UNIVERSIDAD DEL PACFICO

INTERNATIONAL WEEK 2013

UNDERSTANDING ENTREPRENEURSHIP THROUGH ARTISTIC INTERVENTIONS



EFFECTUATION
THEORY vs.
CAUSATION
By: Castaneda, Lorena lorenacastaneda@gmail.com ; Villavicencio, Jose Antonio
jvillavicencio09@hotmail.com and Villaverde, Marcelino mvillaverdea@gmail.com (PERU).
Ref: Saras D. Sarasvathy. Causation and eectuation: Toward a theoretical shift from
economic inevitability to entrepreneurial contingency. Academy of Management Review,
2001.
Proffesor: Dr Rita G. Klapper
Expert entrepreneurs have taken actions in the field that have shaped into interesting
companies, making decisions in a unknown near future, an inverse proceeding of the
classical causational process. Still, they have learned how to take into advantage the
unknowable and start their businesses with strong foundations. Causation rests on a
logic of prediction - effectuation on the logic of control.
UNIVERSIDAD DEL PACFICO
INTERNATIONAL WEEK 2013
UNDERSTANDING ENTREPRENEURSHIP THROUGH ARTISTIC INTERVENTIONS

The thought of EFFECTUATION does not start with a specific goal; it usually starts with a
number of available resources and allows goals happen contingently over time, based
on the imagination and diverse aspirations of entrepreneurs and people with whom they
interact, focusing organization constantly reinvent continuously. Provides useful design
principles for transforming existing environments, generating new ones.
CAUSAL reasoning begins with the definition of a predetermined goals and obtaining and
selecting the means to achieve it. It seeks to identify the best alternative (faster, cheaper,
more efficient) to achieve the given goal. Here we consider and develop business plans,
calculations of return on investment (ROI) and the decision to diversify the portfolio of the
company. CAUSAL thinking is based on the explotation of existing knowledge to predict
the environment in which the organization will evolve, providing useful decision criteria to
achieve the objectives.
Causation models focus on maximizing the potencial returns for a decisin by selecting
optimal strategies, such as the porter model in strategy emphasize detailed competitive
analyses, the logic of the causation is to extent that we can predict the future we can
control it.

a. Causal 1: Responding some routinary request about a standard procedure.
b. Causal 2: Hire care specialist staff for Emergency Patients in a Hospital, in
order to improve the service to citizens.
c. Causal 3: Implement an office with new building materials in a given schedule.
d. Effectual 1 (pilot int the plane): When starting a new export company, at the
beginning I had doubts about the unknown market and consumers, but is in
the actual field where I learned the hard way how to make decisions and
taking real actions.
e. Effectual 2 (what if): Just recently, Ive been invited out to visit a new facility in
Trujillo, despite my unknown schedule, I decided to go and finally I did not
UNIVERSIDAD DEL PACFICO
INTERNATIONAL WEEK 2013
UNDERSTANDING ENTREPRENEURSHIP THROUGH ARTISTIC INTERVENTIONS

only learnt many facts about my new business, I also made new business
contacts.
f. Effectual 3 (bird in hand): Four years ago when finishing my college studies
and before preparing my thesis, I did not know much about my field, instead
I knew about social networks and design, so I decided to create a network
of students which within the years have become a bigger networking of
profesionals, and have developed into one my own consulting profesional
businesses with great success.

A Blue Ocean is created when the company achieves value innovation that creates
value simultaneously for both: the buyer and the company; while Effectuation is a set of
decision-making principles that expert entrepreneurs are observed to employ in situations
of uncertainty.
The relationship between Effectuation and Blue Ocean theory, is that the theory of
effectuation seeks to leverage the resources available to undertake any enterprise
initiative, while the Blue Ocean, seeks to find new markets and new niches for existing
markets, the cornerstone is value innovation. Both theories are complementary and
support entrepreneurship.