Effectuation and Hypothetical Scenarios Quiz

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Which theory emphasizes the use of pre-existing knowledge and resources to create new opportunities?

Contingency theory

Cognitive theory

Effectuation theory (correct)

Causation theory

According to the text, what does effectuation theory emphasize for entrepreneurs?

Leveraging existing resources and constraints to create opportunities (correct)

Focusing on predicting and controlling the future

Taking calculated risks based on market analysis

Following a linear and predictable approach to decision-making

What is the primary focus of causation theory, as discussed in the text?

Creating new opportunities through pre-existing knowledge

Adapting to changing market conditions

Leveraging existing resources and constraints

Predicting and controlling the future (correct)

Which theory is more aligned with a flexible approach to entrepreneurial decision-making?

Effectuation theory Signup and view all the answers

In the context of entrepreneurial decision-making, what does contingency theory emphasize?

Adapting to changing market conditions Signup and view all the answers

Which theory advocates for entrepreneurs making decisions based on available means rather than trying to predict and control the future?

Effectuation theory Signup and view all the answers

What does the author argue for in the given text?

The author argues for the notion of effectuation as an explanation for the creation of artifacts. Signup and view all the answers

In what way does causation differ from effectuation?

Causation relies on the logic of control, while effectuation relies on the logic of prediction. Signup and view all the answers

What is the central topic of discussion in MBA classrooms, according to the text?

The decision-making process and examples from business. Signup and view all the answers

What do classes with a more psychological bent typically discuss, according to the text?

Personnel decisions and managing/leading a team. Signup and view all the answers

What is the underlying assumption for almost every decision in economics and management, according to the text?

The creation of central artifacts and contexts. Signup and view all the answers

How does the author illustrate effectuation in the given text?

Through business examples and realistic thought experiments. Signup and view all the answers

What does the author suggest should be an important part of our review?

"Questions such as how to make pricing decisions when the firm does not yet exist." Signup and view all the answers

"How do we value firms in an industry that did not exist five years ago..." reflects a concern about:

"Valuing firms in nascent or newly forming industries." Signup and view all the answers

"Almost half the companies on the Fortune 500 list did not exist fifteen years ago." implies:

"Business all over the world is becoming more free-market oriented and entrepreneurial." Signup and view all the answers

"If we clearly knew which particular market to capture, we could presumably use techniques of market research and formulate strategies to penetrate it." suggests a concern about:

"Using techniques of market research to capture a particular market." Signup and view all the answers

"In areas such as e-commerce, most markets are nascent or simply nonexistent." implies:

"Rapid change is being driven by emerging technologies like those on the internet." Signup and view all the answers

What does the author thank the Ewing Marion Kauffman Foundation for?

Funding empirical work that led to the development of ideas in this article. Signup and view all the answers

What does the term 'effectuation' refer to in the context of the text?

The process of building a business using contingencies and serendipitous events Signup and view all the answers

What concept is associated with the phrase 'a process of satisficing'?

Decision-making under uncertainty Signup and view all the answers

What is meant by 'exploration of cultural aspects' in the context of the text?

Offering lectures and classes on Indian cooking and culture Signup and view all the answers

What does the example of Browning Ferris Industries (BFI) illustrate?

The potential for serendipitous events to lead to successful businesses Signup and view all the answers

What is the primary implication of the statement, 'the process of effectuation allows the entrepreneur to create one or more possible effects'?

Entrepreneurs can adapt and shape their goals over time based on contingencies Signup and view all the answers

What is suggested by the description of the entrepreneur deciding to write a book, go on the lecture circuit, and build a business in the motivational consulting industry?

Entrepreneurs may change their career paths based on unforeseen circumstances Signup and view all the answers

How does the example of U-Haul relate to the concept of effectuation?

U-Haul began without any conscious initial intention on the part of the founders Signup and view all the answers

What is illustrated by the example of Tom Fatjo and the creation of Browning Ferris Industries (BFI)?

The potential for unexpected events to lead to new business opportunities Signup and view all the answers

What does the term 'satisficing' refer to in the context of entrepreneurship?

