Open AccessEffectual Reasoning and Causal Reasoning in Creating New Businesses: A Case Study
Author(s) -
Juan Miguel Rosa González,
Miguel Eduardo Moreno Añez,
Helena Machado
Publication year - 2011
Publication title -
revista ibero-americana de estratégia
Language(s) - English
Resource type - Journals
ISSN - 2176-0756
DOI - 10.5585/ijsm.v10i2.1718
Subject(s) - perspective (graphical) , order (exchange) , phenomenon , entrepreneurship , process (computing) , subject (documents) , knowledge management , business , process management , management science , computer science , sociology , economics , epistemology , artificial intelligence , philosophy , finance , library science , operating system
This article focuses on the process of new business creation, considering the effectuation approach, which explains the phenomenon of entrepreneurship in a different perspective than the traditional causal approach. Beginning with a description of the effectual approach assumptions, a case study about the subject is presented in order to explore the logic of the business creation process. The case discusses a Brazilian organization created in 1980 to produce materials and services in steel industry. Through structured interview with the entrepreneur who idealized the business, the main events in the early stages of the project are described. The results show the relationship between entrepreneur’s means available at the time of the enterprise creation and the new business design. In addition, the entrepreneur preferred a strategy of drawing instead of a decision one, and gave priority to strategic partnerships as a substitute of formal market research. All these aspects are covered by the effectual approach.