Effectuation and Institutional Entrepreneurship: Evidence from Russia

Abstract

We investigate the impact on institutional entrepreneurship of two contrasting logics: effectuation and causation. We integrate effectuation theory, which emphasizes entrepreneurial responses to uncertainty, with the institutional entrepreneurship literature, which identifies uncertainty as a challenge that institutional entrepreneurs seek to address. In particular, this study differentiates between institutional entrepreneurs who occupy dominant social positions and are embedded in the prevailing institutional context, and challengers, who are often not embedded. We show that effectual logic that utilizes affordable loss is closely associated with institutional entrepreneurs who were effective challengers, while causal logic was closely associated with those who were effective dominants. Of the effectuation dimensions, pre-commitment was most consistently observed. For institutional entrepreneurs, effectual and causal logics are substitutes, rather than complements. Employing longitudinal data from eight institutional entrepreneurs in post-communist Russia, an extreme context noted for frequent and significant institutional changes, we utilize an alternate templates research strategy to support the resultant propositions.