Linking Entrepreneurial Innovation to Effectual Logic

Abstract

The terms “innovation” and “effectuation” are frequently used but not in the same thought. In this order, publications linking innovation to effectuation are presented and discussed through a methodology based on the publish and perish tool. In the last two decades, effectuation has become an active criterion in entrepreneurship research. However, previous studies do not interconnect effectuation to the different innovation approaches. In order to overcome this gap, this paper focuses on studying innovation in an effectual context and linking different innovation approaches to effectual logic. Indeed, effectuation is a way of thinking that serves entrepreneurs in the processes of opportunity identification and new venture creation. Effectuation includes a set of decision-making principles expert entrepreneurs are observed to employ in situations of uncertainty (as defined in Society for Effectual Action). This article outlines the four most-studied innovation approaches from the date of their apparitions until January 2021: frugal innovation, disruptive innovation, lean start-up, and design thinking. In this context, effectuation as the essence of innovation must be clarified as a method that has similarities and differences with frugal and disruptive innovation, lean start-up, and design thinking. To validate the proposed theorical model, a bibliometrics tool, named “Harzing publish” or “perish”, is used. The main finding of this research affirms that the two most linked innovation approaches to effectuation are “lean start-up” and “design thinking”, compared to “frugal innovation” and “disruptive innovation”. In an entrepreneurial innovation context, design thinking and lean start-up are flexible tools that can stimulate and validate the effectual cycle.

How Artificial Intelligence Drives Sustainable Frugal Innovation: A Multitheoretical Perspective

“…Some studies consider frugal innovation along with other innovation theories with entrepreneurship. For instance, Ghorbel et al [39] attempted to link different innovation theories with effectual logic for entrepreneurial research, to include frugal, disruptive, design thinking, and lean start-up innovations. Farooq [33] developed a conceptual framework model with frugal innovation to contribute toward the entrepreneurship literature strategically.…”

The Decision-Making Process for Developing Sustainable Innovation via Dynamic Capabilities in Cleantechs

“…Another dimension of the decision-making field are the decision-making processes based on the perspective of entrepreneurial studies that cover the science of effectuation theory (Dias et al, 2019), whose conceptual characteristics are examined in more depth in this section. From this perspective, the entrepreneur is an agent that takes organizational decisions to leverage company performance in the market, by adapting and transforming opportunities into innovations and contingences into opportunities (Ghorbel et al, 2021;Roach, Ryman, & Makani, 2016).…”

“…The decision-making process is the driving force for the creation of value based on different types of innovation in cleantechs (Aagaard et al, 2021;Ghorbel, Hachicha, Boujelbene, & Aljuaid, 2021). According to the directions of the literature, its direct connection with the elements of dynamic capabilities (Inigo et al, 2017) and sustainable innovation (Cillo et al, 2019) remains open, so that it is possible to build a scientific logic among the business solutions of clean technologies that enables us to delve deeper into their different effects for organizations, the economy, and society.…”

“…In this sense, the scientific gap that this paper seeks to address lies in the works of Ghorbel et al (2021) and Aagaard et al (2021), explaining that different decision-making models should be explored under the lens of the decision-making process, particularly effectuation theory. In addition, Klewitz and Hansen (2014) and Cillo et al (2019) emphasize that sustainable innovation should be observed through the theoretical lenses of dynamic capabilities and resources, exploring contexts of different business organizations and innovations in processes, products, and routines.…”

New model for making resilient decisions in an uncertain context: The rational resilience-based decision-making model (R2DM)

“…Therefore, effectuation theory has emerged to resolve this issue. It is a decision-making process designed for expert entrepreneurs to help them create ventures in an environment marked by high uncertainty and resource scarcity (Ghorbel et al, 2021). This theory provides benefits ranging from Knightian Uncertainty management to supporting control logic and sustainability approaches (Sarasvathy and Kotha, 2001).…”