University Entrepreneurial Environment as an Antecedent of
Causal and Effectual Reasoning of Student Entrepreneurs*
Galina Shirokova, St.Petersburg University Graduate School of
Management, Russia
Karina Bogatyreva, St.Petersburg University Graduate School of
Management, Russia
Tamara Galkina, Åbo Akademi University, Finland
SMS 2014 Conference
Madrid, September 20-23, 2014
*Research has been conducted with financial support from a Russian Science Foundation
grant (project No. 14-18-01093)
1
Research Motivation
Ø  Effectuation theory developed by Sarasvathy (2001) suggests new insights on
understanding entrepreneurial actions and logic of reasoning.
Ø Effectuation
as a means driven non-predictive logic of entrepreneurial reasoning is
an alternative to goal driven causal logic (Sarasvathy, 2001: 245).
Ø Being
a promising and fast-growing study area, effectuation is considered to be still
in infancy. The antecedents and different conditions of effectual behaviour of
entrepreneurs are understudied (Perry, Chandler & Markova, 2011; Svensrud &
Åsvoll, 2012).
Ø Effectuation
theory has been criticised because it was developed from research on
expert entrepreneurs, and so may be less representative of less experienced
entrepreneurs (Perry, Chandler & Markova, 2011).
Ø The
university infrastructure can provide a significant influence on their attitudes,
behaviors and decision making processes (e.g., Dey, 1997; Hastie, 2007; Politis et
al., 2012).
2
Research Question
•
What is the relationship between university entrepreneurial
environments, business experience and venture cognitive
logic of student entrepreneurs?
3
Theory and Research Hypotheses
Ø In
entrepreneurship education, experimentation with various forms of
experiential learning is widespread (e.g., Morris, Kuratko, and Cornwall,
2013), but traditional business planning activities are still embedded in
many curricula (Honig, 2004; Neck and Greene, 2011).
Ø The
decision to rely on effectuation is driven by both perceived uncertainty
and experience (Harms & Schiele, 2012).
Ø Student
entrepreneurs are characterized as being individuals with little, if
any, business knowledge (Nielsen & Lassen, 2012). Yet, there are students
possessing prior relevant business experience, who may have a richer
appreciation of internal issues and requirements during the start-up
process, and a better understanding of external resources and implications
of developments in the environment.
4
Theory and Research Hypotheses
Ø In
non-predictive environments, previous experience may help student
entrepreneurs develop an ability to make decisions based on it rather than on
textbook patterns. Hence, task-specific experience is a key antecedent to the
choice of either causation-based or effectuation-based logic (Harms and
Schiele, 2012).
Ø Experienced
entrepreneurs are more likely to use analogical rather than
analytical decision-making (Dew et al., 2009). Analogical reasoning is based on
finding associations based on knowledge generated from personal experience.
Н1a. In a favorable university entrepreneurial ecosystem student
entrepreneurs without previous professional experience related to their
business are more likely to rely on causal venture logic.
Н1b. In a favorable university entrepreneurial ecosystem student
entrepreneurs with previous professional experience related to their
business are more likely to rely on effectual venture logic.
5
Theory and Research Hypotheses
Ø Traditional
business education including entrepreneurship education is based on
conventional paradigm of business planning, market analysis and search and select
logic in opportunity identification process (e.g. Barringer & Ireland, 2010).
Ø Academic
start-ups relied much more on formal business planning in comparison
with start-ups not originating within the academic context (Roininen, 2006).
Ø On
the other hand, students with prior experience engaged in professional
relationships which helped create human capital by handing down the knowledge of
‘how to do business’ (Quan, 2012). Interactions with business professionals through
conversations and observing them at the work place helps students gain needed
knowledge on how to proceed when launching and running their own venture.
Ø H2a.
For student entrepreneurs without previous professional experience
related to their business, the number of entrepreneurship courses a student
has taken is positively associated with reliance on causal cognitive logic.
Н2b. For student entrepreneurs with previous professional experience related
to their business, the number of entrepreneurship courses a student has
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taken is positively associated with reliance on effectual cognitive logic.
Theory and Research Hypotheses
Ø Social
networks can have a strong influence on the individual desire to become an
entrepreneur and on the practical orientation of this desire (Davidsson & Honig, 2003;
Morales-Gualdron & Roig, 2005; De Clercq & Arenius, 2006; Sequeira, Mueller &
McGee, 2007).
Ø Entrepreneurial
network relations represent the starting point of effectual action by
constituting the “Who I know” part of the means set. They are also the necessary
condition for the effectual process to unfold because they underlie its second principle –
partnership and commitments instead of competitive analysis (Sarasvathy, 2001; Read et
al., 2009).
Ø At
the same time, several studies demonstrate that network relations do not differentiate
effectuation from causation, and both venture cognitive logics can be equally used
(Chandler et al., 2011; Geh, 2011).
Н3a. The level of networking and coaching offered through the university is
positively associated with the use of both causal and effectual cognitive logic by
student entrepreneurs without professional experience related to their business.
Н3a. The level of networking and coaching offered through the university is
positively associated with both causal and effectual cognitive logic used by
student entrepreneurs with professional experience related to their business.
