Do strategy choices matter for nascent firms? A study on effectuation and causation impacts on new ventures outcomes

Principal Topic : Nascent entrepreneurship has drawn the attention of scholars in the last few years (Davidsson, 2006, Wagner, 2004). However, most studies have asked why firms are created focussing on questions such as what are the characteristics (Delmar and Davidsson, 2000) and motivations (Carter, Gartner, Shaver & Reynolds, 2004) of nascent entrepreneurs, or what are the success factors in venture creation (Davidsson & Honig; 2003; Delmar and Shane, 2004). In contrast, the question of how companies emerge is still in its infancy. On a theoretical side, effectuation, developed by Sarasvathy (2001) offers one view of the strategies that may be at work during the venture creation process. Causation, the theorized inverse to effectuation, may be described as a rational reasoning method to create a company. After a comprehensive market analysis to discover opportunities, the entrepreneur will select the alternative with the higher expected return and implement it through the use of a business plan. In contrast, effectuation suggests that the future entrepreneur will develop her new venture in a more iterative way by selecting possibilities through flexibility and interaction with the market, affordability of loss of resources and time invested, development of pre-commitments and alliances from stakeholders. Another contrasting point is that causation is ''goal driven'' while an effectual approach is ''mean driven'' (Sarasvathy, 2001) One of the predictions of effectuation theory is effectuation is more likely to be used by entrepreneurs early in the venture creation process (Sarasvathy, 2001). However, this temporal aspect and the impact of the effectuation strategy on the venture outcomes has so far not been systematically and empirically tested on large samples. The reason behind this research gap is twofold. Firstly, few studies collect longitudinal data on emerging ventures at an early enough stage of development to avoid severe survivor bias. Second, the studies that collect such data have not included validated measures of effectuation. The research we are conducting attempts to partially fill this gap by combining an empirical investigation on a large sample of nascent and young firms with the effectuation/causation continuum as a basis (Sarasvathy, 2001). The objectives are to understand the strategies used by the firms during the creation process and measure their impacts on the firm outcomes. Methodology/Key Propositions : This study draws its data from the first wave of the CAUSEE project where 28,383 Australian households were randomly contacted by phone using a specific methodology to capture emerging firms (Davidsson, Steffens, Gordon, Reynolds, 2008). This screening led to the identification of 594 nascent ventures (i.e., firms that are not operating yet) and 514 young firms (i.e., firms that have started operating from 2004) that were willing to participate in the study. Comprehensive phone interviews were conducted with these 1108 ventures. In a likewise comprehensive follow-up 12 months later, 80% of the eligible cases completed the interview. The questionnaire contains specific sections designed to distinguish effectual and causal processes, innovation, gestation activities, business idea changes and ventures outcomes. The effectuation questions are based on the components of effectuation strategy as described by Sarasvathy (2001) namely: flexibility, affordable loss and pre-commitment from stakeholders. Results from two rounds of pre-testing informed the design of the instrument included in the main survey. The first two waves of data have will be used to test and compare the use of effectuation in the venture creation process. To increase the robustness of the results, temporal use of effectuation will be tested both directly and indirectly. 1. By comparing the use of effectuation in nascent and young firms from wave 1 to 2, we will be able to find out how effectuation is affected by time over a 12-month duration and if the stage of venture development has an impact on its use. 2. By comparing nascent ventures early in the creation process versus nascent ventures late in the creation process. Early versus late can be determined with the help of time-stamped gestation activity questions included in the survey. This will help us to determine the change on a small time scale during the creation phase of the venture. 3. By comparing nascent firms to young (already operational) firms. 4. By comparing young firms becoming operational in 2006 with those first becoming operational in 2004. Results and Implications : Wave 1 and 2 data have been completed and wave 2 is currently being checked and 'cleaned'. Analysis work will commence in September, 2009. This paper is expected to contribute to the body of knowledge on effectuation by measuring quantitatively its use and impact on nascent and young firms activities at different stages of their development. In addition, this study will also increase the understanding of the venture creation process by comparing over time nascent and young firms from a large sample of randomly selected ventures. We acknowledge the results from this study will be preliminary and will have to be interpreted with caution as the changes identified may be due to several factors and may not only be attributed to the use/not use of effectuation. Meanwhile, we believe that this study is important to the field of entrepreneurship as it provides some much needed insights on the processes used by nascent and young firms during their creation and early operating stages.

Corporate governance for Hong Kong : conceptualizing an 'Asianized' framework

Hong Kong is a thriving cosmopolitan business capital in Asia where much of its values are shaped by both pragmatism and its Chinese heritage. Against this backdrop, Hong Kong's corporate law and governance principles are mostly British, much of which remains quite alien to the local business community. Like may other countries, Hong Kong is obligated by international markets to embrace these requirements. Yet many business operators lack even the understanding of basic company law and governance expectations, partly because the provisions are incompatible with their values and corporate cultures. The paper will argue that Confucian philosophies should be the basis for developing a corporate governance framework for Hong Kong, given that Confucius; doctrines are already entrenched in the island's traditions and identity.

