Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices
Author
Dew, Nicholas
Read, Stuart
Sarasvathy, Saras D.
Wiltbank, Robert
Date
2009Metadata
Show full item recordAbstract
In support of theory, this study demonstrates that entrepreneurial experts frame decisions using an “effectual” logic (identify more
potential markets, focus more on building the venture as a whole, pay less attention to predictive information, worry more about making
do with resources on hand to invest only what they could afford to lose, and emphasize stitching together networks of partnerships); while
novices use a “predictive frame” and tend to “go by the textbook.”We asked 27 expert entrepreneurs and 37MBAstudents to think aloud
continuously as they solved typical decision-making problems in creating a new venture. Transcriptions were analyzed using methods
from cognitive science. Results showed that expert entrepreneurs framed problems in a dramatically different way than MBA students.
Description
The article of record as published may be found at http://dx.doi.org/10.1016/j.jbusvent.2008.02.002