises, the entrepreneurial ventures largely contribute to the growth and development of the
economy effectively. With growing trends and changes in the business world around the globe
due to the introduction of new and advance technology and growing innovational practices, there
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is shift from economic inevitability to entrepreneurial contingency. The world is moving from
traditional models to entrepreneurship in order to continue to survive and enhance their
performance in the marketplace. As per the article Causation and effectuation: Towards a
theoretical shift from economic inevitability to entrepreneurial contingency by the Sarasvathy
helps in determining the important aspects of the entrepreneurship and offers an novel
perspective on the enhancement of new ventures (Bratton, 2020). The article focus on theory of
effectual reasoning with an proper focus on development of the entity in the non existent market.
Effectuation helps in determining the possible stand that can be taken into consideration with the
possible set of means. As per the article the effectuation is the actor dependent but whereas the
causation is considered to be the effect dependent. The theory of effectuation process refers to
the approach used in order to make the decision and performing required actions in the
entrepreneurial process. Under this the next best possible step is determined through evaluating
the resources available leading to achieve desired goals and objectives and enhancing overall
performance. Along with balancing these goals and objectives with the available resources
effectively.
With growing needs and changing demands it is essential for the entrepreneurs to thinks
effectually, it includes thinking without having proper or specific objectives, but instead
beginning then determining where needed to be. Business organisation are also determined to
think casually as it leads to representing to be more systematic method. The effectuation theory
considered to be one of the major focus of this article (Foroudi and Palazzo, 2019). The effectual
causal decision making helps in analysing how entrepreneur use or ignore the resources in their
control in respect to the commitment and constraints from the self chosen stakeholders to
develop products, opportunities and chosen marketplace. In addition to this, there are various
features or characteristics of the effectuation such as selection criteria on the basis of affordable
loss, excellency at exploiting contingencies and explicit assumptions of changing environment.
The selection criteria depending on the affordable loss helps in determining the loss that
can occurred and how it can be minimised leading to enhance their overall performance and
accomplishing desired goals and objectives. In addition to this it also help in determining the
excellency at exploiting contingencies leading for better results (Kumar, 2020). In addition to
this, in order to determine the link or connection among the work and the proposed theory of
effectuation the various theoretical work of mintzberg and weick is taken into consideration. The
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mintzberg's managerial theory in developed on the basis of idea that the manager are mainly
involved in the 10 roles and further these roles are divided in main three roles such as
interpersonal, informational and decisional.
The theory focus on maintaining the performance and efficiency of the organisation and
allowing the leads their team members towards accomplishment of the desired goals and
objectives of the organisation. The another theoretical framework taken into consideration is the
Karl weick theory of organising, this theory focus on enhancing the communication process in
the organisation, with the changing environment it is essential for the entities to retain their
employees and customers for long period of time. As this will help the organisation to enhance
their overall performance effectively. Along with the theoretical model the article also focus on
determining the current empirical works that comes outside the traditional causation models as
well. With the growing changes it is essential for the business world as well as for the
entrepreneurs to keep evolving and make the required changes as per the situations.
The role of the effectuation is determined at various levels such as economy, the market
or the industry and the decision-making makers (Howard and Hatfield, , 2018). Through this the
role of the effectuation at different level is determined effectively and efficiently. Through the
article it is determined that the essential agent of the entrepreneurship are considered to be the
effectuator who are effectively working towards the changing environment and innovation
effectively. The use of this frameworks will help the entrepreneurs to deal with the challenges
and accomplish desired goals and objectives.
CONCLUSION
In the following report an contemporary evaluation of entrepreneurship and challenges
are explained. A business enterprises seeks development and transformation with the available
resources that can be utilized to generate revenues. In the report evaluation and critics of use of
effectuation on an business can be evaluated. In this report an process and effects of effectuation
is also disclosed to explicit assumptions of these theories in dynamic environments. Further, in
this report evaluation of contingencies related to causation and effectuation are also explained.
Moreover, the report had been describing about the market or industry and the role of
effectuation on an business.
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REFERENCES
Books and Journals
Bratton, J. ed., 2020. Organizational leadership. Sage.
Kumar, A., 2020. PRODUCT AT THE CROSSROADS OF SPACE, LANGUAGE AND
MEANING. Journal of Contemporary Management Research, 14(2).
Howard, D. and Hatfield, F.M., 2018. Aphasia therapy: Historical and contemporary issues (Vol.
7). Routledge.
Foroudi, P. and Palazzo, M. eds., 2019. Contemporary Issues in Branding. Routledge.
Peng, G. Z., 2021. An Empirical Application to MNC Subsidiary Ownership. In Toward
Behavioral Transaction Cost Economics (pp. 233-264). Palgrave Macmillan, Cham.
Packard, M. D. and Clark, B. B., 2020. On the Mitigability of Uncertainty and the Choice
between Predictive and Nonpredictive Strategy. Academy of Management
Review, 45(4). pp.766-786.
Cotta de Mello, R., da Rocha, A. and Pacheco, H. F., 2021. CROSS-BORDER HEALTH CARE
SERVICES AS INWARD INTERNATIONALIZATION. Internext: Revista
Electrônica de Negócios Internacionais da ESPM, 16(3).
Karami, M., 2020. Effectual Versus Causal International Opportunity Discovery and Creation:
Implications for SMES’Competitive Advantage. In Entrepreneurship and the
community (pp. 29-48). Springer, Cham.
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