Past Career in Future Thinking: How Career Management Practices Shape Entrepreneurial Decision Making

• Author: Elco van Burg,Emma Kleijn,Yuval Engel,Svetlana N. Khapova
• DOI: http://doi.org/10.1002/sej.1243
• Published date: 01 June 2017
• Date: 01 June 2017

PAST CAREER IN FUTURE THINKING: HOW CAREER

MANAGEMENT PRACTICES SHAPE

ENTREPRENEURIAL DECISION MAKING

YUVAL ENGEL,

1

*ELCO VAN BURG,

2

EMMA KLEIJN,

2

and

SVETLANA N. KHAPOVA

2

1

University of Amsterdam, Amsterdam, The Netherlands

2

VU University Amsterdam, Amsterdam, The Netherlands

Research Summary: This study builds a grounded model of how careers shape entre-

preneurs’preferences for causal and effectual decision logics when starting new ven-

tures. Using both verbal protocol analysis and interviews, we adopt a qualitative

research approach to induct career management practices germane to entrepreneurial

decision making. Based on our empirical findings, we develop a model conceptualizing

how configurations of career management practices, reflecting different emphases on

career planning and career investment, are linked to entrepreneurial decision making

through the imprint that they leave on one’s view of the future, generating a tendency

toward predictive and/or creative control. These findings extend effectuation theorizing

by reformulating one of its most pervasive assumptions and showing how careers pro-

duce distinct pathways to entrepreneurial thinking, even prior to entrepreneurial entry.

Managerial Summary: Treating your own career as a start-up impacts how you make

decisions when actually becoming an entrepreneur. Based on empirical findings, we

explain why and how sets of career management practices are distinctively linked to

the use of different logics when making entrepreneurial decisions. Individuals who

throughout their careers have emphasized investments in skills and networks over

efforts to forecast and plan develop a general view of the future in which creative con-

trol dominates predictive control. The opposite is true for those who rely on managing

their careers through planning but remain passive in their career investments.

Upon entry to entrepreneurship, these differences become relevant such that some

entrepreneurs rely on attempts to predict the future while others actively try to create

it. © 2016 The Authors. Strategic Entrepreneurship Journal published by Strategic

Management Society.

‘In my career, I hadn’t really thought of

myself as an entrepreneur, but I had thought

that I was responsible for myself. So in a

sense, I had the thought that I’m the owner of

my own business, and being the owner of

yourself, it’s how do you invest in yourself,

how do you take responsibility for being bet-

ter […]? I hadn’t thought that the skill set of

entrepreneurs, when I was going through as

an employee, was the skills that I need. It was

only later, when I started doing entrepreneur-

ship, that I realized that those skills were the

precise skills that would enable me to invest

in myself and help me both create the future

and adapt to the future.’

–Reid Hoffman, Founder of PayPal and

LinkedIn

Keywords: career; career management practices; entrepreneur-

ial decision making; effectuation; causation

*Correspondence to: Yuval Engel, University of Amsterdam,

Plantage Muidergracht 12, 1018 TV, Amsterdam, The Nether-

lands. E-mail: y.engel@uva.nl

© 2016 The Authors. Strategic Entrepreneurship Journal published by Strategic Management Society.

This is an open access article under the terms of the Creative Commons Attribution License, which permits

use, distribution and reproduction in any medium, provided the original work is properly cited.

Strategic Entrepreneurship Journal

Strat. Entrepreneurship J, 11: 122–144 (2017)

Published online 31 January 2017 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej.1243

INTRODUCTION

When starting a new venture, entrepreneurs are

confronted with decisions that can define and shape

their venture’s evolution (Aldrich, 1999). Studying

the nature of cognitive differences in approaching

these decisions is therefore essential for entrepreneur-

ship research (Grégoire, Corbett, and McMullen,

2011; Shepherd, Williams, and Patzelt, 2015). Scho-

lars have made significant progress in this regard by

identifying and distinguishing between two decision-

making logics that are commonly applied in entre-

preneurial settings: causation and effectuation

(Sarasvathy, 2001). This growing stream of research

draws much legitimacy from an influential proposi-

tion and the persistent finding that experts—defined

as highly experienced entrepreneurs—predominantly

rely on effectuation when confronted by uncertainty

(Dew et al., 2009). In other words, an extensive

career in starting and operating new ventures is

argued to shape how entrepreneurs process informa-

tion, reason, and make decisions.

