Every now and then one comes upon a genuinely new idea.Professor Saras Sarasvathy's idea of effectuation is one such.Effectuation is a refreshingly new look at the old phenomenon of entrepreneurship.Indeed, it is a wholly new way of looking at the world around us.After reading this book, you will never look at the world of entrepreneurship the same way again.Sarasvathy's work is based on a beautiful narrative, profound theory, a deep and visceral understanding of the entrepreneurship phenomenon, and everyday facts and events; and it is eminently practical -virtues that are bound to make it a classic in a short period.Core to effectuation is the idea that rather than discover and exploit opportunities that pre-exist in the world, the effectual entrepreneur is one who 'fabricates' opportunities from the mundane realities of her life and value systems.In the evocative phrase of Sarasvathy, entrepreneurs fabricate opportunities by starting with who they are, what they know, and whom they know -in short, all someone needs to create an entrepreneurial legacy in this world is to begin with their intellectual capital, human capital and social capital.At once liberating and practical, this simple idea forms the foundation for a beautiful theory of the 'made' world rather than the 'found' world that populates much of the textbooks and journal pages of the entrepreneurship literature.Significantly, she does not sell entrepreneurship short by interpreting it as a prosaic activity of starting a new business venture for a commercial activity.Rather, she breathtakingly announces that since all markets are ultimately markets in human hope, and since all economic value ultimately derives from human beings, any activity that involves the design and creation of products, services, institutions and other human artifacts that addresses this human hope and value falls within the sphere of effectual entrepreneurship.Central to Sarasvathy's effectuation are two building blocks: the science of the artificial (which, in the context of entrepreneurship, she re-labels science of the artefactual) and pragmatism.As she suggests, the study of entrepreneurship as an artefactual science allows us to ask design-oriented questions rather than 'why' questions or 'explain (immutable) dependence relationships' that are so characteristic of the natural sciences and even many social sciences that aim to mimic natural sciences.Thus, our focus shifts from asking, 'why

An effectual frame offers an artifactual view of the spaces within which organizations are conceptualized as operating in, thereby allowing us to see those spaces themselves as artifacts of a process that operates in a non-predictive, non-adaptive, and non-teleological manner. Put another way, an effectual process consists of individuals and organizations that work with things already within their control to proactively shape and co-create their environments and futures. An effectual model of organizational change would therefore examine and explain the co-creation of organizational spaces within temporal flows in which actions and interactions between stakeholders may offer kairotic stepping stones for time itself to be seen as a resource to be leveraged rather than a constraint to be overcome.

Suitable for MBA, EMBA, GEMBA, and executive education programs, this note sets the stage to unfold an analysis of popular notions about how the world works. On one hand, some believe that global competition has created a flattened world and that globalization has leveled the playing field. Yet a zest to view the world as flat, others have said, results in an underestimation of the differences between countries—standardization, exact replication, and scale expansion on a global basis could be problematic. In this note, we acknowledge that the flat world has some lumps, but regardless of whether the world is considered to be flat or round, there are certain implications on both sides that business leaders need to be aware of in order to create global efficiency. The note offers three practical examples that students can work through and apply their learning. Excerpt UVA-S-0191 Aug. 12, 2011 THE WORLD IS FLAT…THE WORLD IS LUMPY? Despite the seemingly fresh arrival of the term “globalization,” it is really nothing new. The drive to explore the unknown can be traced back to ancient civilizations and those brave souls who set out to explore the earth—mostly by sea. Trade followed, as did tariff duties. What has changed over the centuries is the amount of contact and the form of engagement. Much of the movement toward a global economy occurred during three different periods. The latter part of the 1800s to the mid-1900s generally marks what historians consider the first wave of globalization when trading goods expanded to investing capital and labor in foreign countries. Immediately following World War II, declining trade barriers between countries set off a second wave. And since 1980, economic policy reform, particularly among developing countries, as well as declining transportation costs and technology advancements allowed more countries to enter global markets and resulted in the third wave of globalization. At first, reaching outside of one's borders was limited to a few industries—mostly consumer-product-driven firms. Incentives included lower production costs, access to resources (either natural or knowledge and skills of local populations), growth into new markets, financial value, and/or a desire to be viewed as a local company as opposed to a foreign-owned one. By the year 2000, service industries started to appreciate the gains from going global. Transportation efficiencies allowed us to produce and deliver resources, products, and services around the world. And the meaning of globalization transformed well beyond the concept of international trade to include increasing worldwide connectivity, integration, and interdependence of cultural, ecological, governmental, high-tech, and social spheres. . . .

