Volume 14 Issue 1 2018


Subeika Rizvi
Subeika Rizvi is an Assistant Professor at SZABIST, Karachi.

Shahid Querishi
Assistant Professor at IBA, Karachi.

Assistant Professor, IoBM.

Muhammad Ali Saeed
Assistant Professor, Bahira University.

Abstract During the start of the venture, entrepreneurs rely on several techniques and strategies to make decisions. Effectuation and causation are important modes of this decision-making process. The theory on effectuation is advancing from an early to a mature phase globally thus it’s important to understand its dimensions and their influence on the firm’s performance. This study explores the use of this effective logic in micro and small firms operating in Pakistan and its influence on the financial performance and level of innovation in these firms. Although few types of research have been focused on the antecedents and dependents of effectuation none have arrived at a consensus on the appropriate variables. In Pakistan, as it’s a relatively new concept although being applied, there is all the more need to assess the nature of effect these variables could have on some of the important outcomes of the firm. This research contributes to the existing literature by providing a relationship of effectuation with, another important, variable of innovation in the firm. In this empirical study, a sample of 166 micro and small firm entrepreneurs has used all operating businesses within Pakistan. A survey, through a questionnaire, was conducted using snowball sampling. Findings indicate that the use of effectuation is positively correlated with both higher perceived financial performance and level of innovation employed in the firms. Also, not all effectual constructs have a uniform influence on the variables which explains the formative nature of the logic of effectuation. A few implications of this study and future research areas have also been identified.
Keywords Effectuation, firm performance, innovation
Year 2018
Volume 14
Issue 1
Type Short Report
Recognized by Higher Education Commission of Pakistan, HEC
Category "Y"
Journal Name IBT Journal of Business Studies
Publisher Name ILMA University
Jel Classification L26, G00, G29, O32, Q55
ISSN no (E, Electronic) 2409-6520
ISSN no (P, Print) 2416-8393
Country Pakistan
City Karachi
Institution Type University
Journal Type Open Access
Type of Review Double Blind Peer Reviewed
Format PDF
Paper Link
Page 10-22
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