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Entrepreneurial logics have emerged as a new theoretical perspective to explain entrepreneurial decision-making in contexts of uncertainty and resource scarcity. The causation logic is best expressed by economic thinking, which stresses planning, control, and rationality. On the other hand, noneconomic thinking emphasizes flexibility, improvisation, and collaborative decision-making which mirrors the effectuation logic or bricolage. The causation logic suggests to take a particular effect as a given and to focus on selecting between means to create that effect (Sarasvathy, 2001). Effectuation logic instead takes the set of means as given and the focus is on the selection of possible effects that can be created with that set of means (Sarasvathy, 2001), similarly to the bricolage logic - “making do by applying combinations of resources at hand to new problems and opportunities” (Baker & Nelson, 2005, p. 33).
Decision-making in an international context is inherently characterized by uncertainty or risk, exacerbated in the case of resource-scarce SMEs where missteps in the international arena may threaten survival and growth. Therefore, the objective of this paper is to take stock of extant knowledge about the role of causation, effectuation, and bricolage in foreign market entry decisions, and in particular the choice of entry modes. Entry mode decisions are considered a ‘frontier issue’ (Anderson & Gatignon, 1986) in International Business and International Marketing as they determine future success in foreign markets.
The literature review is performed in two stages: In the first stage, the role and key dimensions of causation, effectuation, and bricolage logics in the general context of internationalization are identified. In the second stage, a systematic review of experimental design studies traces their impact on entry mode decisions.
The given study bridges entrepreneurship and international business studies to contribute to the understanding of the nature of three different logics, and their roles in a key area of international business. Beyond effectuation and causation, it is included bricolage, a neglected logic in scholarly work, to illustrate when and why they come into play, and how they display in entry mode decision-making.