Making decisions based on available options under uncertainty Signup and view all the answers

How does the concept of 'effectuation' differ from traditional business planning?

Effectuation allows entrepreneurs to shape their goals over time, while traditional planning requires adherence to fixed goals Signup and view all the answers

What is suggested by the statement, 'even great companies have begun without any conscious initial intention on the part of the founders'?

Successful businesses are often founded through accidental or unexpected events Signup and view all the answers

How does the entrepreneur use customer feedback to shape her business according to effectuation principles?

By continuously listening to customers and building a network of strategic partners Signup and view all the answers

What is the distinguishing characteristic between causation and effectuation processes?

The number of possible effects using a particular set of means Signup and view all the answers

According to the text, what does March express optimism about in the context of changing goals?

The intractability of changing goals in a normative theory of choice Signup and view all the answers

What is the main focus of the article's special theory of effectuation?

Explaining the creation of new firms Signup and view all the answers

What is the primary challenge faced by entrepreneurs as discussed in the text?

Choosing particular effects that may not implement intentional goals Signup and view all the answers

What does the author hope to contribute toward in the article?

Developing a rudimentary theory of effectuation Signup and view all the answers

Which justification for ignoring phenomena involving ambiguous, changing, and constructed goals and values does the author express skepticism about?

The first justification Signup and view all the answers

What does the author identify as the main element of the general theory of effectual reasoning?

Multiple interacting levels of phenomena Signup and view all the answers

What is the distinguishing characteristic between causation and effectuation models?

Choosing between possible effects using a particular set of means in effectuation models, versus choosing between means to create a particular effect in causation models Signup and view all the answers

What is the operationalization of an abstract human aspiration?

An effect Signup and view all the answers

What does the author emphasize about both causation and effectuation processes?

They occur simultaneously, overlapping and intertwining over different contexts of decisions and actions. Signup and view all the answers

What does March express skepticism about regarding changing goals?

Goal development and choice being independent processes, conceptually and behaviorally. Signup and view all the answers

What is the distinguishing characteristic between causation and effectuation models?

Choosing between means to create a particular effect in causation models, versus choosing between possible effects using a particular set of means in effectuation models. Signup and view all the answers

What was the visionary approach of U-Haul that led to its creation?

Recognizing the need for do-it-yourself moving equipment after World War II Signup and view all the answers

What did L. S. Shoen use to create U-Haul with minimal financial outlay?

Processes of effectuation involving seizing and exploiting contingencies through an expanding network of human alliances Signup and view all the answers

What did U-Haul do to establish its market presence?

Painted trailers bright orange and imaged them with a sales message Signup and view all the answers

How did U-Haul initially finance the acquisition of trucks and use of the trucks?

Individual down payments from friends, family members, and customers Signup and view all the answers

What is emphasized by the process of effectuation used by L. S. Shoen in creating U-Haul?

Seizing and exploiting contingencies through an expanding network of human alliances Signup and view all the answers

What did U-Haul offer early customers to establish a commission structure for dealers?

A discount on their trailer rental for establishing a U-Haul rental agent at their destination Signup and view all the answers

What allowed U-Haul to come into being with hardly any employees and a small outlay of funds?

The use of processes of effectuation involving seizing and exploiting contingencies through human alliances Signup and view all the answers

How did U-Haul eliminate the need for buying space in cities across the country and recruiting employees to man the spaces?

Contracting with service station outlets to merchandise trailer rentals Signup and view all the answers

What was the name imaged on U-Haul trailers to establish brand identity?

'U-Haul Co.' Signup and view all the answers

What was imaged on the sides and back of U-Haul trailers to promote sales?

'U-Haul Co., Rental Trailers, $2.00 Per Day' Signup and view all the answers

What color were U-Haul trailers painted to establish brand recognition?

Orange Signup and view all the answers

What financial resources did L. S. Shoen use to create U-Haul with minimal outlay?

$5,000 and an expanding network of human alliances. Signup and view all the answers

What did L. S. Shoen do instead of trying to raise money to buy a large number of trucks or start the company with very few locations?

