Academic journal article Journal of Management and Organization

They Look While They Leap: Generative Co-Occurrence of Enactment and Effectuation in Entrepreneurial Action

Academic journal article Journal of Management and Organization

They Look While They Leap: Generative Co-Occurrence of Enactment and Effectuation in Entrepreneurial Action

Article excerpt

Introduction

Although entrepreneurial opportunity formation has been an area of intense interest in entrepreneurship research, it has recently been argued to be insufficient to understand the phenomenon of entrepreneurship. Venkataraman and Shane's proposition of defining entrepreneurship as a nexus of enterprising individuals and lucrative opportunities (Venkataraman, 1997; Shane & Venkataraman, 2000) had found agreement among several researchers. However, it has also raised a hot debate (de Koning, 2003; Alvarez & Barney, 2007, 2013; Alvarez, Barney, & Young, 2010; Wiklund, Davidsson, Audretsch, & Karlsson, 2011; Zahra & Wright, 2011). Recent discourse in the field has argued the opportunity construct as being controversial and elusive (Klein, 2008; Dimov, 2011; Shane, 2012; Eckhardt & Shane, 2013) and moved focus from examining entrepreneurship through the nature of opportunity that over-emphasised the individual entrepreneur to the exclusion of the environment (Dimov, 2007; McMullen, Plummer, & Acs, 2007), to exploring opportunity shaping as a process and entrepreneurial action as the focal concept (Aldrich, 2001; Ardichvili, Cardozo, & Ray, 2003; Holmquist, 2003; Dimov, 2007; Bhowmick, 2011; Venkataraman, Sarasvathy, Dew, & Forster, 2012; Alvarez, Barney, & Anderson, 2013; McMullen & Dimov, 2013). The phenomenon of entrepreneurship could therefore be gainfully examined through actions of the entrepreneur at their micro-foundations. It has also been emphasised that the micro-foundations of entrepreneurial action are relevant in the context in which the actions occur (Low & Abrahamson, 1997; de Koning, 2003; Welter, 2011; Zahra & Wright, 2011). Therefore, actions that entrepreneurs take towards shaping profitable outcomes within a market context seems the best way to understand how opportunities are shaped within that context. This paper does not debate the opportunity construct, but assumes, unarguably, that entrepreneurial action is inevitably made in pursuit of potentially profitable outcomes. Following Dimov's (2011) lament of the elusiveness of the opportunity construct and suggestion for empirical studies in entrepreneurial action instead, it focuses on the micro-foundations of entrepreneurial action in the context of high technology environment that is characterised by uncertainty and market volatility.

Following a conceptualisation of entrepreneurial opportunity as expressed in actions (Dimov, 2011), this paper tracks entrepreneurial action micro-foundations through the processes of effectuation and enactment. The concept of effectuation, propounded by Sarasvathy (2001, 2008), is a processual logic of what action steps an entrepreneur is found to take under uncertainty, how the entrepreneur controls resources while aligning likeminded others in the pursuit of opportunity. Enactment, drawn from Weick's sensemaking concept (Weick, 1979, 1995; Weick, Sutcliffe, & Obstfeld, 2005), on the other hand, lends a platform for understanding prospective action steps towards a preferred outcome that is only made sense of post facto . Effectuation may be described as led by actions to control the process of opportunity pursuit to the entrepreneur's advantage; enactment as the actor's initiative in a coming together without control of environmental factors, but made sense of retrospectively by the actor/entrepreneur. Therefore, it is argued that effectuation is ambiguity-mitigating action, whereas enactment is ambiguity-embracing action. This paper specifically draws out similarities and differences between the two, examining how a view of entrepreneurial enactment before sensemaking reconciles with entrepreneurial action that is driven by deliberate effectual control. Thus, it explores the dual nature of entrepreneurial action process: one, the entrepreneurial leap (Stevenson & Jarillo, 1990; Gartner, Carter, & Hills, 2003) into the market that has the potential of success as well as failure, and the other of the effectual, non-predictive control action of the entrepreneur that Sarasvathy and colleagues posit as being the expert entrepreneurs' preferred mode of action to start up a business (Sarasvathy, 2001, 2008; Dew, Read, Sarasvathy, & Wiltbank, 2009). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.