“Suitable for MBA, Executive MBA, GEMBA, and executive education programs, this case uses CEMEX, a global cement producer based in Mexico, to set the stage for unfolding an analysis of a growth through acquisition strategy. It offers a discussion about the firm's overall strategy to acquire on a global scale instead of growing organically and provides an opportunity to introduce basic financial, marketing, and operational terms that can be explored in subsequent classes. The material includes a PMI process that further allows discussion on that technique.The case opens with a conference call and another barrage of questions for CEO Lorenzo Zambrano about his bid to buy the Australia-based Rinker Group in October 2006. Until this point, CEMEX has had a long-standing habit of buying businesses in emerging markets; this acquisition would be a departure from that strategy. If the deal goes through, it would be the single largest acquisition in CEMEX's history, and it would be among its few forays into a developed market other than the neighboring United States. The company has grown exponentially and successfully. Why would this effort be any different? Was the acquisition a good idea or not? And if it was, how would Zambrano and his leadership team convince Wall Street and others of that?”

This case is used in the course elective "Strategic Post-Merger Integration," and in Darden's Global EMBA strategy course. Well suited for MBA, Executive MBA, GEMBA, and executive education programs, this case describes the circumstances at Leica Camera, the famed German manufacturer of high-end cameras, and allows for an analysis of the firm's competitive position. Although the company decides to stop production of its R-system camera and lenses, a backlash from users surfaces. That leaves the case open to exploring the uncertainty over achievable sales volume for the R-series lenses as well as where the company fits in the market as new and less-expensive competitor products gain popularity. The case provides an overview of the competitive style of major camera and lens manufacturers and allows a discussion of core capabilities of these competitors. What products would secure Leica's future? Was there development potential for a new universal system? The case describes an issue that many organizations face today—how to decide whether components are strategically critical. Excerpt UVA-S-0225 Rev. May 16, 2014 LEICA CAMERA: A “BOUTIQUE” FIRM FACES A WORLD OF CHANGE Leica must be kept from becoming a boutique firm for the nostalgically minded. —Dr. Josef Spichtig, Leica chairman, 2005 annual report Leica Camera AG CEO and principal owner Andreas Kaufmann was melancholy while strolling the floor of photokina—the world's largest photography industry trade fair. The biannual event took place in Cologne, Germany, less than 100 miles from Leica's headquarters in the small town of Solms. Being so close to home made Kaufmann feel more like a host than an attendee, and after having had another tough year in 2008, he did not relish the spotlight. Kaufmann had fired the previous CEO, Steven K. Lee (an American), a few months earlier after Lee's efforts to turn around the struggling company had rubbed longtime German employees the wrong way. . . .

This case is used in the course elective Strategic Post-Merger Integration, and in Darden's Global EMBA strategy course. Well suited for MBA, Executive MBA, GEMBA, and executive education programs, this case describes the circumstances at Leica Camera, the famed German manufacturer of high-end cameras, and allows for an analysis of the firm's competitive position. Although the company decides to stop production of its R-system camera and lenses, a backlash from users surfaces. That leaves the case open to exploring the uncertainty over achievable sales volume for the R-series lenses as well as where the company fits in the market as new and less-expensive competitor products gain popularity. The case provides an overview of the competitive style of major camera and lens manufacturers and allows a discussion of core capabilities of these competitors. What products would secure Leica's future? Was there development potential for a new universal system? The case describes an issue that many organizations face today—how to decide whether components are strategically critical. Excerpt UVA-S-0225 Rev. May 16, 2014 LEICA CAMERA: A “BOUTIQUE” FIRM FACES A WORLD OF CHANGE Leica must be kept from becoming a boutique firm for the nostalgically minded. —Dr. Josef Spichtig, Leica chairman, 2005 annual report Leica Camera AG CEO and principal owner Andreas Kaufmann was melancholy while strolling the floor of photokina—the world's largest photography industry trade fair. The biannual event took place in Cologne, Germany, less than 100 miles from Leica's headquarters in the small town of Solms. Being so close to home made Kaufmann feel more like a host than an attendee, and after having had another tough year in 2008, he did not relish the spotlight. Kaufmann had fired the previous CEO, Steven K. Lee (an American), a few months earlier after Lee's efforts to turn around the struggling company had rubbed longtime German employees the wrong way. . . .

