Effectuation and home-based online business entrepreneurs

Daniel, Elizabeth M.; Di Domenico, MariaLaura and Sharma, Seema (2015). Effectuation and home-based online business entrepreneurs. International Small Business Journal, 33(8) pp. 799–823.

DOI: https://doi.org/10.1177/0266242614534281


This article explores effectual processes within home-based online businesses. Our empirical evidence provides a number of refinements to the concept of effectuation in this specific domain. First, the ubiquity of non-proprietary online trading platforms encourages the adoption of effectual approaches and removes the importance of forming proprietary strategic alliances and pre-commitments. Second, the notion of affordable loss - a central tenet of effectuation - should be extended beyond the notion of economic to social affordable loss, including loss of status and reputation and finally, home-based online businesses allow effectuation to be associated with low levels of entrepreneurial self-efficacy and experience.

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