International Journal of Management Reviews, Vol.

0, 1–28 (2019)
DOI: 10.1111/ijmr.12194

Formation and Constitution of Effectual

Networks: A Systematic Review and
Synthesis
Jon Kerr and Nicole Coviello1
York University, 4700 Keele Street, Toronto, Ontario, M3J 1P3, Canada 1 Wilfrid Laurier University, 75 University
Avenue West, Waterloo, Ontario, N2L 3C5, Canada
Corresponding author email: jonkerr@yorku.ca

The co-creational processes of effectuation represent an important development in

understanding of entrepreneurial action. They also manifest in networks that are them-
selves important artefactual outcomes of effectual processes. To synthesize research
connecting effectuation to the networks involved, this paper offers a systematic litera-
ture review. Following recent theorizing, the authors organize the literature around two
general themes: (1) why and how network development occurs; and (2) what network
develops. The resultant thematic model offers a comprehensive perspective on network
development under effectuation logic. The analysis identifies that understanding of ef-
fectual networking and effectual networks is fragmented, incomplete and constrained by
a lack of construct and contextual clarity. The authors present alternative perspectives
on constructs and assumptions surrounding networks in effectuation, integrate network
theory into effectuation, and generate important trajectories for future research.

Introduction on variance rather than process-based theorizing

Effectuation is ‘one of the most compelling con-
temporary theories of entrepreneurial behavior’
(McKelvie et al. 2011, p. 286). Induced through
studies of expert entrepreneurs, it provides an ex-
planation for entrepreneurial action under conditions
of uncertainty (Sarasvathy 2008). As an alternative
to predominant explanations, effectuation logic has
become foundational to research and discourse in
entrepreneurship (e.g. Reymen et al. 2015; Welter
and Kim 2018) and is applied across a range of
management-related fields (e.g. Blauth et al. 2014;
Coviello and Joseph 2012). Yet years beyond Saras-
vathy’s (2001) seminal work, debate surrounds the
theory’s state of development (see Arend et al. 2016;
Read et al. 2016; Welter et al. 2016). One concern
is that effectuation research has moved little beyond
the level of the individual to delve into the network
of external parties involved in the co-creation of
opportunities (Arend et al. 2015; Reuber et al. 2016).
Progress also appears hindered by an emphasis
(Garud and Gehman 2016; Gupta et al. 2016). We
highlight these concerns because effectuation entails
process-based interactions involving multiple actors:
interactions that manifest in networks.
In effectuation, entrepreneurs do not search for
opportunities in the traditional sense. Instead, they
engage in an iterative process where the transfor-
mational boundaries of any new artefact (e.g. new
product) are refined through interactions with other
actors and commitments they might make towards:
(i) the emerging artefact; and (ii) the ‘effectual net-
work’ (Sarasvathy 2008). Networks then become ob-
jectified as a product of relational interactions and
are themselves artefactual outcomes of effectual pro-
cesses. However, networks that develop under effec-
tuation may exhibit observable differences relative
to more familiar transactional networks (Sarasvathy
and Dew 2003). Recent theorizing also emphasizes
that an understanding of what network develops may
be incomplete without understanding why and how
development occurs (Ahuja et al. 2012; Slotte-Kock


C 2019 British Academy of Management and John Wiley & Sons Ltd. Published by John Wiley & Sons Ltd, 9600 Garsington
Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
2 J. Kerr and N. Coviello
and Coviello, 2010). This is important to both ef-
fectuation and network theory because predominant
deterministic explanations surrounding network de-
velopment may break down under the conditions of
uncertainty and ambiguity characteristic of the effec-
tual problem space (Engel et al. 2017; Sarasvathy and
Dew 2005). This leads us to question: What networks
develop under effectuation and why and how does
that development occur?
In this study, we identify and synthesize extant re-
search that links effectuation to networks, organizing
the literature around both developmental processes
and outcomes. To inform our work, we also draw
on reviews from entrepreneurship pertinent to net-
works (e.g. Hoang and Antoncic 2003; Slotte-Kock
and Coviello 2010) and the broader, more mature net-
work literature (e.g. Burt 1992; Granovetter 1973).
Our synthesis is integral to theorizing (Weick 1995)
and we contribute in several ways. First, we unpack
micro-level processes of network development and
construct a thematic model that organizes the litera-
ture, offers a contextualized perspective on network
development, and provides a foundation for future
research. Second, we challenge constructs, contex-
tual boundaries and assumptions to suggest that, for
example, ideas and process goals are important con-
siderations in effectual networking. Finally, our study
identifies and assesses what is (not) known about the
resultant networks and integrates network theory into
effectuation to understand the effectual character of
networks. We begin, however, by considering effec-
tuation, networks and context. We then attend to our
method, findings, reflections on the literature, and new
avenues for study.
On effectuation, networks and context
Effectuation is a decision-making logic focusing
on the effects that can be created from a given
set of means (Sarasvathy 2001). In explaining
entrepreneurial action, it lies juxtaposed to the ends-
driven logic (i.e. ‘causation’) that has dominated
theorizing in entrepreneurship (Sarasvathy 2008).
Sarasvathy (2001, p. 245) uses a simple illustrative
analogy: in causation, a chef identifies a menu
and shops for the needed ingredients to create the
desired effect; in effectuation, the chef searches the
cupboards and prepares dinner based on the means
available. Although effectuation and causation are
both integral parts of human reasoning and can
occur ‘simultaneously, overlapping and intertwining’