However, mounting evidence shows that nonex-

perts, and even novice entrepreneurs, also often rely

on effectuation (Brettel et al., 2012; Engel et al.,

2014). Even when we accept that ‘the relationship

between entrepreneurial experience and the

increased use of effectual logic is strong and signifi-

cant’(Sarasvathy, 2012: 7), we are left to wonder

what shapes the use of effectuation among entrepre-

neurs without prior entrepreneurial experience. In

short, because direct founding experience is either

missing or completely absent for most entrepreneurs

(Sørensen and Fassiotto, 2011), theory provides a

useful but incomplete answer to the question that

we explore in this study: how careers shape entre-

preneurial decision making.

We, therefore, aim to extend effectuation theory

by challenging and refining one of its most dominant

assumptions—that career experience exclusively

refers to experience as an entrepreneur (Sarasvathy,

2008). Instead, we initially build on a broader socio-

logical perspective of careers by acknowledging that

career histories, even prior to entrepreneurial entry,

generate qualitative differences in how individuals

engage in entrepreneurial tasks (e.g., Burton,

Sørensen, and Dobrev, 2016; Sørensen and Fas-

siotto, 2011). We then further distinguish our

approach by augmenting the perspective of entrepre-

neurs as ‘organizational products’(Freeman, 1986)

with the recognition that individuals are also ‘agents

of their career destinies’(Inkson and Baruch, 2008:

217), that is: the capacity to engage in career man-

agement practices over time (Arthur, 2014; King,

2004; Tams and Arthur, 2010). Inspired by these

insights from contemporary career theory, we use

in-depth interviews and verbal protocol analysis

with 28 Dutch entrepreneurs to induct a set of career

management practices (e.g., DiRenzo and Green-

haus, 2011; King, 2004) that, at first, do not seem to

be tied to the task of establishing new ventures but

rather become such if and when entrepreneurship is

initiated (Aldrich and Yang, 2013). Subsequently,

we develop an empirically grounded model that

depicts the relationship between career management

practices and entrepreneurial decision making.

This study makes several important contributions.

First, we address the question of how entrepreneurs

obtain their cognitive structures (Mitchell et al.,

2007) from a novel career perspective (Burton et al.,

2016). Thus, this study advances an important exten-

sion to effectuationtheory (Read et al., 2016; Sarasv-

athy, 2001) and broadens our knowledge on the

antecedents of entrepreneurial decision making. Fur-

thermore, we respond to calls to study the origins of

entrepreneurial cognition (Grégoire et al., 2011).

Unlike previous efforts to bring the notion of a career

into entrepreneurship research by focusing on careers

as merely a succession of jobs or as a source of

human and social capital (e.g., Davidsson and Honig,

2003; Sørensen and Fassiotto, 2011), our study is

unique because we focus on career management

practices as a relevant feature of what individuals do

with their working lives and how they bring such

practices to bear on the entrepreneurial process.

THEORETICAL BACKGROUND

Because this study aims to build a grounded theory

that extends effectuation theory, we initially offer a

brief overview of the relevant literature. Next, we

introduce research on contemporary careers, which

provides the background for inductively developing

theory about how careers shape entrepreneurs’pre-

ferences for causal and effectual decision logics.

Causation and effectuation: entrepreneurial

decision-making logics

In interpreting her groundbreaking study of expert

entrepreneurs, Sarasvathy (2001) defines two dis-

tinctive types of decision-making logics—namely,

Past Career in Future Thinking 123

© 2016 The Authors. Strategic Entrepreneurship Journal published by Strategic Management Society. Strat. Entrepreneurship J, 11: 122–144 (2017)

DOI: 10.1002/sej