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Entrepreneurial decision making: examining preferences for causal and effectual reasoning in the new venture creation process

Gabrielsson, Jonas LU and Politis, Diamanto LU (2006)
Abstract
A growing body of studies emphasizes the discovery of opportunities and the decision to exploit them as the essence of entrepreneurial activity. Following this stream of research, we present a study of the influence of entrepreneurs’ career experience and career motives on two alternative modes of decision making logic; causation and effectuation. Causal reasoning is a process that rests on logic of prediction, while effectual reasoning relies on logic of control. Statistical analysis is made on a sample of 291 Swedish individuals involved in new venture creation. The findings suggest that entrepreneurs with prior small business management experience and with a linear or expert career motive have a higher preference for causal decision... (More)
A growing body of studies emphasizes the discovery of opportunities and the decision to exploit them as the essence of entrepreneurial activity. Following this stream of research, we present a study of the influence of entrepreneurs’ career experience and career motives on two alternative modes of decision making logic; causation and effectuation. Causal reasoning is a process that rests on logic of prediction, while effectual reasoning relies on logic of control. Statistical analysis is made on a sample of 291 Swedish individuals involved in new venture creation. The findings suggest that entrepreneurs with prior small business management experience and with a linear or expert career motive have a higher preference for causal decision making logic. Entrepreneurs with prior managerial experience from large firms and with a spiral or transitory career motive have a higher preference for effectual decision making logic. No association was found between prior start-up experience and entrepreneurs’ preferred decision making logic. The overall results give ample support for that entrepreneurs’ career experience and career motives influence entrepreneurial decision making. (Less)
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Working paper/Preprint
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submitted
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English
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additional info
Lund Institute of Economic Research Working Paper Series, 2006/5.
id
3d275d2c-9725-4227-a1cc-dc51282c707e (old id 942045)
date added to LUP
2016-04-04 14:29:05
date last changed
2018-11-22 14:28:34
@misc{3d275d2c-9725-4227-a1cc-dc51282c707e,
  abstract     = {{A growing body of studies emphasizes the discovery of opportunities and the decision to exploit them as the essence of entrepreneurial activity. Following this stream of research, we present a study of the influence of entrepreneurs’ career experience and career motives on two alternative modes of decision making logic; causation and effectuation. Causal reasoning is a process that rests on logic of prediction, while effectual reasoning relies on logic of control. Statistical analysis is made on a sample of 291 Swedish individuals involved in new venture creation. The findings suggest that entrepreneurs with prior small business management experience and with a linear or expert career motive have a higher preference for causal decision making logic. Entrepreneurs with prior managerial experience from large firms and with a spiral or transitory career motive have a higher preference for effectual decision making logic. No association was found between prior start-up experience and entrepreneurs’ preferred decision making logic. The overall results give ample support for that entrepreneurs’ career experience and career motives influence entrepreneurial decision making.}},
  author       = {{Gabrielsson, Jonas and Politis, Diamanto}},
  language     = {{eng}},
  note         = {{Working Paper}},
  title        = {{Entrepreneurial decision making: examining preferences for causal and effectual reasoning in the new venture creation process}},
  year         = {{2006}},
}