EFFECTUATION Meaning and
Definition
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Effectuation is a concept that refers to a decision-making process used primarily in entrepreneurial contexts. It describes a method of approaching the execution of an idea or goal by focusing on available means and constraints, rather than predetermined goals or objectives. This process involves taking calculated steps based on immediate resources, personal expertise, and existing social networks to bring about desired outcomes.
In effectuation, entrepreneurs rely on a set of principles to guide their decision-making. These principles include means-driven action, also known as "bird-in-hand," which encourages utilizing one's existing resources to create opportunities rather than waiting for ideal conditions. Another principle is affordable loss, where entrepreneurs take calculated risks knowing that the potential loss is acceptable and would not jeopardize their overall well-being.
Additionally, effectuation involves the principle of leveraging contingencies, whereby entrepreneurs leverage unexpected events as potential opportunities rather than viewing them as obstacles. It emphasizes building partnerships and collaborations with stakeholders who are committed to the shared vision, known as the principle of partnership.
Overall, effectuation is a strategic approach to decision-making that focuses on taking immediate action based on available means, exploiting contingencies, and building collaborative relationships. It aims to create new possibilities and capitalize on existing resources, ultimately leading to the achievement of entrepreneurial goals.
Common Misspellings for EFFECTUATION
Etymology of EFFECTUATION
The word "effectuation" is derived from the verb "effectuate", which came into the English language in the early 17th century from the Latin word "effectuatus". "Effectuatus" is the past participle of "effectuare", which means "to bring about" or "to accomplish" in Latin. In turn, "effectuare" is derived from the noun "effectus", meaning "effect" or "accomplishment". Ultimately, the Latin word "effectus" is derived from the verb "facere", meaning "to make" or "to do". Therefore, the etymology of the word "effectuation" can be traced back to Latin and the concept of bringing about or accomplishing something.
Similar spelling words for EFFECTUATION
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