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Maribel Guerrero, Susanne Steiner

Entrepreneurship education in the age of

effectuation: teaching strategies evidence

from Mexico and Germany

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Guerrero, Maribel; Steiner, Susanne: Entrepreneurship education in the age of effectuation: teaching strategies evidence

from Mexico and Germany. - In: Henderson, Jamie P.; Lawrence, Adam D. (eds): Teaching strategies. - New York: Nova

Science Publishers, 2011. - ISBN: 978-1-61209-687-2 (print). - pp. 313–322.

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Entrepreneurship Education in the Age of Effectuation:

Teaching Strategies Evidence from Mexico and Germany

Maribel Guerrero1,2∗ and Susanne Steiner3

(1) Autonomous University of Tamaulipas, Mexico

(2) Autonomous University of Barcelona, Spain

(3) Berlin University of Technology, Germany

ABSTRACT

The positive impact of Entrepreneurship on economic development has been

supported by many research studies (Drucker 1985). Based on those, education and training

have been confirmed as relevant factors in promoting and fostering an entrepreneurial

perspective (Gibb 1994; Peterman and Kennedy 2003; Kuratko 2005; Pittaway and Cope

2007). Therefore, universities have increasingly incorporated entrepreneurship modules

into their educational programs at undergraduate, masters, and doctoral levels (Kirby 1992;

Vesper and Gartner 1997; Katz 2003). Even counterarguments on the general effectiveness

of entrepreneurship education agree that entrepreneurial skills are teachable (Aronsson

2004). In recent years, the effectuation theory has emerged, arguing that while it was

hitherto known that entrepreneurs focus on discovering and exploiting existing

opportunities with a set target in mind, research findings suggest another equally valid

approach (Sarasvathy 2008). In the age of effectuation, potential entrepreneurs may derive

their entrepreneurial ideas and decisions from the realities of their life and individual value

systems. Therefore, the same person can use both causal and effectual reasoning at different

times depending on what the circumstances call for (Sarasvathy 2001a). As a result, a

scientific debate about the role of effectuation in entrepreneurship education has emerged.

In particular, teacher-centered classroom teaching was exposed as a purely causal element,

due to its sequential progression from an initial business idea to its respective market

potential and financial projections (Sarasvathy 2001b). This study aims to demonstrate the

existence of a range of effectuation elements in current entrepreneurship education

programs and identify the teaching strategies adopted. The methodology followed the

multiple case study approach, applied to the entrepreneurship education programs at a

Mexican and a German University respectively. The main implication highlights the role

of both teaching methodologies and teaching models in entrepreneurship education in the

‘Age of Effectuation.’

∗ Corresponding Author: Dr Maribel Guerrero (maribel.guerrero@uab.cat)

Maribel Guerrero and Susanne Steiner

I. INTRODUCTION

The positive impact of Entrepreneurship on economic development has been supported by

many research projects (e.g., Drucker 1985). Based on that, education and training have been

confirmed as a relevant factor in promoting and fostering an entrepreneurial perspective (Gibb

1994; Peterman and Kennedy 2003; Kuratko 2005; Pittaway and Cope 2007). As a

consequence, for more than twenty years, universities have increasingly incorporated

entrepreneurship modules into their educational programs at undergraduate, masters, and

doctoral levels (Kirby 1992; Vesper and Gartner 1997; Katz 2003). Even counterarguments on

the general effectiveness of entrepreneurship education agree that entrepreneurial skills are

teachable (Aronsson 2004).

In recent years, a new theory has emerged introducing a novel approach to the phenomenon

of entrepreneurship: effectuation. Its author, Sarasvathy, argues that while it was hitherto

known that entrepreneurs focus on discovering and exploiting existing opportunities with a set

target (i.e., target market) in mind, research findings suggest another equally valid approach.

In the age of effectuation, potential entrepreneurs may derive their entrepreneurial ideas and

decisions from the realities of their life and individual value systems (Sarasvathy 2008). From

this perspective, the same person can use both causal and effectual reasoning at different times

depending on what the circumstances call for (Sarasvathy 2001a; Sarasvathy 2005).

As a result, a scientific debate about the role of effectuation in entrepreneurship education

has emerged. In particular, teacher-centered classroom teaching was exposed as a purely causal

element, due to its sequential progression from an initial business idea to its respective market

potential and financial projections (Sarasvathy 2001b). Based on that, the present study aims to

demonstrate the existence of a range of effectuation elements in current entrepreneurship

education programs. Our study draws upon the literature on effectuation and entrepreneurship

education. The methodology adopted was the multiple case study approach (Yin 1984). Its

findings highlight the practical implications for entrepreneurship education and training.

