Entrepreneurial Processes (the Case & the Coding)

Regarding the other main construct of the research, namely the entrepreneurial processes and the theory of Sarasvathy, there can be a couple of points made. I personally believe that the case itself and the coding have particular limitations with regard to the entrepreneurial component. To begin with, in my view, the case has a certain nature of guiding the participants towards specific directions throughout the study, which in fact contradicts the very purpose of the research that is to test effectuation and causation. To give an example, the case starts off already with the theme that respondents are ‘told’ to imagine they start up a coffee shop, in the campus of their university. In further phases of the case, they are also ‘told’ that they have limited financial resources. Now, in the effectuation theory, Sarasvathy claims that effectual entrepreneurs choose their own direction of starting a business based on, inter alia, their own specific personal interests, financial situation, past experiences and network (i.e. who I am, what I know and whom I know). When steering the entrepreneurs into a certain business idea from the beginning and in a given location, which may be new, unknown or unclear to them – although it is stated that they imaginarily have 5 years of past experience and personal interest in coffee business), the case is already partly departed from effectual reasoning, in my opinion. Similarly, in the flow of the case

certain tasks are given to the entrepreneur to undergo, such as product redevelopment, growing the company, hiring professional management so on and so forth. On the one hand, as the aim of the case is to witness entrepreneurs’ decision making reasoning throughout the entrepreneurial processes (i.e. the case). On the other hand, guiding entrepreneurs into certain tasks might jeopardize the reliability of testing especially their effectual logic.

Furthermore about the case, I have a feeling that some of the questions in particular reserve a certain direction in them. First problem asks the interviewee to identify potential customers, competitors; to conduct a market research and growth possibilities. Thereby, the entrepreneur automatically concentrates on market such causal elements as market knowledge, competitive analysis, goal-driven (growth) and future predictions, which result in a frequent coding of these elements. In effectuation theory also seen in the coding schema, it is put forth that effectual entrepreneurs do not focus on costumers, competition and market research. Such a problem hence directs the entrepreneur into the direction of causation. As a result, it must be no coincidence that for instance competitive analysis (C3-B) is mentioned by entrepreneurs from both Turkey and the UK, only in the first question, 50% (39/73 and 28/56 respectively) of the entire case study. Similarly, existing market knowledge (C4-K) occurs by chance again for both parties 28% of the time (60/210 and 49/175 respectively).

Therewithal, the second problem gives results of an already-conducted market research as well as information about competitors, the entrepreneur is asked to determine a market segment to sell to, a selling price and selling strategy. These questions again lead mainly to causal answers and argumentations, which results in 80% causation proportion for Turkish and 90% for the UK entrepreneurs. Problem four explicitly asks about potential alliances and partnership, thus it is no surprise that E3-A element of the coding schema in fact occurs most frequently on this question. 60% (24/40) of the overall E3-A coding happens only in the fourth problem for Turkish entrepreneurs and 70% (15/21) for the UK entrepreneurs. To move on, once more, the problem seven is all about growing the company and possible strategies on this. It is inevitable that the respondents talk continuously about growth (goal driven) and the future (predictions). In the table below, a certain pattern in each question, similar for both Turkish and the UK entrepreneurs can be observed:

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 Turkey 82% 80% 19% 46% 88% 70% 59% 30% 51% 66% UK 90% 90% 37% 41% 64% 59% 58% 23% 68% 69%

From the table 12, a pattern can be deduced that is almost equally evident for both sample groups. To be more precise, the distribution of effectuation and causation shows a similar form; only in P3, P4 and P8 data from both groups resulted in effectuation. In the remaining 7 problems, causation has an evenly strong dominance for both parties, except for the P5 and P9 where the scores differ approximately 15% from each other, but both on the same side of the equation. From these findings and the argumentations presented above, it can be inferred that the case-study has a certain guiding nature of its own, which may be considered as a serious limitation to be dealt with. I have further doubts about whether or not this case-study precisely measures the genuine mentality, decision making style and entrepreneurial logic of the participants who find themselves in a virtually shaped business environment where they are asked to go through a fixed set of questions.

One last remark goes to the coding of the think-aloud protocols based on the case-study. Constructed upon Sarasvathy’s main principles of effectuation and causation, a coding schema is prepared for this project (presented in chapter 4). For both constructs, there are six chief elements plus one element when there is no trace of any of the other six. This coding schema supposedly covers effectuation and causation wholly, when the interviewee vocalizes his or her thought process, the task of the researcher is to categorize it within the coding schema. Two possible constraints are to be spoken of. First, one can argue that this schema may not be sufficient to cover everything that a respondent mentions about and to specify it under one of this limited number of categories. Although there is a rather generic, nonspecific option (C7-X causation with no subcategory and E7-N effectuation with no subcategory), I as the researcher, felt sort of constrained with the coding schema and had difficulty at times while interpreting what the interviewee talked about. Secondly, the coding component of the research is the most subjective element in this study as it depends merely on the understanding, interpretation and elucidation of the researcher. Although this is quite normal as this thesis exactly is a very subjective academic work of the researcher; the fact that the core of study is very much open to subjective interpretation and directly influences the results is to be approached cautiously.