7
Theoretical Framework
No experience
H1a
Causal
logic
H2a
H3a
Effectual
logic
H3a
Experience
Entrepreneurial
university
ecosystem
H1b
Effectual
logic
H2b
Number of
entrepreneurship
courses taken
Number of
networking and
coaching offerings
a student
participated in
University entrepreneurial
infrastructure
H3b
H3b
Causal
logic
8
Data Description
Ø  Data collected in the course of Global University Entrepreneurial
Spirit Students’ Survey (GUESSS) 2011 was used to perform the
analysis.
Ø In
2011, 26 countries took part in the survey with 489 universities
being involved. In the course of data collection, 1 374 678 students
were addressed. The eventual number of responses accounted for
93 265 giving a response rate of 6.3%.
Ø The
sample of students having participated in the survey is divided
into three categories: students with no intention to found their own
business, intentional founders and active founders.
Ø A
total of 2,324 respondents form the group of active founders (804
non-experienced entrepreneurs and 1520 experienced entrepreneurs).
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Measures
Ø Effectuation
is measured with the seven-point Likert scale proposed by
Chandler et al. (2009) including 4 dimensions (experimentation, affordable
loss, flexibility, and pre-commitments). It was operationalized as an unweight
sum index of the factor scores of the items following the logic of Harms &
Schiele (2012).
Ø Causation
is measured with the seven-point Likert scale proposed by
Chandler et al. (2009) and operationalized with the factor score of the items
following the logic of Harms and Schiele (2012).
Ø University
entrepreneurial ecosystem is measured with a seven-point
Likert scale comprising eight items proposed by Souitaris et al. (2007) and
used in the GUESSS questionnaire with own adaptations and extensions.
This variable was operationalized with an average score based on the opinion
of all respondents from a given university.
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Measures
Ø Entrepreneurship
courses are operationalized with the number of
entrepreneurship related courses taken by a student. The list of
entrepreneurship related courses includes Entrepreneurship in General,
Family Firms, Financing Entrepreneurial Ventures, Technology
Entrepreneurship, Social Entrepreneurship, Entrepreneurial Marketing,
Innovation and Idea Generation, Business Planning.
Networking and coaching offerings are operationalized with the number
of different kinds of offerings a student participated in. These include
workshops/networking with experienced entrepreneurs, contact platforms with
potential investors, business plan contests/workshops, mentoring and
coaching programs for entrepreneurs, contact points for entrepreneurial
issues.
Ø
Ø Student
business experience is operationalized with a dummy variable
coded with 1 if a student has previous professional experience related to his
or her business and 0 otherwise.
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Control variables
Ø  Student’s
age in years in 2011.
Ø  Student’s
gender coded as 1 if a student is female and 0 if a student is
male.
Ø  Education
field coded with 1 being Business and Management field and 0
otherwise.
Ø  University
base country development level coded with 1 being a
developed country and 0 being an emerging country.
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Summary of Regression Analysis (inexperienced student
entrepreneurs)
Effectuation
Causation
University entrepreneurial
ecosystem
Number of entrepreneurship
courses taken
Number of networking and
coaching offerings taken part in
Age
.113 (.039)**
.286 (.084)**
.025 (.024)
.019 (.051)
.090 (.036)**
.141 (.078)*
-.024 (.012)**
-.048 (.020)**
Gender
.104 (.093)
-.263 (.207)
Country
.252 (.120)**
.518 (.281)*
Education field
.131 (.090)
.148 (.186)
Constant
-.212 (.353)
-.416 (.624)
F-statistics
11.81***
8.32***
R-squared
.15
.14
Summary of Regression Analysis (experienced student
entrepreneurs)
Causation
Effectuation
University entrepreneurial
ecosystem
.118 (.03)***
.196 (.06)**
Number of entrepreneurship
courses taken
. 070 (.02)***
.085 (.04)**
Number of networking and
coaching offerings student takes
part in
. 028 (.02)
.111 (.06)*
Age
.011 (.008)
.021 (.015)
Gender
.072 (.084)
-.053 (.159)
Country
.445 (.088)***
.264 (.201)
Education field
.127 (.077)
.009 (.161)
Constant
-1.050***
-1.569**
F-statistics
14.40***
6.61***
R-squared
.13
.07
Findings
Ø Favorable
university entrepreneurial environments and students’
involvement in networking and coaching offerings are positively associated
with reliance on causal logic by inexperienced student entrepreneurs.
Ø In
the group of experienced student entrepreneurs, a favorable university
entrepreneurial ecosystem, student participation in entrepreneurship
courses, and their involvement in networking and coaching offerings are
positively related to the proclivity towards effectual behavior.
Ø A
generally favorable university entrepreneurial climate has a positive
association with causal and effectual entrepreneurial logic with both
experienced and inexperienced students.
15
Contribution
Ø Entrepreneurship
support in universities is not only associated with
the amount of student entrepreneurs but also with effectual or causal
logic they use.
Ø The
study extends effectuation theory empirical application on nonexpert student entrepreneurs. In particular context, non-expert
entrepreneurs may use effectual reasoning in entrepreneurial decision
making process.
Ø Some
contingent factors per se are not necessarily the significant
antecedents in entrepreneurial decision-making process; however, they
may become significant once student entrepreneurs gain
entrepreneurial or business experience.
Ø Causation
and effectuation are orthogonal constructs, and they are
constantly intertwined and can unfold simultaneously
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Thank you for your attention!
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