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.

Virtual Environment Visualisation of Executable Business Process Models

Business Process Modelling is a fast growing field in business and information technology, which uses visual grammars to model and execute the processes within an organisation. However, many analysts present such models in a 2D static and iconic manner that is difficult to understand by many stakeholders. Difficulties in understanding such grammars can impede the improvement of processes within an enterprise due to communication problems. In this chapter we present a novel framework for intuitively visualising animated business process models in interactive Virtual Environments. We also show that virtual environment visualisations can be performed with present 2D business process modelling technology, thus providing a low barrier to entry for business process practitioners. Two case studies are presented from film production and healthcare domains that illustrate the ease with which these visualisations can be created. This approach can be generalised to other executable workflow systems, for any application domain being modelled.

Collaborative business process modeling using 3D virtual environments

Process modeling is a complex organizational task that requires many iterations and communication between the business analysts and the domain specialists involved in the process modeling. The challenge of process modeling is exacerbated, when the process of modeling has to be performed in a cross-organizational, distributed environment. Some systems have been developed to support collaborative process modeling, all of which use traditional 2D interfaces. We present an environment for collaborative process modeling, using 3D virtual environment technology. We make use of avatar instantiations of user ego centres, to allow for the spatial embodiment of the user with reference to the process model. We describe an innovative prototype collaborative process modeling approach, implemented as a modeling environment in Second Life. This approach leverages the use of virtual environments to provide user context for editing and collaborative exercises. We present a positive preliminary report on a case study, in which a test group modelled a business process using the system in Second Life.

On the cognitive effectiveness of routing symbols in process modeling languages

Process models provide visual support for analyzing and improving complex organizational processes. In this paper, we discuss differences of process modeling languages using cognitive effectiveness considerations, to make statements about the ease of use and quality of user experience. Aspects of cognitive effectiveness are of importance for learning a modeling language, creating models, and understanding models. We identify the criteria representational clarity, perceptual discriminability, perceptual immediacy, visual expressiveness, and graphic parsimony to compare and assess the cognitive effectiveness of different modeling languages. We apply these criteria in an analysis of the routing elements of UML Activity Diagrams, YAWL, BPMN, and EPCs, to uncover their relative strengths and weaknesses from a quality of user experience perspective. We draw conclusions that are relevant to the usability of these languages in business process modeling projects.

An Integrative framework of the factors affecting process model understanding : a learning perspective

Process models are used by information professionals to convey semantics about the business operations in a real world domain intended to be supported by an information system. The understandability of these models is vital to them actually being used. After all, what is not understood cannot be acted upon. Yet until now, understandability has primarily been defined as an intrinsic quality of the models themselves. Moreover, those studies that looked at understandability from a user perspective have mainly conceptualized users through rather arbitrary sets of variables. In this paper we advance an integrative framework to understand the role of the user in the process of understanding process models. Building on cognitive psychology, goal-setting theory and multimedia learning theory, we identify three stages of learning required to realize model understanding, these being Presage, Process, and Product. We define eight relevant user characteristics in the Presage stage of learning, three knowledge construction variables in the Process stage and three potential learning outcomes in the Product stage. To illustrate the benefits of the framework, we review existing process modeling work to identify where our framework can complement and extend existing studies.

On the usage of labels and icons in business process modeling

The value of business process models is dependent not only on the choice of graphical elements in the model, but also on their annotation with additional textual and graphical information. This research discusses the use of text and icons for labeling the graphical constructs in a process model. We use two established verb classification schemes to examine the choice of activity labels in process modeling practice. Based on our findings, we synthesize a set of twenty-five activity label categories. We propose a systematic approach for graphically representing these label categories through the use of graphical icons, such that the resulting process models are easier and more readily understandable by end users. Our findings contribute to an ongoing stream of research investigating the practice of process modeling and thereby contribute to the body of knowledge about conceptual modeling quality overall.

