Effectuation

Effectuation

Elements of Entrepreneurial Expertise

New Horizons in Entrepreneurship series

Saras D. Sarasvathy

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.

Preface

Saras D. Sarasvathy

Subjects: business and management, entrepreneurship

Extract

Every now and then one comes upon a genuinely new idea. Professor Saras Sarsvathy’s idea of effectuation is one such. Effectuation is a refreshingly new look at the old phenomenon of entrepreneurship. Indeed, it is a wholly new way of looking at the world around us. After reading this book, you will never look at the world of entrepreneurship the same way again. Sarasvathy’s work is based on a beautiful narrative, profound theory, a deep and visceral understanding of the entrepreneurship phenomenon, and everyday facts and events; and it is eminently practical – virtues that are bound to make it a classic in a short period. Core to effectuation is the idea that rather than discover and exploit opportunities that pre-exist in the world, the effectual entrepreneur is one who ‘fabricates’ opportunities from the mundane realities of her life and value systems. In the evocative phrase of Sarasvathy, entrepreneurs fabricate opportunities by starting with who they are, what they know, and whom they know – in short, all someone needs to create an entrepreneurial legacy in this world is to begin with their intellectual capital, human capital and social capital. At once liberating and practical, this simple idea forms the foundation for a beautiful theory of the ‘made’ world rather than the ‘found’ world that populates much of the textbooks and journal pages of the entrepreneurship literature. Significantly, she does not sell entrepreneurship short by interpreting it as a prosaic activity of starting a new business venture...