Get it Together! Synergistic Effects of Causal and Effectual Decision–Making Logics on Venture Performance

Abstract

Entrepreneurs rely on different decision–making logics when starting new ventures, including causal and effectual reasoning. Extant research suggests that venture performance is positively associated with both causal business planning and effectual action–orientation, but studies have not yet tested the synergistic potential of these two logics. We contribute to the debate on entrepreneurial decision making by exploring the interrelationship between causation and effectuation, detailing their main and interactive effects on venture performance. Using survey data collected on 1,453 entrepreneurs residing in 25 countries, we find that ventures benefit from using these two entrepreneurial logics in tandem.