APPLICABILITY OF EFFECTUATION TO CORPORATE VENTURING

Abstract

This study explores the effectiveness of applying effectuation, a decision-making logic associat-ed with entrepreneurs, to corporate venturing within organizations. Rather than focusing on venture leaders, the study examines its application to senior management and related departments (referred to as the organizational side). The findings indicate that leveraging the subdimensions of effectua-tion—flexibility and external collaboration—enhances exploratory performance, while the princi-ple of affordable loss has a negative impact. Although causation is commonly employed as a deci-sion-making logic on the organizational side, its effectiveness remains inconclusive. An analysis of organizational culture reveals that flexibility and external collaboration are encouraged in disci-plined organizations, whereas they are inhibited in collectivist organizations, where the principle of affordable loss is more prevalent. To foster successful corporate venturing, organizations should prioritize cultivating a self-disciplined culture that promotes flexibility and external collaboration.