This case is ideal for use in courses on innovation, entrepreneurship, corporate venturing, and strategy. It challenges students to think about the conditions necessary for creating a vibrant entrepreneurial culture and climate within a large firm as a newly appointed VP works to get a highly successful company to embrace entrepreneurship and innovation. The VP considers his central mission is creating a robust portfolio of new initiatives within the organization. After a year of such activities, all efforts have not shown good results. The case challenges students to think about the conditions necessary for creating a vibrant entrepreneurial culture and climate within a large firm. Ideal for use in courses on: Innovation, Entrepreneurship, Corporate Venturing, Strategy.

The case chronicles the development of Lumni, Inc., an international start-up offering innovative mechanisms for financing higher education. It focuses on: the details of decision making required to transform an idea into a viable business; building partnerships; the challenge associated with raising venture capital; and the challenges of creating a new market where human capital can be traded to finance higher education.

We study how ethical behaviour by firms leads to ethical reputation building. Based on our in-depth studies of two firms in India and Zimbabwe that resisted corruption and survived for extended time periods, we propose that in addition to behaving ethically, firms need to elicit favourable responses from a critical mass of stakeholders from both strong and weak tie networks in order for their ethical reputations to diffuse quickly and widely. We find that the strength of stakeholder responses to ethical behaviour is moderated by firm level and contextual factors: high status affiliations, industry characteristics, the nature of corruption resisted, the presence of a plural press, the potential for collective action, and the presence of an independent judiciary. These antecedents also influence the pattern of stakeholder resource commitments that firms are able to enjoy as a result of having built ethical reputations.

In environments with widespread corruption, most business leaders hesitate to take a firm stand against corruption. However, research conducted in Egypt, Zimbabwe, and India shows that organizations should view building a strong ethical reputation in such environments as an opportunity to differentiate themselves. To do this, companies can follow four steps. First, frame their ethical behavior in a way that resonates with as wide a network of stakeholders as possible. Second, understand that there are gradations of corruption. Third, acquire a fine-grained understanding of their stakeholders. Fourth, strategically build partnerships with high-status individuals and organizations, a tactic referred to as “reputation borrowing.”

With so much attention focused on small and medium-sized businesses (SMBs) and their critical importance to the revitalization of the economy, Professor Ed Hess has set out to debunk the myths of business growth and to set forth a research-based approach to SMB growth: growth can create value but if it is not properly managed it can destroy value. And in some cases, too much growth too fast can destroy a SMB business.

Entrepreneurship is concerned with how the opportunity to create “value” in society is discovered or imagined and acted upon thereby bringing new goods and services into the marketplace. The field of business ethics, on the other hand, is concerned with the fairness of methods used to create this “value,” and the ensuing distribution of the value among various stakeholders to the enterprise. Entrepreneurially introduced innovations can alter the economic, political, and social landscape. Entrepreneurs and entrepreneurship have the power to do immense good, but can also harm. However, the entrepreneurial process contains within itself the power to address the harm. Keywords: entrepreneur; market inefficiencies; new products and services; creativity; innovation

We build upon a recent stream of research that has proposed entrepreneurship as a solution to, rather than a cause of, environmental degradation. Our proposition is that under certain conditions entrepreneurs are likely to supplement, or surpass, the efforts of governments, NGOs and existing firms to achieve environmental sustainability. Entrepreneurs can contribute to solving environmental problems through helping extant institutions in achieving their goals and by creating new, more environmentally sustainable products, services and institutions. Our model illustrates how entrepreneurs 1) address environmental uncertainty, 2) provide innovation and 3) engage in resource allocation to address environmental degradation.

