Effectuation: Elements of Entrepreneurial Expertise (New Horizons in Entrepreneurship series) [Paperback]

Saras D. Sarasvathy (Author)

Book Description

Publication Date: May 31, 2009 | ISBN-10: 1848445725 | ISBN-13: 978-1848445727

To effectuate is to engage in a specific type of entrepreneurial action. It has special importance for situations where the future is truly unknowable or human agency is of primary importance. In Effectuation, Saras Sarasvathy explores the theory and techniques of non-predictive control for creating new firms, markets and economic opportunities.

Using empirical and theoretical work done in collaboration with Nobel Laureate Herbert A. Simon, the author employs methods from cognitive science and behavioral economics to develop the notion of entrepreneurial expertise and effectuation. Supportive empirical evidence is provided by the author's study of 27 entrepreneurs as well as other independent studies. The book then traces the consequences of effectuation for business management, economics and social philosophy. The author finds that effectuators generate constraint-satisfying solutions rather than searching for optimal ones, make rather than find opportunities, and in a deep sense, convert `as-if' propositions into `even-if' ones. The way they accomplish this is the central discussion of the book.

Students and scholars of entrepreneurship will find this path-breaking research of great value. The book's conclusions will also be of interest to those in the fields of behavioral and evolutionary economics, cognitive science and management.

Contents: Foreword by Lester Lave Preface Introduction Part I: The Empirical Journey - Entrepreneurial Expertise 1. What I Set Out to Study and Why 2. What I Found and How 3. Interpreting What I Found Part II: The Theoretical Journey - Effectuation 4. Understanding Effectuation: Problem Space and Solution Principles 5. Understanding Effectuation: Dynamics of the Effectual Process 6. Relating Effectuation to Performance Part III: Waypoint 7. Entrepreneurship as a Science of the Artificial 8. Competitive Advantages and Entrepreneurial Opportunities 9. Philosophy and Methodology of Effectual Economics 10. Markets in Human Hope Part IV: The Way Ahead 11. Teaching Effectuation 12. Research Works-in-Progress 13. New Research Ventures References Index

Editorial Reviews

Review

'The concept of effectuation is as subtle as it is profound. On the one hand, it challenges long held beliefs about the nature of cause and effect in social science. On the other hand, it generates a host of new insights about social phenomena. This concept is particularly well suited to analyzing entrepreneurial behavior - behaviors undertaken in settings where the relationship between cause and effect is understood, at best, very poorly.' --- Jay B. Barney, The Ohio State University, US

'Things rarely turn out as we expected or intended. Neither rational choice between well-defined prospects nor commitment to a vision, which can be realised by will power or persuasion, offers a credible representation of much human activity - even the activities of entrepreneurs. But although uncertainty (or unknowledge) is inescapable it may be productively managed. If we understand our present circumstances and some of its possibilities, build constructive relationships with others, and be ready to adjust both our objectives and the means of achieving them in order to take advantage of new contingencies, then we can at least participate in shaping our own future. By taking this perspective Saras Sarasvathy makes entrepreneurship a natural human activity, expressing the limitations and potential of human motivation and human intelligence.' --- Brian J. Loasby, University of Stirling, UK

'In Effectuation Saras Sarasvathy presents a carefully researched and reasoned view of entrepreneurial behavior that both challenges and extends prevailing wisdom in the field. There is little doubt that these ideas will serve as an important foundation for anyone desirous of stimulating positive action in the world. With Effectuation we are equipped to provide a generation of students and managers with the methods to make and find opportunities that create value... everywhere.' --- Leonard A. Schlesinger, Babson College, US

About the Author

Saras D. Sarasvathy, Associate Professor of Entrepreneurship, Darden Graduate School of Business, University of Virginia, Charlottesville, US

Product Details

• Paperback: 392 pages
• Publisher: Edward Elgar Publishing (May 31, 2009)
• Language: English
• ISBN-10: 1848445725
• ISBN-13: 978-1848445727
• Product Dimensions: 9.1 x 6.1 x 1 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #311,514 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

5.0 out of 5 stars Incredible Insight, January 16, 2010

By 

Steven K. Gold "Serial Entrepreneur & Author ... (Boston, MA USA) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Effectuation: Elements of Entrepreneurial Expertise (New Horizons in Entrepreneurship series) (Paperback)

This is an extraordinary book, the impact of which may not be recognized for a while. As an entrepreneur and teacher of entrepreneurship at the college level, I believe that there are two reasons why anyone interested in entrepreneurship (or how people behave and make decisions under conditions of uncertainty) should read this book. First, it provides an astute observation of what expert entrepreneurs actually do. Although we sense the way we make decisions and act, it's fascinating to see this behavior put into words. Second, by understanding part of the process better, we can begin to think about its implications, such as how to be even more effective.

Make no mistake about it, this book is NOT casual reading. Nor is it a textbook or practical guide to building an entrepreneurial venture. It is an academic treatise that explains many years of research, including the author's initial interest and rationale for pursuing this line of research, historical perspectives, design of the studies, interpretation of the data, and ultimately her final observations about how expert entrepreneurs (EEs) behave. For example:

*EEs start with a given set of means, rather than a predetermined goal, allowing opportunities to emerge

*EEs focus on spending what they can afford to lose, rather than seeking to optimize financial returns

*EEs don't think about competition; instead they work with customers and partners to fabricate a market

There's a tremendous amount of detail and information in the book that discusses how expert entrepreneurs behave. Beyond these individuals, I'm hopeful that the message of the book will have implications for other individuals and organizations, including corporations and governments, that often work under conditions of Knightian uncertainty but may not recognize or acknowledge this (if only because they don't know what to do in such situations). This book provides lessons and ideas that can help every individual and organization to be more effective.

Steven K. Gold
Senior Partner for Entrepreneurship, Franklin W. Olin College of Engineering
Author of Entrepreneur's Notebook: Practical Advice for Starting a New Business Venture

3 of 4 people found the following review helpful:

5.0 out of 5 stars Incredible!, November 16, 2009

By 

Bill "Bill" (Pennsylvania, USA) - See all my reviews

This review is from: Effectuation: Elements of Entrepreneurial Expertise (New Horizons in Entrepreneurship series) (Paperback)

This book not only clearly summarizes research on expert entrepreneurs and effectual logics, but also lays the foundations for whole new areas of inquiry in business.

A must read for researchers, entrepreneurs and innovators alike.