Understanding Dynamics of Strategic Decision Making in Venture Creation: A Process Study of Effectuation and Causation

Abstract

This study draws upon effectuation and causation as examples of planning-based and flexible decision-making logics and investigates dynamics in the use of both logics. The study applies a longitudinal process research approach to investigate strategic decision making in new venture creation over time. Combining qualitative and quantitative methods, we analyze 385 decision events across nine technology-based ventures. Our observations suggest a hybrid perspective on strategic decision making, demonstrating how effectuation and causation logics are combined and how entrepreneurs' emphasis on these logics shifts and re-shifts over time. We induce a dynamic model that extends the literature on strategic decision making in venture creation. Copyright © 2015 Strategic Management Society.