Effectuation: An Alternative Approach for Developing Sustainability Architecture in Small Business

  • Richard C. Grimm Slippery Rock University


Many business firms are incorporating sustainability initiatives into their business plans. Sustainability integration typically utilizes a resource intensive comprehensive planning process. Implementation of sustainability initiatives into a business is not likely to be equally accessible amongst firms. Larger, more established firms may have greater resources to bear the costs while smaller firms may face significant impediments that preclude taking a similar approach (Schick et al., 2002). Thus, an alternative approach to sustainability integration is suggested to accommodate the specific issues common to smaller businesses. This study develops an alternative approach for small businesses based on the concept of effectual reasoning as described in the collective works of Sarasvathy (2001, 2008). We provide a rationale for using effectuation, demonstrate how the process applies to sustainability integration within the context of small firms, and suggest roles for business consultants in the implementation of the process.


Download data is not yet available.


Allred, A., Addams, H.L. and Chakroborty, G., (2007). Is Informal Planning the Key to the Success of the Inc. 500?, Journal of Small Business Strategy, 18(1): 95-104.

Austin, J., H. Stevenson and J. Wei-Skillern (2006). Social and Commercial Entrepreneurship: Same, Different, or Both? Entrepreneurship Theory and Practice, 30(1): 1-22.

Barringer, B. R., (2009). Preparing Effective Business Plans: An Entrepreneurial Approach, Upper Saddle River, NJ: Pearson/Prentice Hall.

Block, B. (2009). Wal-Mart Scrutinizes Supply Chain Sustainability. Eye on Earth (World Watch Institute). Retrieved September 8, 2011 from http://www.worldwatch.org/node/6 200.

Chandler, G.N., DeTienne, D.R., McKelvie, A. and Mumford, T.V., (2011). Causation and Effectuation Processes: A Validation Study, Journal of Business Venturing, 26:375-390.

Cook, P. and Yamamoto, R., (2011). Inside the Mind of the Expert Entrepreneur: The Explorer's View of Strategy, Journal of Management and Strategy, 2(3):77-85.

Dew, N., Sarasvathy, S. D., Read, S. and Wiltbank, R., (2009). Affordable Loss: Behavioral Economic Aspects of the Plunge Decision, Strategic Entrepreneurship Journal, 3 (2): 105-126.

Elkington, J. (1999). Cannibals with Forks: The Triple Bottom Line of 21st Century Business Oxford, UK: Capstone.

Garz, H., Volk, C., Frank, K. (2007, February). What Really Counts - The Materiality of Extra-Financial Factors. Pan European Equity, Extra-Financial Research, WestLB AG.

Gibbs, D., (2009). Sustainability Entrepreneurs, Ecopreneurs and the Development of a Sustainable Economy. Greener Management International, Winter (55):63-78.

Hart, S.L., (2007). Capitalism at the Crossroads: Aligning Business, Earth and Humanity (2nd edition), Upper Saddle River, NY: Wharton School Publishing.

Hawken, P., Lovins, A., Lovins, L.H., (1999). Natural Capitalism: Creating the Next Industrial Revolution, New York:Little Brown.

Hitchcock, D., & Willard, M. (2008). The Step-by-Step Guide to Sustainability Planning, London, UK: Earthscan Publishing.

Hockerts, K. and Wustenhagen, R., (2010). Greening Goliaths Versus Emerging Davids -- Theorizing about the Role of Incumbents and New Entrants in Sustainable Entrepreneurship. Journal of Business Venturing, 25: 481-492.

Hodges, H. E. and Kent., T.W. (2007). Impact of Planning and Control Sophistication in Small Business, Journal of Small Business Strategy, 17(2):75-87.

Keifer, C.F., Schlesinger, L.A., and Brown, P.B., (2010). Action is Everything: Creating What You Want in an Uncertain World, Duxbury, MA.: Black Ink Press.

Kiernan, M.J. (1993). The new strategic architecture: learning to compete in the twenty-first century, Academy of Management Executive, 7(1):7-21.

Knight, F. H. (1921). Risk, Uncertainty and Profit. Boston, MA, Hart, Schaffner, & Marx; Houghten Mifflin Co.

Mintzberg, H. (1987). Crafting strategy, Harvard Business Review, July.

O'Neill Jr., G.D., Hershauer, J.C., and Golden, J.S. (2009). The Cultural Context of Sustainability Entrepreneurship. Greener Management International, Winter (55): 33-46.

O'Shannassy, T. and Hunter, P., (2009). A Management Consultant's Guide to How Strategic Architecture can Improve an Organization's 'Bottom Line', Singapore Management Review, 31(1):33-47.

Prahalad, C.K. and Hamel, G. (1990). The Core Competence of the Corporation, Harvard Business Review, May/June.

Quinn, J. B. (1980). Strategies for Change: Logical Incrementalism, Irwin.

Roberts, B. H.,(2009). Building a framework for strategic architecture to foster the development of industrial ecology, Progress in Industrial Ecology, 5:482.

Robinson, R. B. and Pearce, J. A.(1984). Research Thrusts in Small Business Strategic Planning, Academy of Management Review, 9 (1):1-20.

Sahlman, W.A. (1997). How to Write a Great Business Plan, Harvard Business Review, July-August, 98- 108.

Sarasvathy, S. D. (2001). Causation and effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency. The Academy of Management Review, 26(2): 243--263.

Sarasvathy, S. D., Dew, N., Read, S. and Wiltbank, R. (2001). Effectual Entrepreneurship Expertise: Existence and Bounds, Academy of Management Journal. 44.

Sarasvathy, S. D. (2008). Effectuation, Elements of Entrepreneurial Expertise. Northhampton, MA: Edward Elger Publishing.

Schick, H., Marxen, S., and Freimann, J. (2002). Sustainability Issues for Start-up Entrepreneurs, Greener Management International. Summer (38): 235-251.

Schlange, L.E. (2009). Stakeholder Identification in Sustainability Entrepreneurship: The Role of Managerial and Organisational Cognition, Greener Management International. Winter (55): 13-32.

Simon, H. A. (1997). Models of Bounded Rationality Volume 3 Empirically Grounded Economic Reason. Cambridge, MA and London: MIT Press.
How to Cite
GRIMM, Richard C.. Effectuation: An Alternative Approach for Developing Sustainability Architecture in Small Business. Journal of Small Business Strategy, [S.l.], v. 23, n. 1, p. 55-70, jan. 2013. ISSN 2380-1751. Available at: <https://libjournals.mtsu.edu/index.php/jsbs/article/view/168>. Date accessed: 22 apr. 2019.