Effectuation & newness : an intertwined relationship?

Principal topic: Effectuation theory suggests that entrepreneurs develop their new ventures in an iterative way by selecting possibilities through flexibility and interactions with the market; a focus on affordability of loss rather than maximal return on the capital invested, and the development of pre-commitments and alliances from stakeholders (Sarasvathy, 2001, 2008; Sarasvathy et al., 2005, 2006). In contrast, causation may be described as a rationalistic 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. However, little is known about the consequences of following either of these two processes. One aspect that remains unclear is the relationship between newness and effectuation. On one hand it can be argued that the combination of a means-centered, interactive (through pre-commitments and alliances with stakeholders from the early phases of the venture creation) and open-minded process (through flexibility of exploiting contingencies) should encourage and facilitate the development of innovative solutions. On the other hand, having a close relationship with their “future first customers” and focussing too much on the resources and knowledge already within the firm may be a constraint that is not conducive to innovation, or at least not to a radical innovation. While it has been suggested that effectuation strategy is more likely to be used by innovative entrepreneurs (Sarasvathy, 2001), this hypothesis has not been demonstrated yet (Sarasvathy, 2001). Method: In our attempt to capture newness in its different aspects we have considered the following four domains where newness may happen: new product/service; new method for promotion and sales; new production methods/sourcing; market creation. We identified how effectuation may be differently associated with these four domains of newness. To test our four sets of hypotheses a dataset of 1329 firms (702 nascent and 627 young firms) randomly selected in Australia was examined through ANOVA Tukey HSD Test. Results and Implications: Results indicate the existence of a curvilinear relationship between effectuation and newness where low and high levels of newness are associated with low level of effectuation while medium level of newness is associated with high level of effectuation. Implications for academia, practitioners and policy makers are also discussed.

Asset specificity and behavioural uncertainty as moderators of the sales growth : employment growth relationship in emerging ventures

Sales growth and employment growth are the two most widely used growth indicators for new ventures; yet, sales growth and employment growth are not interchangeable measures of new venture growth. Rather, they are related, but somewhat independent constructs that respond differently to a variety of criteria. Most of the literature treats this as a methodological technicality. However, sales growth with or without accompanying employment growth has very different implications for managers and policy makers. A better understanding of what drives these different growth metrics has the potential to lead to better decision making. To improve that understanding we apply transaction cost economics reasoning to predict when sales growth will be or will not be accompanied by employment growth. Our results indicate that our predictions are borne out consistently in resource-constrained contexts but not in resource-munificent contexts.

The research pathway to developing a health promotion intervention for the high school curriculum

Introduction: Schools provide the opportunity to reach a large number of adolescents in a systematic way however there are increasing demands on curriculum providing challenges for health promotion activities. This paper will describe the research processes and strategies used to design an injury prevention program.----- Methods: A multi-stage process of data collection included: (1) Surveys on injury-risk behaviours to identify targets of change (examining behaviour and risk/ protective factors among more than 4000 adolescents); (2) Focus groups (n= 30 high-risk adolescents) to understand and determine risk situations; (3) Hospital emergency outpatients survey to understand injury types/ situations; (4) Workshop (n= 50 teachers/ administrators) to understand the target curriculum and experiences with injury-risk behaviours; (5) Additional focus groups (students and teachers) regarding draft material and processes.----- Results: Summaries of findings from each stage are presented particularly demonstrating the design process. The baseline data identified target risk and protective factors. The following qualitative study provided detail about content and context and with the hospital findings assisted in developing ways to ensure relevance and meaning (e.g. identifying high risk situations and providing insights into language, culture and development). School staff identified links to school processes with final data providing feedback on curriculum fit, feasibility and appropriateness of resources. The data were integrated into a program which demonstrated reduced injury.----- Conclusions: A comprehensive research process is required to develop an informed and effective intervention. The next stage of a cluster randomised control trial is a major task and justifies the intensive and comprehensive development.

Email advertising : exploratory insights from Finland

Since the advent of the internet, much speculation has ensued regarding its tangible benefits to business. This article looks at the effectiveness of email advertising to promote information to consumers. Within this email promotion context, and using data from a survey of 838 female Finnish consumers of a major international cosmetics brand, we investigate consumer perceptions of email advertising. Specifically, within an exploratory research context we address two research questions: (1) What email advertising factors may influence visits to the company website? and (2) What email advertising factors may influence visits to a physical (i.e., bricks-and-mortar) company sales outlet? Results suggest that email advertisers should strive to generate emails that are perceived as useful. Useful emails appear to influence consumers to visit the store primarily to either buy the product or view the product firsthand, rather than visit the company website. However, as consumers could not buy the advertised products from the website, these findings should be regarded as preliminary. Factors influencing perceptions of email advertising usefulness are explored along with limitations and future research directions.

Residential sales by auction : a property type or geographic consideration

The sale of residential property by auction is a preferred sale method by real estate agents, but not always preferred by some vendors and most residential property buyers. In many residential property markets, the performance and measure of residential property market activity is based on the number of properties offered for sale by auction, auction clearance rates and the number of properties sold prior to auction. However, in many specific residential property markets, sale by auction may not be the preferred or supported method of sale. This paper will review the type of residential property sale within the Sydney residential property market and track the auction sales and clearance rates for Sydney over the past 5 months and compare these results in relation to clearance rates, passed in sales, and properties sold prior to auction This will provide a breakdown of real estate agency sale practice over a large metropolitan region to determine the impact of geographic location and socio-economic factors on the auction of residential property. In addition the paper will analyse the weekly auction sales in the Sydney residential property market to determine what areas of Sydney have the greatest number of house auctions and the performance of the auctions in relation location and socio economic factors.

Real estate agency practice and profitability : an analysis of house sales and agency profitability in Sydney

Large cities provide a broad range of residential property types, as well as a range of socio-economic locations. This results in a significant variation in residential property prices across both the city itself and the individual suburbs. The only constant across such a diverse range of residential property is the need for the majority of residential property owners to employ the services of a real estate agent to sell their property or to purchase a residential property. This paper will analyse the Sydney residential property market over the period 1994 to 2002 to determine the change in real estate offices numbers over the period, the profitability of real estate agency offices based on the residential house price performance of houses and units in these specific locations and the extent of changing residential house prices on agency profitability. Suburbs have been selected to provide a full range of housing types, socio-economic areas, older established and developing residential suburbs and location from the