II. ENTREPRENEURSHIP EDUCATION AND EFFECTUATION THEORY

Teaching outcomes in entrepreneurship programs are generally assessed (e.g., Luethje and

Franke 2003; Zhao et al 2005; Mueller 2008) using the theory of planned behavior (Ajzen 1991)

as a framework. Measuring changes in an individual’s entrepreneurial intention or self-efficacy

(Bandura 1977; Chen et al. 1998; Ajzen 2002) before and after their entrepreneurship training,

Ajzen’s framework allows predicting (planned) behavior. In addition, the impact of

entrepreneurship education on entrepreneurial intent has been proven to depend on the

individual’s personality (Zhao et al 2010). The current challenge in entrepreneurship education

is therefore not to justify the discipline’s reason for being by proving the outcome, but rather

to enhance the outcome (Fiet 2001a and 2001b). In response to this challenge - and in line with

modern education models (Shuell 1996; Terhart 1999) -, teaching experts from different

countries have called for a more interactive and action-based teaching model in

entrepreneurship education (Fiet 2001b; Braukmann 2002; Rasmussen et al 2006).

In 2001, Sarasvathy introduced a new approach that argues that venture creation can be

pursued in one of two, equally successful, ways: either traditionally, i.e. with the goal in mind

Entrepreneurship Education in the Age of Effectuation

(termed “causal” or “causation-based”), or in an inverse way, i.e. starting with the

entrepreneur’s given set of means. The latter is termed “effectuation.” Table 1 illustrates the

main distinctions between causal and effectual reasoning. According to Sarasvathy (2001a),

reasoning based on effectuation is preferred by entrepreneurs in the early stages of a new

venture. As the venture matures, most entrepreneurs increasingly adopt a more causal

reasoning. In addition to a venture’s life cycle phase, the entrepreneur’s approach will depend

on who the entrepreneur is, what they know, and whom they know (Sarasvathy 2001b).

III. METHODOLOGY DESIGN

The proposed research is based on case study methodology (Yin 1984). A case study is an

empirical enquiry that investigates a contemporary phenomenon within its real-life context. It

is especially useful when the boundaries between phenomenon and context are not clearly

evident (Yin 1984). Hence, exploratory case study research is the design recommended for

studying a complex and underexplored area (Eisenhardt 1989; Yin 1984) such as demonstrating

the existence of effectuation elements in current entrepreneurship education programs. Case

study research can encompass both single- and multiple-case studies (Yin 1984).

Table 1. Distinctive aspects of Reasoning within

Causation versus Effectuation

Elements

Causal reasoning

Effectual reasoning

The challenge for the

entrepreneur is:

How to take the “right” decision

How to leverage skills and

circumstances

The underlying

rationale is:

Based on a chosen target

Based on a given set of means

This approach is useful

whenever:

The future is predictable

The future is unpredictable

The entrepreneur

Begins with a pre-determinate

goal, and seeks to identify the best

way to achieve it

Begins with a set of means and

create/s opportunities. Allows goals

to change over time, thus keeping

flexibility for arising contingencies

Source: Authors based on Sarasvathy (2001a, 2001b, 2005 and 2008).

Maribel Guerrero and Susanne Steiner

Table 2. University characteristics

Country University Founded

Undergraduate

Students

Academic

professors

Staff

Type

(funding)

Mexico

General

1957

30,000

500

3,500

Public

Germany

Technologica

l focus 1879 29,000 320 2,200 Public

Source: Authors.

Multiple cases are generally regarded as more robust than single-case studies, providing

the observation and analysis of a phenomenon in several settings. The multiple-case study

design also enables a replication logic in which the cases are treated as a series of independent

experiments (Eisenhardt 1989; Yin 1984). In this research, a multiple-case approach was

adopted to investigate the main elements of effectuation in entrepreneurship education in two

different countries. The research comprises a detailed field study of two universities, one

located in Mexico, the other in Germany. A preliminary desk research was conducted in order

to identify the entrepreneurial education modules to be assessed. In two different research

rounds the following aspects were considered:

a) Desk research:

• Curricular entrepreneurship courses (i.e., those with credit points only), addressing a

multidisciplinary target audience;

• The respective courses’ syllabi (cf. Gartner and Vesper 1994);

b) Field research (by way of qualitative interviews):

• Confirming the results derived from desk research;

• The teaching methodology applied (cf. Gartner and Vesper 1994), especially during

idea generation;

• Examples of entrepreneurial projects developed in the classes.

In addition, a replication approach was adopted. In this approach, we first studied the cases

independently and subsequently made cross-case comparisons. Both universities studied

feature an entrepreneurship offering that addresses students of all disciplines (i.e., not only

business students). The main data of the universities analyzed in this research is presented in

Table 2.

Data was collected based on modules offered in 2009 and using qualitative methods. To

triangulate the case findings and enhance the validity and reliability of the study (Yin 1984),

interviews with teachers as well as diverse secondary sources were used at different stages.

