Effectuation in Business to Government Context

Sammanfattning: Effectuation is a theory about entrepreneurial problem-solving and management that was first identified by Sarasvathy (2001). Effectual logic has proven to be particularly useful when the company is functioning under the conditions of high uncertainty or goal ambiguity. It is an already widely-studied topic and it has been examined in various contexts, but one field that has completely lacked the attention of the researchers is the business to government context. Our study is focusing on effectuation in business to government context in specific and the aim of our study is to find out (1) how the business to government context influences the application of effectual logic, (2) and what the potential outcomes for innovation are. We used action research to build understanding through a deep involvement with a case organization. Through an experiment involving managers of our case organization, we could find which process is used, and how it relates to the context. Our conclusions show that business to government context sets some limitations to effectual approaches, and we present a framework which represents this effectual process observed in our case organization. In addition, grounded on our previous findings, we analyzed how this practiced process, and the context, set barriers to innovation as well: results such as difficulties to gain pre-commitments, inability to spread risk among stakeholders and difficulty to run pilot projects, are some of the observed findings. On the other hand, we argue that this brought to a focus on incremental innovations, which are new features added to pre-existing products sold to pre-existing clients. At the end of our study we come up with implications for researchers, which could be used to direct future contextual studies regarding effectuation and innovation. But also, some implications for policy makers and managers are presented, so to suggest ways to lower barriers for radical innovation in business to government, and create a more innovative friendly context.