C 2019 British Academy of Management and John Wiley & Sons Ltd.
(Sarasvathy 2001, p. 245), each is linked in theory
to more contextualized views of entrepreneurship in
line with, for example, Welter (2011) and Zahra et al.
(2014). In particular, effectuation logic guides action
in contexts of uncertainty where ‘predictability,
pre-existing goals and an independent environment
are not available to the decision maker’ (Steyaert
2007, p. 466). This is important because uncertainty
is central to most theories of entrepreneurial action
(McMullen and Shepherd 2006). In contrast, pre-
dominant explanations tend to convey sufficiently
stable environments where goals for realizing
exogenous opportunities can be well ordered and risk
approached through predictive and planned strategies
(Alvarez and Barney 2007; Welter et al. 2016).
When futures are unpredictable, effectuation logic
represents an intendedly rational, rule-directed way of
proceeding (Lerner et al. 2018). Its principles convey
that effectual processes are: (i) driven by the means
available to an entrepreneur (who she is, what she
knows, who she knows) rather than predictable ends;
(ii) built on a philosophy of partnership and precom-
mitments; (iii) focused on human agency co-creating
opportunities; (iv) characterized by experimentation
within the constraints of what one can afford to lose;
and (v) flexible enough to embrace contingencies.
While these principles represent an internally con-
sistent set of heuristics (Sarasvathy 2008), they also
reflect unique sub-dimensions that may not always
be highly correlated (Chandler et al. 2011; DeTienne
and Chandler 2010). There is also some question as
to whether these heuristics are necessary boundary
conditions for effectuation (Welter et al. 2016). Our
analysis of past research (e.g. Reymen et al. 2015)
suggests that, while individual decisions are deemed
‘effectual’ without adherence to all effectual prin-
ciples, evidence of each principle tends to exist in
longitudinal studies of effectual processes.
Central to effectuation – and our interest with this
paper – is the philosophy of partnership and precom-
mitments. This ‘crazy quilt’ principle calls for stitch-
ing together a network of self-selecting stakeholders
as a way to reduce uncertainty (Sarasvathy 2001). As
such, effectual processes are embedded not only in a
network but also, following from Aldrich and Zimmer
(1986), an evolving social context. While not unique
to effectuation, the development and nature of net-
works under effectuation may differ from networks in
entrepreneurship more generally (Engel et al.
2017; Sarasvathy and Dew 2005). This leads us
to suggest that the robust literature on networks
in entrepreneurship provides a useful backdrop
Constitution of Effectual Networks
Figure 1. Comparative analytical framework
against which our understanding of networks in
effectuation can be assessed. Research on networks
in entrepreneurship has been an important line of
inquiry for approximately thirty years and in reviews
of that literature (e.g. Hoang and Antoncic 2003;
Hoang and Yi 2015), three major themes emerge
pertinent to processes and outcomes (see Figure 1).
If we first consider why networks develop, ex-
planations generally adopt causal language wherein
entrepreneurs strategically pursue network connec-
tions (ties) to secure the resources required to achieve
predefined goals (Porter and Woo 2015; Stuart and
Sorenson 2007; Sullivan and Ford 2014). A general
premise is that these critical resources are identifiable
and ‘define the essential relationships that must be
forged and maintained’ (Larson and Starr 1993, p.
8). As rational, self-interested actors, entrepreneurs
seek to enact social structures to their benefit (Burt
1992; Emirbayer and Mische 1998) and lever their
social capital (De Carolis and Saparito 2006; Stam
et al. 2014). It is the possibility of accessing resources
and other benefits that serves as principle motivation
(Rauch et al. 2016; Shaw 2006). If resource needs
change over time, networks are adapted accordingly
(Greve and Salaff 2003).
Turning to how entrepreneurial networks develop,
research streams are varied. One approach depicts
network development as an event sequence in line
with Van de Ven (1992). Network process models
generally convey that, as a venture moves through
a life cycle, its network changes through the iden-
tification, negotiation, selection, expansion and de-
activation of ties occurring sequentially, iteratively
or simultaneously (e.g. Hite 2005; Larson and Starr
1993; Slotte-Kock and Coviello 2010). Finer-grained
studies of networking behavior suggest entrepreneurs
rely on a range of networking strategies, actions and
styles (e.g. Hallén and Eisenhardt 2012; Zott and Huy
2007). This includes stories they tell about the en-
deavor and how stakeholders might be linked through
goals and actions (Nagy et al. 2012). Network re-

C 2019 British Academy of Management and John Wiley & Sons Ltd.
3
search also identifies certain mechanisms that shape
network development, including, for example, inertial
forces (Kim et al. 2006), opportunities such as prox-
imity or referrals (Gulati and Gargiulo 1999; Rivera
et al. 2010), and homophily (Lazarsfeld and Merton
1954). Other considerations include an entrepreneur’s
social skills (Lans et al. 2015), passion (Ho and Pol-
lack 2014) and desire for control (Burt 1992). Impor-
tant here is that, within certain bounds, entrepreneurs
are thoughtful and active agents of network change
(Gulati and Srivastava 2014).
Finally, in terms of what network develops, we
know from the network literature outside effectuation
that structural, relational and nodal characteristics
are important considerations (Hoang and Yi 2015).
Structure is generally viewed from the perspective
of a focal entrepreneur (i.e. ‘ego’) and their position
in a network of relationships (Gulati et al. 2000).
While many structural elements exist, size, central-
ity, tie strength and structural holes are emphasized
in entrepreneurship research (see supplementary Ap-
pendix S1). Relational elements pertain to the content
of exchange between actors in a network, such as re-
sources, information and emotional support. Such ex-
change is dependent, however, on certain governance
mechanisms, including trust, social mechanisms (e.g.
power) and legal contracts. Lastly, nodal elements re-
fer to characteristics that inhere in entrepreneurial ac-
tors and may include, for example, cognition or social
competence. As we move forward, we will consider
each of these elements in terms of networks that de-
velop under effectuation.
Collectively, while previous studies provide oppor-
tunity for both temporal and topical contextualiza-
tion of network research as per Parkhe et al. (2006),
there is generally limited attention paid to the con-
text within which the entrepreneurial activity occurs
(Brännback and Carsrud 2016; Zahra et al. 2014) –
context being the ‘circumstances, conditions, situa-
tions, or environments that are external to the re-
spective phenomenon’ (Welter 2011, p. 167). This
4 J. Kerr and N. Coviello
is problematic because ‘considering context could
guide theory building and enhance our theories’ pre-
dictive powers’ (Zahra and Wright 2011, p. 72). For
example, the network literature conveys general as-
sumptions of predictable environments facilitating
goal-directed behavior (Ebbers 2014; Porter and Woo
2015), but deterministic explanations may not hold
under the uncertainty and ambiguity of the effectual
problem space (Sarasvathy 2008; Sarasvathy and Dew
2005). As an alternative explanation (and metaphori-
cally), effectuation encapsulates entrepreneurial acts
of creation beyond rational economic behavior. Con-
sequently, conscious of renewed calls to contextualize
entrepreneurship (Welter 2011; Zahra et al. 2014), we
set out to understand the why, how and what of net-
work development under effectuation. We now turn
to the method employed in our review and synthesis.
Method
Our systematic review and synthesis of the effectua-
tion literature employs a multi-stage strategy (Denyer
and Neely 2004; Tranfield et al. 2003). We focus
on peer-reviewed academic literature published since
Sarasvathy’s (2001) seminal article. Our attention to
peer-reviewed journal articles is because they are
considered to reflect validated knowledge (Podsakoff
et al. 2005). Two exceptions are Sarasvathy and Dew
(2003) and Sarasvathy (2008) as other foundational
works.
To identify articles, we began by considering only
those publications listed in the University of Texas
Dallas (UTD) journal ranking. This was the pilot
test of our protocol (Fink 2013). We then conducted
a more expansive search employing four electronic
databases: ProQuest ABI/Inform, EBSCOhost Busi-
ness Source Complete, JSTOR and Scholar’s Portal.
Based on a scoping review of the effectuation litera-
ture, we used the search terms effectual*/effectuation.
This process returned 4637 scholarly works with a
search term in the title, abstract or key word listing.
A review of abstracts eliminated most of these arti-
cles as irrelevant (e.g. CO2 abatement) or not from an
English-language publication (a practical exclusion).
With the additional elimination of redundancies be-
tween databases, our initial screening yielded 232
unique articles for more detailed consideration.
The second stage involved: (i) searching within
each article using the terms effectua*, network*,
stakehold*, partner*, customer*, invest* and inter-
act* (terms identified through the scoping review);