Regulatory multiplicities in telecommunications reforms in Indonesia and China

Telecommunications is a key component in any country's economic infrastructure, requiring a vast amount of capital injection and ongoing technical support and innovation. Many developing countries experience handicaps in accessing capital and sustaining the required technical capability in their industralisation process. Therefore, attracting both capital investments and expertise by attuning the developing country's economic policies and legal environment to meet investors' expectations is a priority. Privatisation has been seen as a triumph by international institutions such as the World Bank, and a major requirement for developing economies to industrialise. However from a regulatory perspective, this process is far from straightforward. Implementing economic policies requires a number of regulations and regulatory instruments to be in place. Apart from the need for an independent regulator, regulatory outcomes are often dependent on the willingness of various stakeholders to comply with the course of actions undertaken by authorities. This article examines the factors steering the processes and changes in the telecommunication reforms of Indonesia and China.

Understanding parental physical activity : meanings, habits, and social role influence

Objectives: The research aimed to explore parents’ understandings of physical activity (PA), patterns of PA-related behaviour, and how constructions of social role expectations might influence their PA behaviour. Design and Method: Using a qualitative descriptive design and adopting a social constructionism approach to broaden interpretations of parents’ understandings, 40 adults (21 mothers, 19 fathers; aged 23 to 49 years) living in South East Queensland, Australia participated in semi-structured individual and group interviews. The interviews were analysed using thematic analysis. Results: Parents had clear understandings of what constitutes PA and engaged in various activities which were integrated with or independent of the children. Being active with children, however, was not always constructed favourably in which many parents described the difficulties of being active with their children. All individuals experienced changes in their PA behaviours after having children. For most, a decline in PA level, intensity, and structure was experienced; however, some did experience parenthood as a time to be active. A level of acceptance for the lack of activity performed was also expressed as were feelings of resentment and envy for those who maintained previous activity habits. Parenting and partner roles were considered most influential on PA-related behaviour and were constructed in ways that had both positive and negative influences on activity performance. Parents, however, were empowered to construct strategies to resolve conflicts between social role performance and being active. Conclusion: Results show that parents experience unique difficulties that intervention work should consider when designing programs aimed at increasing parental PA.

Preventing sexual violence?

This article critically assesses the main social policy responses to preventing rape following much feminist struggle to make sexual violence a public matter of legitimate concern. It considers the preventative potential of legal measures, anti-violence campaigns waged by feminist and men's groups in the US and Australia, public education campaigns in Schools and Universities, and public awareness campaigns sponsored by the state.We argue that sexual violence is not amenable to quick fix strategies that place responsibility for prevention entirely on individual men or women. While we recognise that responsibilising victims and individualising offenders is consistent with wider global shifts in social policy calling upon individuals to manage their own risk, we argue that the increasing reliance on such neo-liberal social policy is especially problematic in preventing rape. The paper suggests ways to resist this which place greater emphasis on the promotion of sexual ethics; the eroticisation of consent; the reinvention of the norms of romance to include both these, and the complete separation of the psycho-social-symbolic connections between sex and violence, and ultimately the re-evaluation of the cultural expectations of masculinity and femininity.

Evolutionary algorithms for sustainable building design

This approach to sustainable design explores the possibility of creating an architectural design process which can iteratively produce optimised and sustainable design solutions. Driven by an evolution process based on genetic algorithms, the system allows the designer to “design the building design generator” rather than to “designs the building”. The design concept is abstracted into a digital design schema, which allows transfer of the human creative vision into the rational language of a computer. The schema is then elaborated into the use of genetic algorithms to evolve innovative, performative and sustainable design solutions. The prioritisation of the project’s constraints and the subsequent design solutions synthesised during design generation are expected to resolve most of the major conflicts in the evaluation and optimisation phases. Mosques are used as the example building typology to ground the research activity. The spatial organisations of various mosque typologies are graphically represented by adjacency constraints between spaces. Each configuration is represented by a planar graph which is then translated into a non-orthogonal dual graph and fed into the genetic algorithm system with fixed constraints and expected performance criteria set to govern evolution. The resultant Hierarchical Evolutionary Algorithmic Design System is developed by linking the evaluation process with environmental assessment tools to rank the candidate designs. The proposed system generates the concept, the seed, and the schema, and has environmental performance as one of the main criteria in driving optimisation.

