Research on the effect of effectuation on innovation of new technology ventures

Abstract

Abstract: China is in a critical stage of economic transformation and upgrading, and technological innovation is an important means of industrial upgrading. New technology ventures are effective carriers to accelerate the transformation of scientific and technological achievements, promote industrial transformation and upgrading, and realize technological innovation. However, new technology ventures face high environmental uncertainty and resource constraints, which seriously hinder the promotion of innovation activities. How to deal with these problems effectively and make rational innovation decisions to improve innovation performance has become the key to promote the development of new technology ventures. Effectuation provides a new way of thinking for decision-making in uncertain environment. It describes how to think, make decisions and practice under uncertainty, including a series of principles such as flexibility, affordable loss, previous commitment and experiment.However, there is no consistent conclusion on the effect of effectuation on the innovation performance. It needs further study. Does effectuation have an inconsistent effect on the innovation speed and innovation quality of new technology ventures? Does effectuation work differently in different market environments? What are the internal conditions for the effective application of effectuation? Based on the above problems, this paper constructs a theoretical framework to explore the different effects of effectuation on the innovation speed and innovation quality of new technology ventures, and also considers the moderating effect of the external market dynamism and the internal absorptive capacity of enterprises.This study collected data through questionnaires, and collected 162 valid questionnaires through surveys of new technology ventures in Sichuan, Chongqing, Hunan and Jiangsu. Through data analysis, it is obtained that: (1) effectuation has a significant positive effect on the innovation speed of new technology ventures; (2) there is a significant inverted U-shaped relationship between effectuation and innovation quality of new technology ventures; (3) in the environment of high market dynamism, effectuation has a stronger positive effect on the innovation speed, and the inverted U-shaped relationship between effectuation and innovation quality is stronger; (4) the stronger the absorptive capacity of enterprises, the stronger the positive effect of effectuation and innovation speed; and (5) when both market dynamism and corporate absorptive capacity are high, effectuation has the strongest positive effect on innovation quality.This paper expands the study of effectuation and innovation. In the past, the research on effectuation and innovation did not get a consistent conclusion. This study divides the innovation performance into two dimensions of innovation speed and innovation quality, and found a way to reconcile existing conflicts. Besides, in the past, the literatures mainly considered the moderating effect of external environmental uncertainty on effectuation and innovation, ignored the internal conditions of utilizing effectuation, and this study considers the moderating effect of external market dynamism and internal absorptive capacity, and expands the boundary conditions for utilizing effectuation.Practically，the results of this study have important implications for the innovation of new technology ventures. Firstly, this study confirms the positive effect of effectuation on the innovation of new technology ventures, they should create a free, open and inclusive enterprise atmosphere, for utilizing effectuation to provide a good environment. Secondly, decision makers should use effectuation rationally according to the strategic needs of enterprises. If the enterprise pays more attention to the innovation speed, it needs to follow the effectuation more; if they pay more attention to the innovation quality, they should also pay attention to avoid the negative effect of over-effectuation while utilizing effectuation to improve the innovation quality. Then, decision makers should make reasonable use of effectuation at the different stages of entrepreneurship. Finally, while utilizing effectuation to improve the innovation performance in highly uncertain environment, they should also pay attention to improve the absorptive capacity of enterprises, so that the effect of effectuation will be better.

Key words: effectuation, new technology venture, innovation speed, innovation quality

Chen Xiaohong, Deng Quanlin, Guan Jian. Research on the effect of effectuation on innovation of new technology ventures[J]. Science Research Management, 2022, 43(12): 69-78.

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