C 2019 British Academy of Management and John Wiley & Sons Ltd.
and (ii) interpreting the narrative within which each
of these terms was used. Exclusion criteria were de-
veloped iteratively as we progressed. Papers were ex-
cluded if they made only passing reference to ef-
fectuation theory, if the connection between effec-
tuation and network processes or outcomes was not
sufficiently clear, or if the focus of the study was
not small or nascent firms (i.e. we exclude corpo-
rate entrepreneurship because it entails established
social systems (Floyd and Wooldridge 1999)). Fi-
nally, to ensure we assessed research of the highest
quality, we focused on 3- and 4-rated journals based
on the Chartered Association of Business Schools’
2015 Academic Journal Guide (AJG). This includes
the top eight journals in the field of entrepreneurship.
We benchmark against the AJG because it offers wide
journal coverage and high levels of internal and exter-
nal reliability (Morris et al. 2009). Our second stage
review eliminated 163 papers.
We then read each of the remaining 69 papers (43
empirical/26 conceptual). To facilitate analysis, we
developed a database and populated it with the follow-
ing information: (i) authors; (ii) location of lead au-
thor; (iii) year of publication; (iv) article title; (v) jour-
nal title; (vi) nature of paper; (vii) methodology; (viii)
core arguments; (ix) theoretical foundation; and (x)
insight(s) regarding network outcomes or processes.
We used this information as a basis for analysis with
the articles sourced from our first wave (UTD jour-
nals) being used to establish our initial coding. We
then proceeded to the data from the expanded search,
working to maintain the integrity of first-order terms
(Gioia et al. 2013).
In total, 202 coded insights were generated per-
taining to network outcomes and processes. These
first-order terms were consolidated into higher-order
themes in line with well-established protocols al-
lowing for iterative interpretation (reported later in
Tables 1–3). Our analysis involved a data-driven, in-
ductive approach (Boyatzis 1998; Guest et al. 2011),
but development of higher-order themes was guided
by the broader, more mature network literature in a de-
ductive manner (see for example, Crabtree and Miller
1999). That is, effectuation codes were sorted under
the themes identified in Figure 1 (illustrative exam-
ples below). Adopting a hybrid approach to theme
development (Fereday and Muir-Cochrane 2006) al-
lowed us to engage in a process analogous to Yin’s
(1984) notion of pattern-matching. Here, we pattern-
matched the effectuation literature to the broader net-
work literature to facilitate gap-spotting (Sandberg
and Alvesson 2011). We turn now to our results and

