Effectual Thinking

Effectual thinking is a way used to solve human problems by having an unpredictable future. Entrepreneurs face problems without a certain goal or clear future but work with what they have to produce the best results. With the resources available, it is up to an entrepreneur to use their imagination and think of how they can solve a problem. The effectuation theory was first discovered by Professor Saras Sarasvathy, also known to be a good scholar based on high-performance entrepreneurship, in the late 1990s (“Home | Darden Ideas to Action,” 2022). Effectual thinking is advantageous as it gives one the “what-ifs” scenarios and gives them a chance to figure out what they can do with a certain set of resources. By dealing with this worst-case scenario, entrepreneurs learn to act immediately and provide the best result using what he has.

Causal thinking, on the other hand, is a way of linking activities or events together (“The Open University”, 2022). This means that causal thinking is goal-oriented, and everything starts from a given goal. When an entrepreneur is causally thinking, they are working by having a goal and are required to do whatever they can to acquire the resources needed to achieve this goal. For instance, suppose an entrepreneur decides they want a shoe company. In that case, the shoe company is the goal, and their responsibility is to attain what is needed to start the shoe company.

Effectual reasoning has no predictable future. When an entrepreneur does not want to focus on the goal but on using the available resources, then effectual thinking is applicable. Entrepreneurs can also use it when they want to identify the ideas they can implement using the resources and who can factor in strategic partnerships and leveraging contingencies (Sarasvathy, 2006). An example of effectual thinking occurred when I needed to prepare dinner and did not know what to cook, so I looked at the ingredients available and created a meal from what was available.