Effectual and Causal Decision Making: Shifts in Product Development Cycle

Understanding the conditions under which entrepreneurs or decision makers, in general, transition from effectual to causal decision making approaches and vice versa during the life of a newventure is a fertile avenue for future research in effectuation theory (Read, Sarasvathy, Dew, &Wiltbank, 2016).Based on an ethnographic study of new product development (NPD) in a socialenterprise, I hypothesize that the transition occurs not only becauseentrepreneurs made calculative decisions to obtain material resources, but doso in order to acquire symbolic resources (legitimacy). This project is in itsearly stages. Data analysis, data reduction, and theoretical refinement arestill ongoing. However, I present the results of a thick description coveringover two years of NPD showing the switch from effectual to causal decisionmaking as the venture’s founders cope with product-related, market andlegitimacy demands.