Table 1. Summary of insights surrounding why networks develop under effectuation
Themes from
entrepreneurial network
research (as per Figure 1)a
Environmental Context
• Predictable risk
Goals
• Specified and
C 2019 British Academy of Management and John Wiley & Sons Ltd.
well-ordered
Motivation to network
• Instrumental
(1° resource access)
a
Exemplars include Larson and Starr (1993), Davidsson and Honig, (2003), Stuart and Sorenson (2007), Sullivan and Ford (2014), Ebbers (2014) and Porter and Woo (2015).
Emergent themes from the effectuation literature
Second-order codes
(comprised of X
first-order codes) Examples of first-order codes
Environmental Uncertainty, unpredictable,
uncertainty (7) unknowable, no objective
opportunity, independent
environment unavailable,
uncertainty not perpetual
Environmental Information deficit, isotropy
isotropy (2)
Goal ambiguity (3) Goals not clarified, not predefined, ‘building relationships and bringing stakeholders on
not pre-envisioned
Idea sets (4) What can be done, possibilities
Motives (24) Reduce uncertainty, minimize
cost, experiment, maintain
flexibility, maximize means,
create shared vision, erect
barriers
Illustrative quotes
‘in uncertain environments, effectual reasoning . . .
construct a series of stakeholder commitments’
(Read et al., 2009b, p. 576)
‘at the beginning of the formation of a network,
actors simply cannot predict’ (Sarasvathy and Dew,
2005, p. 557)
‘effectuators act under conditions of information
deficit . . . ’ (Galkina and Chetty, 2015, p. 653)
board even before clarifying . . . goals for the
venture’ (Dew et al., 2009, p. 293)
‘actors imagine things they can accomplish’ (Wiltbank
et al., 2006, p. 991)
‘the effectuator uses precommitments to reduce
uncertainty, minimize cost of experimentation, and
maintain flexibility’ (Chandler et al. 2011,
p. 386)
‘an effectual approach . . . drives partnerships as the
central method to expand resources’ (Sarasvathy
et al. 2014, p. 74)
Examples of other sources addressing the second-order
code
Constitution of Effectual Networks
Sarasvathy (2001; 2008), Sarasvathy and Dew (2008a),
Wiltbank et al. (2006, 2009), Dew et al. (2008),
Chandler et al. (2011), Murnieks et al. (2011),
Galkina and Chetty (2015), Reymen et al. (2015),
Deligianni et al. (2017), Engel et al. (2017), Jiang
and Rüling (2017), Welter and Kim (2018)
Sarasvathy (2001, 2008), Sarasvathy and Dew (2005),
Kalinic et al. (2014)
Sarasvathy (2001; 2008), Dew et al. (2008), Sarasvathy
(2008), Wiltbank et al. (2009), Kalinic et al. (2014),
Galkina and Chetty (2015), Engel et al. (2017)
Sarasvathy and Dew (2003; 2005), Dew et al. (2008),
Sarasvathy (2008)
Wiltbank et al. (2006), Sarasvathy and Dew (2008a),
Corner and Ho (2010), Evers et al. (2012), Mort
et al. (2012), Andries et al. (2013), Gabrielsson and
Gabrielsson (2013), Berends et al. (2014), Pruthi
et al. (2014), Chetty et al. (2015), Galkina and Chetty
(2015), Deligianni et al. (2017), Cai et al. (2017),
Engel et al. (2017), Jiang and Rüling (2017)
5

Table 2. Summary of insights surrounding how networks develop under effectuation – process
Themes from
entrepreneurial
network research
(as per Figure 1)a
Identification of ties
• Strategic; based on
pre-established
criteria

Negotiation of ties
• Focused on the type
and quantity of
returns and how they
will be shared
C 2019 British Academy of Management and John Wiley & Sons Ltd.
Emergent themes from the effectuation literature
Second-order codes
(comprised of X
first-order codes)
Whom they know (11)
Contingent contacts (13)
Potential stakeholders
groups (18)
Stakeholder potentiality (7)
Sense-giving (10)
Content of negotiations (9)
Nature of negotiations (8)
Examples of first-order codes
Existing contacts, local
stakeholders, network
connections
Serendipity, random,
accidental,, unexpected
relations, new contacts
Friends, family, potential
customers, suppliers,
investors, partners,
competitors
Domain specific knowledge,
interest, willingness
Analogies, metaphors,
storytelling, scripts, pitches,
collaborative sense-making
Shape of pie, preferences,
control over process, control
over outcomes
Iterative, intra- and
inter-personal, aggressive, not
planned, non-linear, direct
Illustrative quotes
‘building on existing network of contacts
to identify/create opportunities’
(Reymen et al. 2015, p. 361)
‘actors get included in the entrepreneurial
development process serendipitously’
(Corner and Ho 2010, p. 649)
‘the people they talk with could be
potential stakeholders, friends, family,
or random people they meet in the
routines of their lives’ (Wiltbank et al.
2006, p. 992)
‘discussed with our earlier contacts who
knew people working in this field’
(Chetty et al. 2015, p. 1446)
‘they will . . . use analogies or metaphors
to articulate basic images or scenes of
both cause and effect, but with many
essential elements initially undefined’
(Cornelissen and Clarke 2010, p. 548)
‘negotiations . . . focused on the nature
and characteristics of the project . . .
rather than the type and quantity of
returns to the project’ (Dew et al. 2008,
p. 50)
‘effectuation involves a series of
negotiations . . . between players and
within players’ own preferences and
expectations’ (Sarasvathy and Dew
2008b, p. 241)
6
Examples of other sources addressing the
second-order code
Sarasvathy and Dew (2005), Fisher (2012),
Mort et al. (2012), Watson (2013),
Daniel et al. (2015), Maine et al. (2015),
Welter et al. (2016), Engel et al. (2017)
Augier and Sarasvathy (2004), Dew
(2009), Gabrielsson and Politis (2011),
Fisher (2012), Kalinic et al. (2014),
Galkina and Chetty (2015), Engel et al.
(2017)
Dew and Sarasvathy (2007), Chandler
et al. (2011), Read and Sarasvathy
(2012), Harmeling and Sarasvathy
(2013), Chetty et al (2015), Daniel et al.
(2015), Galkina and Chetty (2015),
Akemu et al. (2016), Engel et al. (2017)
Dew et al. (2008), Corner and Ho (2010),
Kalinic et al. (2014), Alsos et al. (2016)
Augier and Sarasvathy (2004), Chiasson
and Saunders (2005), Cornelissen et al.
(2012), Gabrielsson and Gabrielsson
(2013), Harmeling and Sarasvathy
(2013), Akemu et al. (2016), Jiang and
Rüling (2017)
Sarasvathy (2008), Sarasvathy and Dew
(2005; 2008a), Read and Sarasvathy
(2012), Jiang and Rüling (2017)
Sarasvathy (2008), Read and Sarasvathy
(2012), Galkina and Chetty (2015),
Jiang and Rüling (2017)
(Continued)
J. Kerr and N. Coviello

