Fuzzy Analysis of the Effect of Entrepreneurs' Decision-Making Logic on Business Innovation

Effectuation and causation represent two types of decision-making logic of entrepreneurs in the entrepreneurial process. Effectuation emphasizes using available means, controlling the future, flexibility, and identifying potential market opportunities in an uncertain context. Causal logic focuses on formal planning, predicting the future, and competitive analysis. Studies show that new ventures are often sources of innovation. However, such firms are rarely able to invest in costly processes and instead use alternative routes to generate innovation. Firms' innovative actions were carried out using the approaches of effectuation and causation to reduce uncertainty. This research examined how combined interactions of effectuation principles (including experimentation, affordable loss, flexibility, and pre-commitment) and causation lead to business innovation. In this study, the fuzzy set qualitative comparative analysis (fsQCA) and configurations of the dimensions of effectuation and causation related to business innovation were investigated. The research sample included 145 entrepreneurs established in science and technology parks. The results showed eight combinations of causation and dimensions of effectuation that lead to a high level of innovation. Findings revealed that no single condition was necessary for business innovation, and entrepreneurs operating in science and technology parks use effectuation components and causation in complex configurations. Finally, recommendations for future studies were provided.