Overview Of Methodologies. Effectuation . Effectual Reasoning

Overview of Methodologies Effectuation Effectual reasoning was researched and developed by Sara Sarasvathy, Associate Professor in the Darden Graduate School of Business Administration at the University of Virginia. As stated by Sarasvathy, â€Å"‘effectual’ is the inverse ‘causal’† (Sarasvathy, n.d.). Throughout history, business students have been taught causal reasoning (Sarasvathy, n.d.). Causal reasoning consists of finding the best means (cheapest, quickest, most efficient, etc.) to reach a predetermined goal (Sarasvathy, n.d.). However, effectuation takes the opposite approach. Effectual thinking consists of collecting current means and determining potential outcomes utilizing these means. (Sarasvathy, n.d.). One approach is not better†¦show more content†¦Avoid doing a competitive analysis (Sarasvathy, n.d.). Additionally, target key companies instead of conducting broad market research. Developing pre-commitments reduces uncertainty in the future (Sarasvathy, n.d.). 3. Leveraging Contingencies - Turning the unexpected into something beneficial (Sarasvathy, n.d.). Not all surprises are always bad. Surprises can be used to help develop and grow a new venture. Rather than trying to predict the future, focus on activities within your control (â€Å"What is effectuation?† 2011). The logic behind effectual thinking is†¦ â€Å"to the extent that we can control the future, we do not need to predict it† (Sarasvathy, n.d.). Lean Startup Lean startup is a scientific approach to developing a new product or business. Eric Ries created the term, â€Å"lean startup† (Santoro, 2014). Ries was motivated to develop a startup approach that embraced failure, since most new businesses and startups usually fail (Santoro, 2014). Additionally, lean startups focus on using resources efficiently and eliminating waste (Santoro, 2014). Principles of Lean Startup 1. Entrepreneurs are Everywhere - Anyone can be an entrepreneur, whether you are working out of a garage or an international corporation. Entrepreneurship is not a product; it is a mindset that can be learned. 2. Entrepreneurship is Management - Entrepreneurship is not creating a product, it is creating an organization,