Table 2. Continued
Themes from
entrepreneurial
network research
(as per Figure 1)a
Selection of ties
• Rests with the
entrepreneur; based
on pre-established
criteria
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Deactivation of ties
• Occurs in the normal
course
a Exemplars include Dwyer et al. (1987), Larson and Starr (1993), Hite and Hesterly (2001), Davidsson and Honig, (2003), Hite (2005), Zott and Huy (2007), Jack et al. (2008; 2010), Slotte-Kock
and Coviello (2010), Vissa (2011; 2012), Hallén and Eisenhardt (2012) and McKeever et al. (2015).
Emergent themes from the effectuation literature
Second-order codes
(comprised of X
first-order codes)
Timing of negotiations (2)
Decision criteria (12)
Self-selection (6)
Nature of commitment (7)
Content of commitment (5)
Dis-engagement (3)
Examples of first-order codes
Rapid engagement, early
interactions
Opportunity, affordable loss,
preferences, aspirations,
alignment
Self-selection, intentional
agents, stakeholders’ choice
Credible commitment, stake
something, flexible, enduring,
to construction process
Ideas, solutions, idiosyncratic
knowledge, resources, time
Recede, exits, flexible relations
Illustrative quotes
‘an effectual approach calls for
entrepreneurs to rapidly engage in
conversations’ (Sarasvathy et al. 2014,
p. 74)
‘stakeholders put “skin in the game”
because they see opportunity in
co-creating the venture with the
entrepreneur’ (Sarasvathy et al. 2014, p.
74)
‘the process of stakeholder selection in
effectual settings is actually a process of
self-selection’ (Dew et al. 2008, p. 49)
‘the only way for each party in the
relationship to benefit is by making
small (affordable-loss based) but
credible commitments to a joint course
of action’ (Sarasvathy and Dew 2008a,
p. 728)
‘stakeholders bring new ideas, new
solutions, and new means into the
organization’ (Servantie and Rispal
2018, p. 313).
‘new stakeholders . . . continuously appear
and recede on the way’ (Harmeling
2011, p. 299)
Examples of other sources addressing the
second-order code
Sarasvathy (2008)
Constitution of Effectual Networks
Karri and Goel (2008), Murnieks et al.
(2011), Chetty et al. (2014; 2015),
Galkina and Chetty (2015), Maine et al.
(2015), Reymen et al. (2015), Akemu
et al. (2016), Jiang and Rüling (2017)
Sarasvathy (2001; 2008), Dew and
Sarasvathy (2003; 2005), Akemu et al.
(2016)
Dew and Sarasvathy (2007), Sarasvathy
(2008), Sarasvathy and Dew (2008a),
Fisher (2012), Galkina and Chetty
(2015), Reymen et al. (2015)
Wiltbank et al. (2006), Sarasvathy and
Dew (2008a), Corner and Ho (2010),
Berends et al. (2014), Chetty et al.
(2015), Galkina and Chetty (2015),
Deligianni et al. (2017), Engel et al.
(2017)
Chetty et al. (2015), Galkina and Chetty
(2015), Reymen et al. (2015)
7

Table 3. Summary of insights surrounding how networks develop under effectuation: mechanisms and network agents
Themes from entrepreneurial
network research
(as per Figure 1)a
Mechanisms
• Micro-foundations of agency,
opportunity, inertia, and random
events
• Micro-dynamics such as, for
example, homophily, heterophily,
and prominence attraction

Networking agent
• a single enterprising individual
a
Exemplars regrading mechanisms include Butler and Hansen (1991), Gulati and Gargiulo (1999), Ruef et al. (2003), Smith and Lohrke (2008), Ahuja et al. (2012), Ho and Pollack (2014) and Tasselli et al.
(2015) and, regarding agency, include Lechner and Dowling (2003), Gulati and Srivastava (2014) and Sullivan and Ford (2014).
C 2019 British Academy of Management and John Wiley & Sons Ltd.
Emergent themes from the effectuation literature
Second-order codes
(comprised of X first-order
codes)
Networking propensity (9)
Networking approach (5)
Proximity (6)
Interaction medium (7)
Facilitators (4)
Trust (3)
Homophily (2)
Networking agents (3)
Stakeholder assumptions (3)
Examples of first-order codes
Networking capability, open to
relationships, experience,
expertise
Conscious choice, active
networking, not ad hoc, direct
Immediate vicinity, local search,
known actors
Face-to-face, social gathering,
social media
Common background, vocabulary,
adherence to norms
Trust, bonding, investment in
relationships
Like-minded, common
background
Customers as promoters, others
bring on others
Intelligent altruism, docility,
effectual
Illustrative quotes
‘the essential resource . . . the
entrepreneur’s capability to create
and develop new and established
relationships’ (Evers et al. 2012,
p. 65)
‘networking effectually is a conscious
choice . . . in preference to
networking strategically’ (Galkina
and Chetty 2015, p. 664)
‘usually starting very close to home,
inside their immediate social
network’ (Wiltbank et al. 2009,
p. 117)
‘most made extensive use of openly
available online platforms’ (Daniel
et al. 2015, p. 811)
‘common . . . background, shared
vocabulary, and similar research
interests . . . helped gain
commitment’ (Chetty et al. 2014, p.
822)
‘all human action (entrepreneurial or
not) requires trust’ (Karri and Goel
2008, p. 740)
‘in conjunction with like-minded
stakeholders . . . ’ (Saravathy and
Dew 2008b, p. 243)
‘customer leverages (their) network for
sales development’ (Coviello and
Joseph 2012, p. 93)
‘effectuators . . . follow the
‘‘intelligent altruism’’ principle
. . . ’ (Galkina and Chetty 2015,
p. 653).
8
Examples of other sources addressing the
second-order code
Dew (2009), Read et al. (2009a), Newbert
(2012), Andries et al. (2013),
Gabrielsson and Gabrielsson 2013),
Maine et al (2015), Alsos et al. (2016)
Chiasson and Saunders (2005), Mort et al.
(2012), Sarasvathy et al. (2014), Daniel
et al. (2015), Galkina and Chetty (2015),
Lam and Harker (2015)
Sarasvathy (2008), Dew et al. (2008),
Maine et al. (2015)
Fischer and Reuber (2011), Akemu et al.
(2016)
Fischer and Reuber (2011), Murnieks et al.
(2011), Fisher (2012), Chetty et al.
(2014), Lusch and Nambisan (2015)
Goel and Karri (2006), Reymen et al.
(2015),
Sarasvathy (2008), Wiltbank et al. (2009),
Dimov (2010), Murnieks et al. (2011)
Chandler et al. (2011), Coviello and Joseph
(2012), Kalinic et al. (2014), Lusch and
Nambisan (2015), Akemu et al. (2016)
Augier and Sarasvathy (2004), Sarasvathy
and Dew (2008), Engel et al. (2017)
J. Kerr and N. Coviello
Constitution of Effectual Networks
assess the state of knowledge on why and how network
development occurs under effectuation, and what net-
work develops over time.
What do we know about ‘why’
networks develop under effectuation?
In Table 1, we summarize our analysis and findings
regarding why networks develop under effectuation.
This reveals five prevalent concepts (second-order
codes). In matching these concepts to themes from
extant entrepreneurial network literature, we find ef-
fectual entrepreneurs invite people on board not to
secure ‘required’ resources, but, for example, to cre-
ate shared visions, negotiate commitments and col-
laboratively convert uncertainty and ambiguity into
opportunity. Recalling that contextual influences per-
vade and set boundaries for entrepreneurial action
(Welter 2011; Zahra et al. 2014), conditions of uncer-
tainty and ambiguity help explain the myriad motives
behind network development evident in the effectu-
ation literature. In line with Lerner et al (2018), we
suggest that these motives present effectuation as an
entirely rational way of proceeding.
That context leads to reliance on crazy-quilt ratio-
nale is foundational to effectuation theory. Outside the
boundaries of effectuation’s delineating context, net-
work development can occur in line with traditional
models (Engel et al. 2017). However, our review
raises several issues surrounding any such boundary
conditions. We focus here on uncertainty (McMullen
and Shepherd 2006; Milliken 1987) and goal ambigu-
ity (Feldman 1989; March 1978) as the two most cited
conditions and begin by noting that these are distinct,
multidimensional constructs. Yet, in theorizing
around effectuation, they are typically presented as
inextricable and simplified for the purposes of theo-
retical exposition. We suggest this runs counter to the
spirit of contextualizing entrepreneurship research. In
particular, why networks develop under goal ambigu-
ity (e.g. a general aspiration to start a business) may
differ from why networks develop under uncertainty
(i.e. where an entrepreneur has ideas around which
uncertainty becomes relevant). Although we are
conscious of the risk of over-contextualization, this
is not yet addressed in the effectuation literature.
If we consider uncertainty further, it is also un-
clear if the Knightian uncertainty [where possible
outcomes and their probabilities are neither known
nor knowable] emphasized in effectuation is a neces-
sary condition (Welter and Kim 2018). To illustrate,

