Framework
Causation and effectuation
The question it answers
A first-time founder with an idea and little capital: do you fix the goal and then look for resources, or start from who you are, what you know and whom you know, and see what you can build?
- Origin
- Sarasvathy, 2001
- Diagram type
- Comparison table
- Level of analysis
- Individual
Diagram
Causation and effectuation
| Criterion | Causation | Effectuation |
|---|---|---|
| Starting point | A given effect | A given set of means: who you are, what you know, whom you know |
| Choosing between | Means to create that effect | Possible effects that the means in hand can create |
| Selection criterion | Maximise expected return against a predetermined goal | Affordable loss or acceptable risk, judged against the means in hand |
Pitfalls
Pitfall
Treating the two as two types of person. Sarasvathy (2001) writes that causation and effectuation are both integral parts of human reasoning and can occur simultaneously, overlapping and intertwining across different decision contexts; she juxtaposes them as a dichotomy deliberately, to make the theory clearer.
Sources
References
Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.
- Sarasvathy, S.D. (2001) ‘Causation and effectuation: toward a theoretical shift from economic inevitability to entrepreneurial contingency’, Academy of Management Review, 26(2), pp. 243–263.doi:10.2307/259121Source page