Exploring the Role of Effectuation In Business Startup: A Review And Evaluation of Entrepreneurial Project

Abstract

Entrepreneurship educationis closely related to individuals’ ability to start and develop a business. Every student in Ciputra University is required to have a business of their own. In the beginning of their sophomore years, they are taught about business startup. Students normally use causal or predictive reasoning, but the approach is not always a success. As young entrepreneurs who have already started a new business, many of our students are unable to maintain the business. This leads to the need for a new theory that can be both learned and taught to help students develop not only a business, but a sustainable corporation. Effectuation approach in business startup comes as an option (Sarasvathy,2008).The core of effectuation is the idea that instead of finding and exploiting opportunities that have been explored by others, effectual entrepreneurs create oportunities by understanding themselves;who they are, what they know, and who they know, and immediately take action and interact with other people. Some of the principles of effectuation such as bird in hand, affordable loss, lemonade, patchwork quilt, and pilot-in-the-plane can minimize the use of prediction and allow entrepreneurs to shape their unpredictable future. The purpose of this research is to understand how to apply the principles of effectuation into entrepreneurial projects and to prepare young entrepreneurs to have great business