C 2019 British Academy of Management and John Wiley & Sons Ltd.
9
we reflect on the research instrument through which
effectuation theory was initially induced. It describes
a scenario where: (i) the product is known; (ii) market
segments are apparent; (iii) demand is increasing; and
(iv) financial viability is assured (Sarasvathy 2008,
p. 309). Although we acknowledge that uncertainty
is a subjective and elusive construct (McKelvie et al.
2011; McMullen and Shepherd 2006), the nature of
uncertainty in this scenario is not evident. Taking this
one step further, if types of uncertainty affect en-
trepreneurial decisions differentially (McKelvie et al.
2011), state, effect and response uncertainty (each
entailing different sources of unpredictability as per
Milliken’s (1987) typology) may exert similar ef-
fects on network development. This notwithstand-
ing, uncertainty in the generic sense seems to be a
taken-for-granted boundary condition in effectuation
research.
Similarly, arguments surrounding goal ambiguity
appear incomplete. For example, in the same way
there are different forms of uncertainty; directive vs.
priority goal ambiguity (Chun and Rainey 2005) may
reflect differing contextual influences. Further, net-
work development under effectuation is often por-
trayed as entailing non-goal-directed behavior (e.g.
Sarasvathy 2008). Yet in arguing against the role of
goals, researchers often adopt goal-oriented language
(i.e. aiming, pursuing, seeking) to explain network-
ing behavior (e.g. Engel et al. 2017). We attribute
this to effectuation literature itself being ambiguous
with respect to the goals it refers to. For example,
Sarasvathy (2008, p. 113) argues that goals at the
highest levels may be clear, but ‘operationalization at
lower levels may be highly ambiguous’. She does not
however specify the nature of these lower level goals.
In contrast, Bateman et al. (2002) identify five cate-
gories of goals on a hierarchical basis relevant to an
entrepreneurial setting: ultimate, enterprise, strategic,
project and process goals.
We argue that the effectual principles (i.e. allowing
means to drive outcomes; co-creating opportunities;
proceeding in a manner that limits down-side poten-
tial losses) guide action and are both process and goal
oriented. Taking this further, the numerous motives
identified in our study may reflect process goals that
are typically subordinate to higher-level goals that
cascade down through the goal hierarchy (Austin and
Vancouver 1996; Cropanzano et al. 1992). Our analy-
sis suggests these motives relate to either an end-point
of the process (e.g. maximize means in the absence
of specific resource needs) or the ongoing process
itself (e.g. share risk). Given indications of process
10
goals, perhaps a distinguishing feature of effectual
networking is not the under-specification or absence
of lower-level goals. Rather, it may be that ambiguity
lies elsewhere within the goal hierarchy or that goal
hierarchies themselves are under-specified. For exam-
ple, we suggest there is a need to distinguish between
venture goals and goals lying beyond the venture that
are more personal in nature. This is because both are
core constructs that can explain behavior (Batemen
et al. 2006; Kuratko et al. 1997). Importantly, with-
out greater construct clarity, arguments surrounding
goal-motivated behavior in effectual networking are
potentially flawed.
We also observe that separate from the notions of
goals and motives, effectuation seems to be emerging
as a ‘catch-all’ for network action not underpinned by
causal logic. However, alternative explanations exist
for non-goal-directed behavior. Following, for exam-
ple, Reuber et al. (2016) and Lerner et al. (2018), we
suggest that factors such as habit and impulse may
be influential, but are not well understood as regards
effectuation logic. Finally, our review identifies an
under-explored aspect of effectuation. Specifically,
that entrepreneurs reflect on and consider what can
be done with the means available to them (Sarasvathy
and Dew 2005). This conveys the development of
sets of ideas (Hill and Birkinshaw 2010) reflecting
‘imaginary combinations of product/service offer-
ings, potential markets or users, and means of bring-
ing these offerings into existence’ (Davidsson 2015,
p. 684). When ideas are shrouded in uncertainty, en-
trepreneurs engage in actions intended to determine
whether they warrant further attention (Dimov 2007;
McMullen and Sheppard 2006). This includes en-
gaging relevant stakeholders. Given that ideas and
actions are closely linked (Bird 1988; Hayton and
Cholakova 2012), we suggest that effectuation the-
ory needs to move beyond vague reference to ideas
to more clearly understand how ideas shape network
development.
Despite raising issues surrounding the assump-
tions, specificity and assumed mutuality of boundary
conditions in effectuation, our review suggests that
meaningful contextual differences do exist relative to
that portrayed in the entrepreneurial network litera-
ture. This is important because context can provide
alternative explanations for a phenomenon (Welter
2011; Zahra et al. 2014). Here, it has implications for
goal-setting, ideas and the motives behind network
development. With this in mind, we now consider
how networks develop under effectuation.