Sounds from the empty city : a practice-led case study in the confluence of music, narrative and emotion

The creative practice: the adaptation of picture book The Empty City (Megarrity/Oxlade, Hachette 2007) into an innovative, interdisciplinary performance for children which combines live performance, music, projected animation and performing objects. The researcher, in the combined roles of writer/composer proposes deliberate experiments in music, narrative and emotion in the various drafts of the adaptation, and tests them in process and performance product. A particular method of composing music for live performance is tested in against the emergent needs of a collaborative, intermedial process. The unpredictable site of research means that this project is both looking to address both pre-determined and emerging points of inquiry. This analysis (directed by audience reception) finds that critical incidents of intermediality between music, narrative, action and emotion translate directly into highlights of the performance.

The ability of economic thinking : the “nature” versus “nurture” debate

In their studies, Eley and Meyer (2004) and Meyer and Cleary (1998) found that there are sources of variation in the affective and process dimensions of learning in mathematics and clinical diagnosis specific to each of these disciplines. Meyer and Shanahan (2002) argue that: General purpose models of student learning that are transportable across different discipline contexts cannot, by definition, be sensitive to sources of variation that may be subject-specific (2002. p. 204). In other words, to explain the differences in learning approaches and outcomes in a particular discipline, there are discipline-specific factors, which cannot be uncovered in general educational research. Meyer and Shanahan (2002) argue for a need to "seek additional sources of variation that are perhaps conceptually unique ... within the discourse of particular disciplines" (p. 204). In this paper, the development of an economics-specific construct (called economic thinking ability) is reported. The construct aims to measure discipline-sited ability of students that has important influence on learning in economics. Using this construct, economic thinking abilities of introductory and intermediate level economics students were measured prior to the commencement, and at the end, of their study over one semester. This enabled factors associated with students' pre-course economic thinking ability and their development in economic thinking ability to be investigated. The empirical findings will address the 'nature' versus 'nurture' debate in economics education (Frank, et aI., 1993; Frey et al., 1993; Haucap and Tobias 2003). The implications for future research in economics education will also be discussed.

Modelling the process of learning in economics

Student learning research literature has shown that students' learning approaches are influenced by the learning context (Evans, Kirby, & Fabrigar, 2003). Of the many contextual factors, assessment has been found to have the most important influence on the way students go about learning. For example, assessment that is perceived to required a low level of cognitive abilities will more likely elicit a learning approach that concentrate on reproductive learning activities. Moreover, assessment demand will also interact with learning approach to determine academic performance. In this paper an assessment specific model of learning comprising presage, process and product variables (Biggs, 2001) was proposed and tested against data obtained from a sample of introductory economics students (n=434). The model developed was used to empirically investigate the influence of learning inputs and learning approaches on academic performances across assessment types (essay assignment, multiple choice question exam and exam essay). By including learning approaches in the learning model, the mechanism through which learning inputs determine academic performance was examined. Methodological limitations of the study will also be discussed.

The Federal circuit in Bilski : the machine-or-transformation test

In a much anticipated judgment, the Federal Circuit has sought to clarify the standards applicable in determining whether a claimed method constitutes patent-eligible subject matter. In Bilski, the Federal Circuit identified a test to determine whether a patentee has made claims that pre-empt the use of a fundamental principle or an abstract idea or whether those claims cover only a particular application of a fundamental principle or abstract idea. It held that the sole test for determining subject matter eligibility for a claimed process under § 101 is that: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. The court termed this the “machine-or-transformation test.” In so doing it overruled its earlier State Street decision to the extent that it deemed its “useful, tangible and concrete result” test as inadequate to determine whether an alleged invention recites patent-eligible subject matter.

Value-mapping inputs

This research aims to increase understanding of and delivery to qualitative (or intangible) outcomes and impacts of major economic infrastructure projects (i.e. bridges, roads, water infrastructure and the like), and the role of stakeholder engagement in this process.-------- Recent doctoral research completed at the Queensland University of Technology by the author investigated how the principles of corporate responsibility are applied in the construction sector. This related specifically to major economic infrastructure projects (hereafter referred to as major projects), with particular regard to urban transportation projects. One outcome of this past research was a value-mapping framework which enables organisations to track project outcomes to pre-existing corporate objectives, and report on these throughout the project life-cycle. Two recommendations for future research from that work formed the basis for this current research: • How can qualitative measurables be better integrated into decision-making on major economic infrastructure projects? • How can non-contractual stakeholders be more effectively engaged with on these projects? The link between these two areas may relate to the stakeholders’ role in qualitative indicator identification and measurement. This is a key point for future investigation.---------- The aim of this research is thus to further investigate these two areas, with the intent of (i) better defining the research direction; (ii) identifying potential research partners; and (iii) identify possible sources of future funding.

