Does practice make micro-entrepreneurs perfect? An investigation of expertise acquisition using effectuation and causation

This paper reports on a study testing whether and how the use of effectuation and causation logics influences deliberate practice in businesses started by microfinance borrowers (“micro-entrepreneurs”) in Sri Lanka. Using mixed methods, we surveyed clients of a large Sri Lankan microfinance institution and deepened findings from the survey through 24 interviews. In this way, we identified specific patterns of relationships between principles of the two logics and five elements of deliberate practice identified in the expertise literature from cognitive science. We found that both effectual and causal logics (but not effectuation alone) facilitate deliberate practice, an important result since deliberate practice could be expected to help micro-entrepreneurs gain business and entrepreneurial expertise. We also found interesting patterns in the links among effectuation and causation and specific elements of deliberate practice. In particular, one effectuation principle—acknowledging and leveraging the unexpected—impacted all five elements of deliberate practice, suggesting that learning to manage uncertainty is a central task—perhaps the central task—in becoming an entrepreneur. By contrast, causation influenced elements of deliberate practice linked to “venture-building” or “entrepreneuring,” and not the more personal elements linked to seeing oneself as an entrepreneur. As expected from the literature on expertise, deliberate practice was more likely to occur in earlier stages of venturing by younger, less-experienced entrepreneurs. Findings not only offer avenues for future research into deliberate practice in entrepreneurship but also suggest new ways for microfinance institutions to help their clients move toward entrepreneurial expertise.