Effectual entrepreneurship, ethics and suboptimal service designs

Abstract

Purpose This study aims to respond to repeated calls for more process-focused research on effectual entrepreneurship. It illustrates how effectuation takes place, particularly through gaining the commitment of actors with diverse resources, knowledge and needs in a context characterized by power disparities. It illuminates the ethical concerns faced by effectual entrepreneurs and the impact these concerns could have on the service design. Design/methodology/approach The qualitative investigation involved in-depth interviews with 30 intercultural trainers-entrepreneurs delivering repatriation training in the context of international assignments. The authors supplemented primary data with the analysis of training and promotional materials. Findings The authors identify four key elements of the effectual process, in which entrepreneurs aim to elicit commitment while reconciling potentially conflicting demands of the actors involved: surfacing needs; value framing; co-creation; and joint affordable loss. The authors show how the acquisition of commitment has a consequential impact on subsequent steps of effectual entrepreneurship. The authors highlight how the interdependence of entrepreneurs, their services, clients and end-users impacts the availability of means and goals. More importantly, the authors also demonstrate how resource dependence, knowledge disparities and power imbalance between actors partaking in effectual entrepreneurship can lead to numerous ethical concerns and result in suboptimal service designs. Originality/value This study demonstrates the dark side of effectual entrepreneurship in a resource-constrained environment. The authors show how power disparities and resource-dependence can lead to ethical dilemmas and inferior service designs, where entrepreneurs follow the lead of influential and resource-abundant stakeholders at the expense of the end-users.