Effectuation theory, as one of the dominant theories in entrepreneurship, argues that when you cannot predict the future, control it
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Entrepreneurs or managers of small firms have to make difficult decisions under uncertainty, where they know nothing about the future. Under such uncertainty, should decision-makers do market research, industry analysis, or macro market edits to figure out where the future is heading? Do they have financial as well as other required resources to conduct such studies? Even if they can afford it, is there any guarantee that the results will be reliable? What if they exhaust their financial resources on market research and results suggest that no action should be taken until a new trend emerges? Should they stop there and wait for a new trend? Or should they be proactive and consider uncertainty as a source of new opportunities? If so, how would they exploit new opportunities? These are concerns that decision-makers, especially those of small businesses with limited resources, have to deal with.
[This article has been published with permission from IIM Bangalore. www.iimb.ac.in Views expressed are personal.]