Regarding data analysis, a set of programs directed at undergraduate, graduate and postgraduate

students in economics and engineering from higher education institutions with entrepreneurship

education offerings were analyzed. In this sense, the numbers of participants in this study were:

Entrepreneurship Education in the Age of Effectuation

a) Number of participating teaching staff (of entrepreneurship education programs)

• Mexico: 2

• Germany: 4

b) Number of participating students (based on data from 2009)

• Mexico: 67 (summer term) and 55 (winter term); i.e., 20 teams (summer) and 18 teams

(winter)

• Germany: 29 (summer term) and 47 (winter term); i.e., 8 teams (summer) and 13 teams

(winter)

In the next step, individual curricular courses were selected for a profiling of the teaching

methodologies applied, thus increasing the reliability of the entire research (Yin 1984). The

selection criteria used were: (a) the course had to be part of the respective university’s

entrepreneurship syllabus; (b) it had to be offered to a multi-disciplinary student audience; and

categorized and analyzed according to the key informants’ own words and narratives. They

provided the basis for delineating themes and aggregate dimensions through the comparison of

key events. In the last step, the evidence obtained was examined by adopting an inductive

approach (Eisenhardt 1989).

IV. FINDINGS

The main characteristics of the cases analyzed are described in Table 3. In general terms,

both programs are relatively younger but with relevant differences such as the number of

students and start-ups created.

Table 3. Cases Analyzed

Case Type of

course

Year

introduced

Students

per term

Academics

per

programme

Disciplines

covered Credits

Team

Projects

per term

Start

-ups

Mexican

Entrepreneur

-ship Course

(compulsory)

2005 122 3

• 25%

Management

• 60%

Accounting

• 15%

Engineering

10 38 5

German

Entrepreneur

ship Course

(voluntary,

curricular)

2004 76 1

• 40%

Management and

Engineering

• 30%

Computer

Sciences

• 10%

Architecture

• 10% Social

Sciences

•

10% others

6 21 3

Source: Authors.

Maribel Guerrero and Susanne Steiner

Table 4. Causal and effectual elements in current entrepreneurship

education in both Mexico and Germany

Entrepreneurship Education

Program

Education elements

Causation elements

Effectuation elements

INPUTS

Content

Idea generation based on

market needs

Idea generation based on

individual strengths and

existing network

Sample

Methodologies

Business planning based on

a defined target market per

se = causation

Mentoring/ coaching (when

allowing for individual

preference for effectuation

approach)

Computer simulations

Teaching model

Teacher-centered

instructions (mainly

lecturing)

Student-centered instructions

(involving group discussions)

OUTPUTS

Type of projects

generated

Resulting projects demonstrate a blend of causation and

effectuation elements applied:

Based on participants’ own profiles a team decided to pursue

an online gaming venture (effectuation) and then defined this

as their target market (causation).

Based on team members’ skillset (effectuation), a team

identified a market need and existing niches (causation) and

decided to offer search engine optimization to small and

specialized law firms.

Source: Authors.

Based on the syllabi and information obtained, both educational programs are focused on

causation; however, although none of it is mentioned in the course syllabi, the programs already

feature elements of effectuation (see Table 4).

Despite cultural differences between the two universities’ countries of origin, the

underlying target audiences of the respective teaching programme proved to be similar (cf.

Table 3): Participating students stem from diverse study backgrounds including engineering

and management studies. Moreover, participants’ grading is taken into consideration for their

final grade, as both courses are curricular. Hence, similar educational outcomes were expected

for participants. Based on that, the following findings emerged from our study:

1. Neither of the syllabi so far includes a mentioning of effectuation, be it the formal

term, or its objectives;

2. As expected, both educational programs displayed a clear focus on causation. It was,

however, possible to provide evidence of elements of effectuation already applied in

both of the modules studied;

3. Effectuation elements were identified in the course methodologies as well as in the

underlying teaching models;

Entrepreneurship Education in the Age of Effectuation

4. Most impressively, the resulting team projects were found to have been a result of a

“blended” approach of causation and effectuation: The student projects assessed

showed different ways and “levels” of actioning or building on both;

5. Our interviews also showed that the choice of a causation-based approach to both

teaching and the resulting venture creation is not a result of entrepreneurial learning

but rather result of a personal preference/ personality style. This applies to both

participating students and teaching staff.

6. Both Mexican and German program showed the same findings, despite the slight

differences in methodologies and teaching models.

V. CONCLUSIONS

This study set out to assess to what extent the upcoming theory of Effectuation has been

put into practice already, whether being explicitly labeled as such, or not.

The authors chose two different entrepreneurship education programs in two different

continents. Despite cultural differences between the two universities’ countries of origin, the

underlying parameters of the respective teaching programme proved to be comparable (cf.

Table 3). Not only were both modules assessed registered as “curricular” (thus awarding credit

points to participants), but they were also both directed at students from diverse study

backgrounds including engineering and management studies. Hence, similar educational

outcomes were expected for participants.

The resulting findings demonstrated that effectuation as a methodology in training future

entrepreneurs has already been part of the curriculum. However, it was found to have been

practiced without being explicitly mentioned, thus students practiced it almost intuitively. To

what extent this was influenced by the respective teaching staff and their background, and/or

by the participating students’ preferences, was not part of this study and would have to be

looked into in a next step.

In contrast to the effectuation-based methodologies applied in both programs, there was no

mentioning of effectuation in either module’s official description. The corresponding syllabi

assessed were thus found to lag behind. Undoubtedly they will be updated as effectuation

becomes more widely known in both academic and teaching arenas. The new ‘Age of

Effectuation’ will require an update of entrepreneurship education programs around the globe.

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