Social media engagement by business firms has been steadily on the rise, with its application extending to a range of corporate functions, beyond marketing and customer engagement, many of which can be construed as strategic. However, the potential influence of social media on strategy process or strategic decision making has scarcely been explored in strategic management literature. In addressing this gap, this paper conceptually explores the likely influence of social media on issue of strategic decision making and the mechanism of such influence, and also uses an assortment of anecdotes from practice for illustrative purposes. The authors suggest a plausible model whereby corporate social media engagement is seen to exert its influence through the three key dimensions of strategy process - environmental factors, strategists characteristics and decision issue characteristics. In particular social media engagement is conceived as ingraining knowledge creation and integration through socialization within an extended value network.

In this article we speak of roads taken and paths yet to be traversed. Over the past decade, entrepreneurship researchers have accumulated considerable work related to opportunities. Here we outline new possibilities opened up by that work and seek to recast entrepreneurship as a science of the artificial in three ways: understanding opportunities as made as well as found, moving beyond new combinations to transformations, and developing a new nexus around actions and interactions.

Inter-subjectivity is an important concept in the study of entrepreneurship for it addresses one of the central questions our field seeks to answer—how in the absence of current markets, future goods and services are brought into existence? We provide evidence of it in both historical and contemporary entrepreneurship thought and show how it allows entrepreneurs to overcome the dual problems of the dispersion of knowledge in society and uncertainty to create markets and engender value creation. We suggest the necessity for considering all three varieties of knowledge, the inter-subjective in addition to the subjective and the objective, and derive implications for research moving forward.

Academy of Management ReviewVol. 38, No. 1 DialogueOf Narratives and ArtifactsSankaran Venkataraman, Saras D. Sarasvathy, Nicholas Dew and William R. ForsterSankaran VenkataramanUniversity of Virginia, Saras D. SarasvathyUniversity of Virginia, Nicholas DewNaval Postgraduate School and William R. ForsterLehigh UniversityPublished Online:21 Jan 2014https://doi.org/10.5465/amr.2012.0096AboutSectionsView articleView Full TextPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail View articleREFERENCESAnsari S. L., Bell J., Lundblad H. 1991. Accounting in the defense of hegemony. Paper presented at the American Accounting Association annual meeting, Nashville, TN. Google ScholarAnsari S. L., Bell J., Lundblad H. 1992. Organization structure as ideology: The state socialism experiment. Journal of Management Inquiry, 1: 229–247. Google ScholarBrowne D. R. 1999. Electronic media and industrialized nations: A comparative study. 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Bakker and Greg Fisher14 January 2021 | Academy of Management Review, Vol. 46, No. 1Research Strategies for Organizational History: A Dialogue Between Historical Theory and Organization TheoryMichael Rowlinson, John Hassard and Stephanie Decker6 September 2014 | Academy of Management Review, Vol. 39, No. 3Portrait of an Entrepreneur: Vincent van Gogh, Steve Jobs, and the Entrepreneurial Imagination Van Gogh: The Life, by NaifehSteven and SmithGregory White. New York: Random House, 2011. Steve Jobs, by IsaacsonWalter. New York: Simon & Schuster, 2011.Joep P. Cornelissen11 October 2013 | Academy of Management Review, Vol. 38, No. 4 Vol. 38, No. 1 Permissions Metrics in the past 12 months History Published online 21 January 2014 Published in print 1 January 2013 Information© Academy of Management ReviewKeywordsEntrepreneurshipDecision Theory (Behavioral)New Venture StrategiesDownload PDF

In this essay, we outline the provocative argument that in the realm of human affairs there exists an “entrepreneurial method” analogous to the scientific method spelled out by Francis Bacon and others with regard to the natural realm. We then suggest a series of open questions that we believe will help future scholars spell out the contents of such a method and ways in which it can be put to work in the design and achievement of socioeconomic ends. At least one normative implication of accepting the argument would be to teach entrepreneurship not only to entrepreneurs but to everyone, as a necessary and useful skill and an important way of reasoning about the world.