The Effects of Causation and Effectuation on Novelty-centered Business Model Design: The Moderating Role of Environment Uncertainty

Abstract

Abstract:

Novelty-centered business model design is important for new ventures. However, existing literature has not yet fully explained whether causation or effectuation is useful for the novelty-centered business model design. This study applies effectuation theory to examine the relationships between causation and effectuation and novelty-centered business model design, and further proposes that demand uncertainty and competitive intensity moderate the relationships. Results from a sample of 212 new ventures in Shaanxi province demonstrate that both causation and effectuation can facilitate the new ventures' novelty-centered business model design. Additionally, we find that demand uncertainty strengthens the effects of effectuation but weakens the effects of causation on novelty-centered business model design. Competitive intensity strengthens the effects of causation but weakens the effects of effectuation on novelty-centered business model design.

Key words: causation, effectuation, novelty-centered business model design, environment uncertainty

Wang Lingling, Zhao Wenhong, Wei Zelong. The Effects of Causation and Effectuation on Novelty-centered Business Model Design: The Moderating Role of Environment Uncertainty[J]. , 2019, 31(1): 90-100.

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