Belarusian Economic Research and Outreach Center

Effectuation Processes, Gender, Innovativeness and Performance of SMEs: case of Belarus

Entrepreneurial actions are based on certain principles and prevailing decision-making logic. Effectual and causal reasoning are considered to be among the essential tools explaining the entrepreneurial strategy and outcomes. The present research explores the link between the applied effectuation principles, gender of the leader and SMEs financial and innovative functioning. Using the data on 407 SMEs, a number of hypotheses is tested. The obtained results show (1) positive impact of the effectual reasoning on the knowledge transfer and the innovative outcomes of SMEs; (2) on contrary, causal rationality negatively affects the implementation of incremental novelty. Consistent with existing literature, the results show that combined usage of causal and effectual logics can be both beneficial and harmful. The findings also clearly indicate women being more prone to the hybrid decision-making strategy than men.