Effectuation as an action theory for complex domains

I think, approaching effectuation as an action theory/logic for complex domains is more appropriate than viewing it as the possession of a so-called expert entrepreneur.( I have tweeted about this topic earlier/ also blogged)

Following are some reasons; 

Firstly, I think most of the effectuation principles are universal and have corresponding concepts from complexity science(Acting by using Phase space disposition, Adjacent Possible, Co-evolutionary potential, Emergent property, Generative emergence, etc). The beauty of effectuation is that Saraswathy in her scientific study brilliantly identified and encapsulated all complexity principles and made them accessible to potential entrepreneurs. Thus, I believe, using it as a complexity-based concept may improve the potential of the concept.

Secondly, many scholars may argue that entrepreneurship is a low validity domain(Kahneman and Klein, 2009). To have genuine expertise to develop, the domains must be of high validity. i.e. “Skilled intuitions will only develop in an environment of sufficient regularity, which provides valid cues to the situation”(Kahneman and Klein, 2009). Thus I argue that approaching effectuations principles as products of “expertise” is the wrong way to interpret the study and the theory. To me, It was the other way around, ie. while studying expert entrepreneurs, Saraswati inadvertently discovered the universal laws for operating in low validity, complex uncertain domains; where expert intuitions is not possible because of features like emergent property that can transform the environment, breaking the expertise law of sufficient regularity.

Thirdly, complex domains like entrepreneurship are subjected to various complexity laws like power laws, Mathew effects, reputation effects, ecosystem-embedded-preferential-attachment, etc. This may prevent us from establishing any valid causal relationship between expertise and performance in a domain like entrepreneurship. Thus in complexity, high performance may not guarantee success, in that, the success of an individual does not depend uniquely on the quality of performance(Barabási, 2018; Barabási and Musciotto, 2019; Yucesoy and Barabási, 2016). 

Fourthly, Saraswathy(2008) defined an expert as ‘someone who has attained a high level of performance in the domain as a result of years of experience’ (Foley and Hart, 1992) and deliberate practice (Ericsson et al., 1993). But in recent scholarly works, it has been observed that deliberate practice may not guarantee better performance in extremely complex domains. A 2014 meta-analysis(Macnamara et al, 2014) has shown that deliberate practice only explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions. This further demonstrates a low correlation of deliberate practice to performance in complex unstructured domains.

Fifthly, I believe that, like the personality view of entrepreneurial achievement(McClelland,1951, 1961; Llewellyn and Wilson, 2003), the expertise view may also have some unintended counter-productive effects. It can legitimize the hubris among successful entrepreneurs, and at the same time make the aspiring entrepreneur think that he may require deliberate practice to become a successful entrepreneur, while in-fact success could be the result of complexity-effects like power laws, Mathew effects, reputation effects, preferential attachment, etc. In fact complexity can make Big-head(meme silicon-valley Tv show) the king

Finally, I believe that effectuation is widely applicable in other domains. It has application in complex domains like education, learning, economics, politics, etc. Framing effectuation as a science of action in social complexity will open up a lot of possibilities. This also will make the theory more robust and useful, building upon on theories and methods from the natural sciences and complex systems.

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