Harvesting More from Opportunities: Causation, Effectuation, and Venture Performance

Venture performance is not only shaped by the decision-making strategies but also by opportunities that the venture exploit. Although researchers have started to investigate the interactive effects of causation and effectuation on venture performance, few studies have empirically examined such effects and how opportunity moderates the relationship between the two strategic decision-making logics and venture performance. Taking causation and effectuation as orthogonal, we address the issue by proposing a model of the interactive effect of causation and effectuation that is contingent on higher order opportunity. Drawing on a sample of 138 new ventures in China, we find that the interactive effect of causation and effectuation can be either beneficial or detrimental to venture performance, conditioned on the higher order opportunity.