Managing process model complexity via abstract syntax modifications

As a result of the growing adoption of Business Process Management (BPM) technology different stakeholders need to understand and agree upon the process models that are used to configure BPM systems. However, BPM users have problems dealing with the complexity of such models. Therefore, the challenge is to improve the comprehension of process models. While a substantial amount of literature is devoted to this topic, there is no overview of the various mechanisms that exist to deal with managing complexity in (large) process models. It is thus hard to obtain comparative insight into the degree of support offered for various complexity reducing mechanisms by state-of-the-art languages and tools. This paper focuses on complexity reduction mechanisms that affect the abstract syntax of a process model, i.e. the structure of a process model. These mechanisms are captured as patterns, so that they can be described in their most general form and in a language- and tool-independent manner. The paper concludes with a comparative overview of the degree of support for these patterns offered by state-of-the-art languages and language implementations.

3D lung and rib cage reconstruction using low dose CT scans of adolescent idiopathic scoliosis pre and post anterior thoracoscopic correction

Adolescent Idiopathic Scoliosis (AIS) has been associated with reduced pulmonary function believed to be due to a restriction of lung volume by the deformed thoracic cavity. A recent study by our group examined the changes in lung volume pre and post anterior thoracoscopic scoliosis correction using pulmonary function testing (1), however the anatomical changes in ribcage shape and left/right lung volume after thoracoscopic surgery which govern overall respiratory capacity are unknown. The aim of this study was to use 3D rendering from CT scan data to compare lung and ribcage anatomical changes from pre to two years post thoracoscopic anterior scoliosis correction. The study concluded that 3D volumetric reconstruction from CT scans is a powerful means of evaluating changes in pulmonary and thoracic anatomy following surgical AIS correction. Most likely, lung volume changes following thoracoscopic scoliosis correction are multifactorial and affected by changes in height (due to residual growth), ribcage shape, diaphragm positioning, Cobb angle correction in the thoracic spine. Further analysis of the 3D reconstructions will be performed to assess how each of these factors affect lung volume in this patient cohort.

Selective growth of carbon nanotubes on bare silicon : MWNT sinthesys on patterned substrates without predeposition of metal catalyst

Carbon nanotubes (CNTs) are expected to become the ideal constituent of many technologes, in particular for future generation electronics. This considerable interest is due to their unique electrical and mechanical properties. They show indeed super-high current-carrying capacity, ballistic electron transport and good field-emission properties. Then, these superior features make CNTs the most promising building blocks for electronic devices, as organic solar cells and organic light emitting devices (OLED). By using Focused Ion Beam (FIB) patterning it is possible to a obtain a high control on position, relative distances and diameter of CNTs. The present work shows how to grow three-dimensional architecture made of vertical-aligned CNTs directly on silicon. Thanks to the higher activity of a pre-patterned surface the synthesis process results very quick, cheap and simple. Such large area growths of CNTs could be used in preliminary test for application as electrodes for organic solar cells.

Business process extensibility

Vendors provide reference process models as consolidated, off-the-shelf solutions to capture best practices in a given industry domain. Customers can then adapt these models to suit their specific requirements. Traditional process flexibility approaches facilitate this operation, but do not fully address it as they do not sufficiently take controlled change guided by vendors’ reference models into account. This tension between the customer’s freedom of adapting reference models, and the ability to incorporate with relatively low effort vendor-initiated reference model changes, thus needs to be carefully balanced. This paper introduces process extensibility as a new paradigm for customising reference processes and managing their evolution over time. Process extensibility mandates a clear recognition of the different responsibilities and interests of reference model vendors and consumers, and is concerned with keeping the effort of customer-side reference model adaptations low while allowing sufficient room for model change.