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
Adding the ‘how’: towards a model of
network development
In this section, we explore the literature surrounding
how networks develop under effectuation, framing
our discussion in network process models depicting
the identification, negotiation, selection, expansion
and deactivation of ties (e.g. Larson and Starr 1993;
Slotte-Kock and Coviello 2010). We then address
mechanisms and agency underpinning network
development. However, we first consider the collec-
tivity of networks (e.g. friendship, familial, advice) in
which an entrepreneur is embedded prior to any en-
trepreneurial endeavor, because these networks repre-
sent points of departure for entrepreneurial journeys.
The effectuation literature identifies pre-existing,
‘whom I know’ networks as critical resources at
hand (Sarasvathy 2001), but provides no meaningful
insight pertaining to their characteristics. This is
problematic because network characteristics (dis-
cussed below) can influence subsequent network
development through, for example, relational inertia
(Kim et al. 2006; Uzzi 1997). Also, like the more
general presumption evident in network process
models (Aldrich and Zimmer 1986; Hoang and
Antoncic 2003), effectuation conveys that network
development commences once the decision to engage
in entrepreneurship has been made. This may under-
state the role of pre-existing networks and is relevant
to effectuation because they not only define ‘whom I
know’ but inevitably influence ‘who I am’ and ‘what I
know’. For example, identity formation is influenced
through social interaction (Ashforth and Mael 1989)
and, in turn, identity influences how one approaches
network development (Hite and Hesterly 2001).
Similarly, interactions influence development of
cognitive models used to make sense of uncertain
situations and guide decision-making (Haynie et al.
2010; Read et al. 2009a). The behavioral norms of
others also serve as external re-enforcement for one’s
own behavior, particularly in the face of uncertainty
(Cialdini and Trost 1998). Here, social learning the-
ory (Bandura 1977) suggests that how an entrepreneur
approaches network development will be shaped by
the normative pressures of networks within which she
is embedded (Granovetter 1985; Uzzi 1997). This also
raises the specter of a possible social origin for effec-
tuation; one where interactions in pre-existing net-
works influence an entrepreneur’s inclination towards
effectual logic. A social origin independent of exper-
tise might explain why Sarasvathy (2008) and others
Constitution of Effectual Networks
(e.g. Fischer and Reuber 2011) find novice (rather
than expert) entrepreneurs can also rely on effectual
reasoning. A social origin for effectuation has yet to
be explored and underscores the need to consider the
role and nature of the entrepreneur’s pre-existing net-
works more fully.
Network processes
Our review of the effectuation literature indicates that
past research addresses, to varying degrees, the iden-
tification, negotiation, selection and deactivation of
ties as conveyed in extant network process models
(Table 2). We did not identify any meaningful discus-
sion surrounding the expansion of network ties along
the lines of, for example, Larson and Starr (1993) or
Hite and Hesterly (2001).
Tie identification. Traditional network process
models provide for strategic identification of relation-
ships based on economic rationale, resource access or
other pre-determined criteria (Porter and Woo 2015;
Stuart and Sorenson 2007; Vissa 2011). However,
effectual networking lacks the pre-determined ven-
ture goals that facilitate identification on these bases
(Engel et al. 2017; Sarasvathy and Dew 2005). This
underscores that effectual networking is not a strate-
gic search for the ‘right people’ in the traditional sense
(Sarasvathy and Dew 2013). Instead, the effectua-
tion literature emphasizes two arguments surround-
ing how potential stakeholders might be identified
or encountered (Table 2) – each linked to a specific
effectual principle.
One argument, consistent with the principle that
available means drive effectual processes, is that en-
trepreneurs reflect on whom they know and identify
potential stakeholders from established relationships.
However, we know relatively little about how en-
trepreneurs engage in such reflection. For example,
social capital theory suggests reflection may attend to
individual relationships or the broader network (Adler
and Kwon 2002; Nahapiet and Ghoshal 1998). The
latter seems important to effectuation because percep-
tions of networks can influence one’s sense of power
and control and their subsequent networking activity
(Ibarra 1993; Krackhardt 1990). This may also extend
to higher-level considerations such as social–political
institutions (Galkina and Chetty 2015). Given the im-
portance of reflecting on ‘whom I know’, another con-
sideration is how closely perceptions mirror reality.
To the best of our knowledge, this is only investigated
outside effectuation (e.g. Busenitz and Barney 1997;
Marsden 2005).