Defining the public values in airport development decision-making

Residents, businesses, local, state and national government stakeholders all want to have their say when airports expand or develop. While stakeholder engagement is increasingly a strategy employed for managing the tensions attracted to airport development, different stakeholders have different expectations and demands of airports. This requires different approaches to stakeholder engagement. Identifying the public values that are at stake in developing airports provides an initial step towards building a platform for selecting and applying stakeholder engagement strategies in airport and more general infrastructure contexts. -------- This paper uses the existing literature of public values to build a general typology of public values for the stakeholders of airport development. A range of semi-privatised and state owned airport case studies from Europe have been used to demonstrate the universal nature of the identified values. The result is a framework that identifies both the substantive and procedural values, separated into local, state/regional and national levels of interest. The typology provides a generalised view of public values in airport development; however, the public values identified may be limited to more western oriented societies due to the skew of airport cases reviewed. --------- Contributions are made to the literature with a typology of public values derived from existing knowledge and explored using empirical case examples. The provided typology enables research of airport development decision-making to delineate public values both within and between stakeholder groups, and helps to explain the different perspectives that stakeholders have towards airport development. Future research may focus on refining the typology for different types of airport governance structures, such as differences between public values in state and market-led airport development; include more airport cases from eastern societies to draw parallels or differences between western and eastern societies; or utilise the typology as a framework for analysing changes in public values of airports over time.

Behavioural biases and information disclosure laws relating to residential property sales : narrowing the gap between existing laws and calls for future reforms

Market failures involving the sale of complex merchandise, such as residential property, financial products and credit, have principally been attributed to information asymmetries. Existing legislative and regulatory responses were developed having regard to consumer protection policies based on traditional economic theories that focus on the notion of the ‘rational consumer’. Governmental responses therefore seek to impose disclosure obligations on sellers of complex goods or products to ensure that consumers have sufficient information upon which to make a decision. Emergent research, based on behavioural economics, challenges traditional ideas and instead focuses on the actual behaviour of consumers. This approach suggests that consumers as a whole do not necessarily benefit from mandatory disclosure because some, if not most, consumers do not pay attention to the disclosed information before they make a decision to purchase. The need for consumer policies to take consumer characteristics and behaviour into account is being increasingly recognised by governments, and most recently in the policy framework suggested by the Australian Productivity Commission

Rethinking genre studies through distribution analysis : issues in international horror movie circuits

The existence of any film genre depends on the effective operation of distribution networks. Contingencies of distribution play an important role in determining the content of individual texts and the characteristics of film genres; they enable new genres to emerge at the same time as they impose limits on generic change. This article sets out an alternative way of doing genre studies, based on an analysis of distributive circuits rather than film texts or generic categories. Our objective is to provide a conceptual framework that can account for the multiple ways in which distribution networks leave their traces on film texts and audience expectations, with specific reference to international horror networks, and to offer some preliminary suggestions as to how distribution analysis can be integrated into existing genre studies methodologies.

What causes childhood leukaemia? Some beliefs of parents of affected children

The theories of parents about the cause of their children's leukaemia have been documented in the course of a case-control study. From a sample of 175 children who were diagnosed as having acute lymphoblastic leukaemia, 91.4% of their parents put forward their theories. Some of these theories were related clearly to material that had been published and therefore had some scientific validity. Other theories often had no apparent scientific basis. Persons who are involved in the care of children with leukaemia should be aware of the wide variety of theories that are held by their parents so that they may provide counselling which could be of help in the relief of feelings of anxiety or guilt among the parents. Parents should always be afforded the opportunity to put forward their own theories so that they may be discussed on a rational basis. It is conceivable that some parents might put forward new hypotheses about leukaemogenesis that could be tested scientifically.

Reparations for Indigenous People: International and Comparative Perspectives

Published in concomitance with the adoption of the United Nations Declaration on the Rights of Indigenous Peoples, this volume brings together a group of renowned legal experts and activists from different parts of the world who, from international and comparative perspectives, investigate the right of indigenous peoples to reparation for breaches of their individual and collective rights. The first part of the book is devoted to general aspects of this important matter, providing a comprehensive assessment of the relevant international legal framework and including overviews of the topic of reparations for human rights violations, the status of indigenous peoples in international law, and the vision of reparations as conceived by the communities concerned. The second part embraces a comprehensive investigation of the relevant practice at the international, regional, and national level, examining the best practices of reparations according to the ideologies and expectations of indigenous peoples and offering a comparative perspective on the ways in which the right of these peoples to redress for the injuries suffered is realized worldwide. The global picture painted by these contributions provides a view of the status of relevant international law that is synthesized in the two final chapters of the book, which include a concrete example of how a judicial claim for reparation is to be structured and prescribes the best practices and strategies to be adopted in order to maximize the opportunities for indigenous peoples to obtain effective redress. As a whole, this volume offers a comprehensive vision of its subject matter in international and comparative law, with a practical approach aimed at supporting legal academics, administrators, and practitioners in improving the avenues and modalities of reparations for indigenous peoples