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Effectual versus predictive logics in entrepreneurial decision making: Differences between experts and novices: Does experience in starting new ventures change the way entrepreneurs think? Perhaps, but for now, "Caution" is essential

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  • Baron, Robert A.

Abstract

The preceding paper by Wiltbank et al. reports that highly successful and experienced entrepreneurs rely, to a greater degree than novices (MBA students), on effectual logic. This finding raises a key question: Why do these two groups differ? The authors imply that this difference is the result of entrepreneurs' experience in starting new ventures. This is a reasonable suggestion but unfortunately, there are important reasons for viewing it with caution. The most crucial of these involve serious threats to internal validity arising from the use of a post-test only design with nonequivalent groups [see Cook, T.D., Campbell, D.T. (1979). Quasi-experimentation design and analysis issues for field settings. Boston: Houghton Mifflin]. Such designs are helpful, but do not allow for firm conclusions regarding causal relationships between variables. This is an important point for entrepreneurship researchers who, because of practical constraints, must often adopt such designs. Additional difficulties with respect to interpreting the obtained results derive from the fact that although the study is cast as being closely related to research on expert performance, several key links to that extensive literature remain unclear. Overall, however, it is a creative contribution, and paves the way for additional informative research.

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  • Baron, Robert A., 2009. "Effectual versus predictive logics in entrepreneurial decision making: Differences between experts and novices: Does experience in starting new ventures change the way entrepreneurs think? Perhaps, bu," Journal of Business Venturing, Elsevier, vol. 24(4), pages 310-315, July.
  • Handle: RePEc:eee:jbvent:v:24:y:2009:i:4:p:310-315
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    References listed on IDEAS

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    1. Robert A. Baron & Michael D. Ensley, 2006. "Opportunity Recognition as the Detection of Meaningful Patterns: Evidence from Comparisons of Novice and Experienced Entrepreneurs," Management Science, INFORMS, vol. 52(9), pages 1331-1344, September.
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    Cited by:

    1. Amir Emami & Datis Khajeheian, 2018. "Social Norms and Entrepreneurial Action: The Mediating Role of Opportunity Confidence," Sustainability, MDPI, vol. 11(1), pages 1-18, December.
    2. Marko Matalamäki & Tero Vuorinen & Elina Varamäki & Kirsti Sorama, 2017. "Business Growth in Established Companies; Roles of Effectuation and Causation," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 25(02), pages 123-148, June.
    3. Lin, Nidthida & Wilden, Ralf & Chirico, Francesco & Ghasrodashti, Elahe & DeTienne, Dawn R., 2022. "Persist or let it go: Do rational entrepreneurs make decisions rationally?," Journal of Business Venturing, Elsevier, vol. 37(4).
    4. Jeffery S. McMullen & Katrina M. Brownell & Joel Adams, 2021. "What Makes an Entrepreneurship Study Entrepreneurial? Toward A Unified Theory of Entrepreneurial Agency," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1197-1238, September.
    5. Judith Behrens & Holger Patzelt, 2016. "Corporate Entrepreneurship Managers’ Project Terminations: Integrating Portfolio–Level, Individual–Level, and Firm–Level Effects," Entrepreneurship Theory and Practice, , vol. 40(4), pages 815-842, July.
    6. Francesc Miralles & Ferran Giones & Carla Riverola, 2016. "Evaluating the impact of prior experience in entrepreneurial intention," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 791-813, September.
    7. Shirokova, G. V. & Bogatyreva, K. A. & Morris, M. H., 2014. "Expertise, university Infrastructure and cognitive logic: Assessing students who start ventures," Working Papers 6253, Graduate School of Management, St. Petersburg State University.
    8. Stroe, Silvia & Parida, Vinit & Wincent, Joakim, 2018. "Effectuation or causation: An fsQCA analysis of entrepreneurial passion, risk perception, and self-efficacy," Journal of Business Research, Elsevier, vol. 89(C), pages 265-272.
    9. Yi Jiang & Charles-Clemens Rüling, 2019. "Opening the Black Box of Effectuation Processes: Characteristics and Dominant Types," Entrepreneurship Theory and Practice, , vol. 43(1), pages 171-202, January.
    10. Alexander McKelvie & Gaylen N. Chandler & Dawn R. DeTienne & Anette Johansson, 2020. "The measurement of effectuation: highlighting research tensions and opportunities for the future," Small Business Economics, Springer, vol. 54(3), pages 689-720, March.
    11. Cacciotti, Gabriella & Hayton, James C. & Mitchell, J. Robert & Allen, David G., 2020. "Entrepreneurial fear of failure: Scale development and validation," Journal of Business Venturing, Elsevier, vol. 35(5).
    12. Amir Emami & Dimo Dimov, 2017. "Degree of innovation and the entrepreneurs’ intention to create value: a comparative study of experienced and novice entrepreneurs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 161-182, August.
    13. Richard J. Arend, 2020. "Getting Nothing from Something: Unfulfilled Promises of Current Dominant Approaches to Entrepreneurial Decision-Making," Administrative Sciences, MDPI, vol. 10(3), pages 1-22, August.
    14. Engel, Yuval & Dimitrova, Nicoletta G. & Khapova, Svetlana N. & Elfring, Tom, 2014. "Uncertain but able: Entrepreneurial self-efficacy and novices׳ use of expert decision-logic under uncertainty," Journal of Business Venturing Insights, Elsevier, vol. 1, pages 12-17.
    15. Emami, Amir & Yoruk, Esin & Jones, Paul, 2023. "The interplay between market need urgency, entrepreneurial push and pull insights and opportunity confidence in the course of new venture creation in the developing country context," Journal of Business Research, Elsevier, vol. 163(C).
    16. Mitja Jeraj & Miha Maric & Ivan Todorovic & Mladen Cudanov, 2015. "The Role of Openness and Entrepreneurial Curiosity in Company’s Growth," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 371-371, February.
    17. Uy, Marilyn A. & Foo, Maw-Der & Song, Zhaoli, 2013. "Joint effects of prior start-up experience and coping strategies on entrepreneurs’ psychological well-being," Journal of Business Venturing, Elsevier, vol. 28(5), pages 583-597.
    18. Mumford, Jonathan Van & Zettinig, Peter, 2022. "Co-creation in effectuation processes: A stakeholder perspective on commitment reasoning," Journal of Business Venturing, Elsevier, vol. 37(4).
    19. Villani, Elisa & Linder, Christian & Grimaldi, Rosa, 2018. "Effectuation and causation in science-based new venture creation: A configurational approach," Journal of Business Research, Elsevier, vol. 83(C), pages 173-185.
    20. Jiang, Yi & Tornikoski, Erno T., 2019. "Perceived uncertainty and behavioral logic: Temporality and unanticipated consequences in the new venture creation process," Journal of Business Venturing, Elsevier, vol. 34(1), pages 23-40.
    21. Nadeera Ranabahu & Mary Barrett, 2020. "Does practice make micro-entrepreneurs perfect? An investigation of expertise acquisition using effectuation and causation," Small Business Economics, Springer, vol. 54(3), pages 883-905, March.
    22. Denis A. Grégoire & Naïma Cherchem, 2020. "A structured literature review and suggestions for future effectuation research," Small Business Economics, Springer, vol. 54(3), pages 621-639, March.
    23. Kerr, Jon & Coviello, Nicole, 2020. "Weaving network theory into effectuation: A multi-level reconceptualization of effectual dynamics," Journal of Business Venturing, Elsevier, vol. 35(2).

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