Together or separately? Direct and synergistic effects of Effectuation and Causation on innovation in technology-based SMEs

Abstract

Technology-based SMEs develop their activity in changing environments with strong competitive pressures. These conditions make them much more likely to innovate but also make the innovative process more challenging due to greater complexity of decisions about resources and establishment of actions to achieve favorable innovation results. Although prior studies have analyzed diverse factors that impact the innovative dynamics of this type of firm, little advance has been made in exploring the problem from the perspective of decision-making. This study seeks to close this research gap using Effectuation Theory, one of the most-cited theories emerging in the field of entrepreneurship. More specifically, we analyze the use of causal and effectual decision-making logics to evaluate their direct and ambidextrous effects on innovation in technology-based SMEs. Our results provide evidence that not just one path, but rather a pool of alternatives, supports product and process innovation development. More specifically, when technology SMEs pursue product innovation, both effectuation and causation can be used as predominant mechanisms to achieve positive innovation results. If firms also seek to develop process innovations, however, they may obtain better results with an ambidextrous approach.

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Fig. 1

Notes

  1. 1.

    SABI stores economic, financial, operating, human resources, property, and management information on over a million Spanish firms.

  2. 2.

    Computer-assisted telephone interview (CATI) is a survey technique in which interviewers follow script provided by a software application. The software personalizes questionnaire flows based on responses or on information previously collected on the respondent.

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Acknowledgements

This research was supported by the Spanish Ministry of Economy, Industry, and Competitiveness (Ref.: ECO2016-80677-R) and European Union (FEDER Grant).

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Correspondence to Jessica Alzamora-Ruiz.

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Alzamora-Ruiz, J., del Mar Fuentes-Fuentes, M. & Martinez-Fiestas, M. Together or separately? Direct and synergistic effects of Effectuation and Causation on innovation in technology-based SMEs. Int Entrep Manag J (2021). https://doi.org/10.1007/s11365-021-00743-9

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Keywords

  • Effectuation
  • Causation
  • Innovation
  • Entrepreneurship
  • Technology-based SMEs
  • Decision-making logics