Effectuation - Liew Yen Thung

1. Can effectuation also be used in companies? Or it is useful only for entrepreneurship? 

Yes, effectuation can be used in companies. This is because companies will also be facing some circumstances where no sample case happened before (Morales, 2020). 

2. What is the key difference between effectuation and other approaches in entrepreneurship?

The key difference between effectuation and the other approaches depends on the goals or means. Effectuation depends on the means which the entrepreneurs work with what they have now while the other approaches depend on the goals where they start with their clear goals and then search for means to reach the goals (Morales, 2020). 

3. Are the effectual approach and the traditional (casual) approach mutually exclusive?

No, they are not. Instead, they may co-exist. This is because the decision-making depends on the situation happening. Thus, both are effective in different situations. 

4. Does effectuation mean: "not planning"?

I don’t think so. This is because resources are already there to be used in effectuation. In the other approach, they must build up the goals and means first then proceed to the next step. Thus, it is turning back to effectuation that uses the resources already to build up the goals. 

5. Are Effectuation and Lean Startup compatible?

Yes, they are compatible with each other. They share two concepts which are both did not do more planning due to the uncertainty faced and both did not expect the final version will come up from the beginning. Although both have common concepts, the difference between the two is effectuation is the entrepreneur whereas lean is an idea (Sebastiao, 2014). Yet, this perfectly makes both approaches compatible. 

 

Morales, Dr. C. (2020). Effectuation in five questions. LinkedIn. https://www.linkedin.com/pulse/effectuation-five-questions-dr-carlos-morales/ 

Sebastiao, H. (2014). How effectuation + lean startup = Lean Entrepreneurial Thinking & Acting (leta). LinkedIn. https://www.linkedin.com/pulse/20140612225801-11777433-how-effectuation-lean-startup-lean-entrepreneurial-thinking-acting-leta/