A comprehensive literature review of effectuation theory from 1999 to 2011

Entrepreneurs are entrepreneurial, as differentiated from managerial or strategic, because they think effectually, as suggested by Dr. Saras Sarasvathy. For this reason, effectuation has attracted considerable research attention in the last decade. Central to Sarasvathy's effectuation are two building blocks: the science of the artificial, and the pragmatist method. Effectuation starts from the position that the future is contingent in which the essential characteristic of the future, in this view, is its unpredictability. Effectuation is based on transforming uncertainty into opportunities. Despite the widespread literature on this topic, efforts to review and analyse research on effectuation theory and practice are very limited. This literature review paper proposes a new conceptual classification scheme, in order to classify past and current developments in effectuation research. More than 120 papers published on effectuation studies from 1999 to 2011 were classified and analysed. For better effectuation-theory applications, researchers need to focus their effort on the empirical studies beside the theoretical developments, which are reached in advanced stages. Finally, this paper discusses some other future research directions.