He established an identity by painting trailers bright orange and imaged them with a sales message. Signup and view all the answers

Effectuation and Hypothetical Scenarios Quiz

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Questions and Answers

Which theory emphasizes the use of pre-existing knowledge and resources to create new opportunities?

According to the text, what does effectuation theory emphasize for entrepreneurs?

What is the primary focus of causation theory, as discussed in the text?

Which theory is more aligned with a flexible approach to entrepreneurial decision-making?

In the context of entrepreneurial decision-making, what does contingency theory emphasize?

Which theory advocates for entrepreneurs making decisions based on available means rather than trying to predict and control the future?

What does the author argue for in the given text?

In what way does causation differ from effectuation?

What is the central topic of discussion in MBA classrooms, according to the text?

What do classes with a more psychological bent typically discuss, according to the text?

What is the underlying assumption for almost every decision in economics and management, according to the text?

How does the author illustrate effectuation in the given text?

What does the author suggest should be an important part of our review?

"How do we value firms in an industry that did not exist five years ago..." reflects a concern about:

"Almost half the companies on the Fortune 500 list did not exist fifteen years ago." implies:

"If we clearly knew which particular market to capture, we could presumably use techniques of market research and formulate strategies to penetrate it." suggests a concern about:

"In areas such as e-commerce, most markets are nascent or simply nonexistent." implies:

What does the author thank the Ewing Marion Kauffman Foundation for?

What does the term 'effectuation' refer to in the context of the text?

What concept is associated with the phrase 'a process of satisficing'?

What is meant by 'exploration of cultural aspects' in the context of the text?

What does the example of Browning Ferris Industries (BFI) illustrate?

What is the primary implication of the statement, 'the process of effectuation allows the entrepreneur to create one or more possible effects'?

What is suggested by the description of the entrepreneur deciding to write a book, go on the lecture circuit, and build a business in the motivational consulting industry?

How does the example of U-Haul relate to the concept of effectuation?

What is illustrated by the example of Tom Fatjo and the creation of Browning Ferris Industries (BFI)?

What does the term 'satisficing' refer to in the context of entrepreneurship?

How does the concept of 'effectuation' differ from traditional business planning?

What is suggested by the statement, 'even great companies have begun without any conscious initial intention on the part of the founders'?

How does the entrepreneur use customer feedback to shape her business according to effectuation principles?

What is the distinguishing characteristic between causation and effectuation processes?

According to the text, what does March express optimism about in the context of changing goals?

What is the main focus of the article's special theory of effectuation?

What is the primary challenge faced by entrepreneurs as discussed in the text?

What does the author hope to contribute toward in the article?

Which justification for ignoring phenomena involving ambiguous, changing, and constructed goals and values does the author express skepticism about?

What does the author identify as the main element of the general theory of effectual reasoning?

What is the distinguishing characteristic between causation and effectuation models?

What is the operationalization of an abstract human aspiration?

What does the author emphasize about both causation and effectuation processes?

What does March express skepticism about regarding changing goals?

What is the distinguishing characteristic between causation and effectuation models?

What was the visionary approach of U-Haul that led to its creation?

What did L. S. Shoen use to create U-Haul with minimal financial outlay?

What did U-Haul do to establish its market presence?

How did U-Haul initially finance the acquisition of trucks and use of the trucks?

What is emphasized by the process of effectuation used by L. S. Shoen in creating U-Haul?

What did U-Haul offer early customers to establish a commission structure for dealers?

What allowed U-Haul to come into being with hardly any employees and a small outlay of funds?

How did U-Haul eliminate the need for buying space in cities across the country and recruiting employees to man the spaces?

What was the name imaged on U-Haul trailers to establish brand identity?

What was imaged on the sides and back of U-Haul trailers to promote sales?

What color were U-Haul trailers painted to establish brand recognition?

What financial resources did L. S. Shoen use to create U-Haul with minimal outlay?

What did L. S. Shoen do instead of trying to raise money to buy a large number of trucks or start the company with very few locations?

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