Antecedents of effectuation and causation in SMEs from emerging markets: the role of CEO temporal focus

Abstract

Purpose

Previous studies considered effectuation and causation as alternative decision-making strategies used by entrepreneurs to navigate uncertainty, having various individual- and firm-level antecedents. This study aims to broaden our understanding of individual-level antecedents by examining the role of Chief Executive Officer (CEO) temporal focus in decision-making processes in small and medium-sized enterprises (SMEs).

Design/methodology/approach

Based on a multiple case study research design, the authors empirically analyse 16 Russian SMEs to uncover how the CEO temporal focus relates to the choice of effectuation/causation strategies under uncertainty.

Findings

CEOs with past orientation tend to adopt causation, future-oriented CEOs adhere to effectuation, while present-focused CEOs rely on both decision-making strategies (i.e. ambidexterity). Prior crisis-related experience is the underlying mechanism behind the relationship between CEO temporal orientation and effectuation/causation strategies. The authors formulate several propositions that may be tested in future studies in the field.

Originality/value

The contribution of this study consists in uncovering a new individual-level antecedent of effectuation/causation under uncertainty (i.e. CEO temporal focus) and suggesting that prior crisis experience acts as a mechanism underlying this relationship. The authors advance the strategic leadership theory by underscoring the CEO’s role in decision-making processes in SMEs.