Formation and Constitution of Effectual Networks: A Systematic Review and Synthesis

Abstract

The co-creational processes of effectuation represent an important development in understanding of entrepreneurial action. They also manifest in networks that are themselves important artefactual outcomes of effectual processes. To synthesize research connecting effectuation to the networks involved, this paper offers a systematic literature review. Following recent theorizing, the authors organize the literature around two general themes: (1) why and how network development occurs; and (2) what network develops. The resultant thematic model offers a comprehensive perspective on network development under effectuation logic. The analysis identifies that understanding of effectual networking and effectual networks is fragmented, incomplete and constrained by a lack of construct and contextual clarity. The authors present alternative perspectives on constructs and assumptions surrounding networks in effectuation, integrate network theory into effectuation, and generate important trajectories for future research.

Effectual Networks as Complex Adaptive Systems: Exploring Dynamic and Structural Factors of Emergence

“…There is a conceptual confusion about what effectual networks really are because they are mentioned in several applications (Kerr & Coviello, 2019). On the one hand, they are understood as initial relations that start the effectuation process, serving as the “Whom I know?” part of entrepreneurial means (Sarasvathy, 2001).…”

“…Therefore, there is a need for holistic and process-based understanding of effectual networks that would consider not only their structural elements but also the dynamic processes of their formation and their underlying logic. In other words, not only what actors constitute effectual networks but also how these networks come into being and evolve should be examined (Kerr & Coviello, 2019). Therefore, using the CAS perspective is beneficial because it enables the description of both the dynamic and structural characteristics of systemic entities.…”

“…Despite its considerable progress as a theory, many of its concepts require theoretical and empirical improvements (Arend, Sarooghi, & Burkemper, 2015; McKelvie, Chandler, DeTienne, & Johansson, 2019; Read, Sarasvathy, Dew, & Wiltbank, 2016). For instance, while effectual networks are the key building blocks of the effectuation process aiding decision-making under highly uncertain conditions (see e.g., Sarasvathy & Dew, 2003; 2005), our knowledge about their formation and constitution is still incomplete (Kerr & Coviello, 2019). As an illustration, Chandler, DeTienne, McKelvie, and Mumford (2011) argue that the deployment of network alliances and precommitments is equally implemented in both causation and effectuation.…”

“…The previous studies on entrepreneurial networks focused on either their dynamics (Coviello, 2006; Hite & Hesterly, 2001; Larson & Starr, 1993) or structural characteristics (Diánez-González & Camelo-Ordaz, 2019; Staber, 1993), without producing an integrative picture. Our CAS perspective, in turn, allows for coupling both the structural and dynamic factors of effectual network emergence and, therefore, follows an integral approach focusing both on what and how of effectual networks (Kerr & Coviello, 2019). It also connects their entrepreneur-level agentic features with system-level reactive features, which allows microlevels of analysis (a node level of an entrepreneur and his/her means) to be related with higher levels of analysis (a structural level of an effectual network as a system).…”

Uncovering the scaling of innovations developed by grassroots entrepreneurs in low-income settings

“…In this study, the focus lies with the stakeholder interactions and the development of the effectual network. At the start of the entrepreneurial venture, entrepreneurs have contacts to people whom they know, but these develop over time and experience (Kerr & Coviello, 2019). However, there is little empirical research on interactions, negotiations and commitments from stakeholders, which this study aims to reveal.…”