Title: Effectuation: Elements of Entrepreneurial Expertise
Author:Saras D. Sarasvathy
Publisher: Edward Elgar Publishing Limited
ISBN: 978 1 84376 680 3Number of Pages: 373
Key words: Entrepreneurship; Expertise; Effectuation; Causation; Uncertainty; Decision-Making; Protocol Analysis.
What makes entrepreneurs entrepreneurial? Is there such a think as entrepreneurial thinking? If there is, is it applicable only to entrepreneurs? How is it different from the thinking process of managers? These are the questions that Dr. Sarasvathy addresses in her book Effectuation: Elements of Entrepreneurial Expertise. The book is based on extensive research she carried out under the supervision of the Noble Prize winning professor Herbert A. Simon. It also covers topics related to entrepreneurship, entrepreneurial thinking and new venture creations.
The book is divided into four parts: In the first part of the book Dr. Sarasvathy discusses empirical journey of entrepreneurial expertise. The second part is dedicated to the theoretical journey of effectuation,. Part three covers the topic of competitive advantage and entrepreneurial opportunities, and the last part covers the recommendations and suggestions to future researchers, not only in the field of entrepreneurship, but also to those in the fields of behavioral and evolutionary economics, cognitive science and management.
The objective of this paper is to review the Dr. Sarasvathy's book. Therefore, the focus will be on three specific points:
(1) The main thesis of the book.
(2) The empirical and theoretical journey including the key strengths and weaknesses of the findings of the research.
(3) From an entrepreneurship student prospective, what makes this book a valuable and insightful choice?
To start, D. Sarasvathy doesn't present a complicated thesis in Effectuation: Elements of Entrepreneurial Expertise. The main concept tries to answer the question, "what makes the entrepreneur entrepreneurial?". According to her results, entrepreneurs aren't different from anyone else: they simply adopt a different approach to problem solving. By interviewing 27 entrepreneurs all over the world, using protocol analysis methods as well as other independent studies, D. Sarasvathy was able to theorise the following concepts:
1) Causal vs. Effectual Thinking.
2) The Effectuation Process
3) Principles of Effectuation.
The subject of entrepreneurship and entrepreneurship education is one of the recent notions in business. Thus, the biggest value and forte of this book, in my opinion, is that its author was able to address this subject with a fresh and new approach, providing precise explanations and specific examples to explicitly and successfully get her point across to the reader.