C 2019 British Academy of Management and John Wiley & Sons Ltd.
11
The second argument builds on the principle of
embracing contingencies and suggests that effec-
tual entrepreneurs actively seek to extend their net-
works beyond whom they know. This entails leverag-
ing existing contacts for introductions to others and
networking to encounter valuable contacts (Chetty
et al. 2015; Porter and Woo 2015). Also identi-
fied is entrepreneurs being consciously open to ac-
cidental, serendipitous and informal relationships
(Galkina and Chetty 2015; Sarasvathy and Dew 2005)
leading to contingent opportunities (Dew 2009). In
de-emphasizing ‘whom I know’, this ‘contingent
contact’ perspective conveys stakeholder emergence
through so-called garbage-can processes (Augier and
Sarasvathy 2004). Although networks are as likely to
originate in garbage cans as from ‘whom I know’ con-
tacts, the conditions under which each avenue is pre-
ferred are not fully understood. This notwithstanding,
providing for contingent contacts helps differentiate
network development under effectuation from the de-
pendence on pre-existing networks that characterizes
network bricolage (Baker et al. 2003).
Despite apparent randomness, Sarasvathy and Dew
(2005) stress that effectual networking is not ad hoc,
and we see several arguments for a more calculative
approach regarding identification of possible stake-
holders. This does not suggest that preferences or
willingness to commit can be known, but effectu-
ation does consider domain-specific knowledge and
experience (‘what I know’) which can facilitate an un-
derstanding of stakeholder potentiality (Dimov 2010).
Also, effectuators may seek out like-minded individu-
als with similar mental models (Sarasvathy and Dew
2005). Pertinent too are the ideas that effectual en-
trepreneurs develop. To illustrate, we consider Saras-
vathy’s (2008, p. 309) research instrument. If you
created a computer game for entrepreneurship as a
teaching tool in an environment of increasing demand
for entrepreneurial education in schools, who would
you reach out to? Important here is that, while effectu-
ation may eschew prediction, we need to understand
how entrepreneurs reflect on potential stakeholders
and what it means for network development.
Tie negotiations. Regardless of how potential stake-
holders are identified or encountered, network devel-
opment occurs through processes entailing interac-
tions and negotiations. Table 2 shows that this is pro-
vided for in the effectuation literature.
One aspect that appears unique to effectuation
is the challenge that entrepreneurs face when they
assume a promoter’s role and deliver ‘pitches’ to
potential stakeholders (Harmeling and Sarasvathy
12
2013; Read et al. 2009a). This is because interactional
success rests on giving sense to uncertain situations
(Cornelissen et al. 2012; Sarasvathy 2004). If we con-
sider entrepreneurship more generally, sense-giving
typically entails creating stories about the endeavor
and how stakeholders might be linked in actions and
goals (Nagy et al. 2012). But, this usually requires
that ‘the entrepreneur has already made sense of
the venture’s value proposition’ (Pollack et al. 2012,
p. 918). In the effectual context, where entrepreneurs
are not claiming to know end points (Sarasvathy
2001) and no presumptions are made about pref-
erences of potential stakeholders (Dew et al. 2008;
Sarasvathy and Dew 2005), the nature of stories told
is unclear. Despite some recent work in this area (e.g.
Jiang and Rüling 2017), little progress towards un-
derstanding these stories has been made since Fischer
and Reuber’s (2011, p. 4) observation that it ‘appears
to be that they involve the entrepreneur telling stake-
holders about the effects she thinks she can create
given the means she believes she has available’.
While a promoter’s efforts influence whether
commitments are secured, non-committal outcomes
(acknowledged but understudied in effectuation)
can provide valuable clues about the viability of
an emerging artefact (Sarasvathy 2008). From an
effectual networking perspective, such outcomes
may also trigger a cognitive re-assessment of ‘whom
I know’ (Fischer and Reuber 2011). More generally,
they may also prompt entrepreneurs to reflect on their
networking scripts (Chiasson and Saunders 2005).
As such, their approach to networking, including
negotiations, may change.
In effectuation, negotiations probably emphasize
control over process and outcomes (Read and
Sarasvathy 2012) and possible transformations to
an emerging artefact over the type and quantity
of economic returns (Sarasvathy and Dew 2008a).
This is because uncertainty negates predictability
(Steyaert 2007). Effectuation also envisions iterative
negotiations driven by preferences and expectations
of stakeholders which may be articulated and
inflexible or alternatively, ambiguous and malleable
(Sarasvathy and Dew 2008a). These iterations con-
tribute to a constraining cycle of goal congruence and
diminishing room for transformational negotiation
on the part of new stakeholders (Sarasvathy 2008;
Sarasvathy and Dew 2005). Absent from the effectua-
tion literature, however, is consideration of power and
influence in negotiations as per resource dependence
theory (Newbert and Tornikoski 2013; Pfeffer and

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
Salancik 1978). Perhaps, this is because effectua-
tion theory assumes docile and altruistic behavior
(Sarasvathy and Dew 2005). While such behaviors
offer a viable explanation for network development
(Augier and Sarasvathy 2004), we follow Williamson
(1975) by suggesting that some stakeholders will
probably seek to tilt things in their favor. We say this
because we cannot assume context (i.e. uncertainty
and goal ambiguity) is equal for all involved and,
hence, we anticipate differences in decisions and
behaviors (Brännback and Carsrud 2016).
Tie selection. In traditional network process mod-
els, selection of ties rests with the entrepreneur (e.g.
Larson and Starr 1993, Slotte-Kock and Coviello
2010). In contrast, the effectuation literature empha-
sizes decisions by other willful agents who self-select
into an effectual process (Sarasvathy and Dew 2005).
The notion that tie formation rests with stakehold-
ers (some of whom may be less than ideal as per
Engel et al (2017)) seems extreme. We suggest a
more balanced perspective in line with Vissa (2011,
2012) where both actors apply their own match-
ing criteria. Although effectuation researchers have
done little to investigate stakeholder decision-making
empirically, Table 2 indicates that possible bases
for commitment (self-selection criteria) have been
identified.
As a general presumption, stakeholders must see at
least an abstract opportunity (Sarasvathy et al. 2014).
This entails a sense of fit between possible futures
and, for example, stakeholder aspirations and value
systems (Dew et al. 2008; Maine et al. 2015). But
in effectuation, possible futures are poorly defined.
This supports an alternative view where effectual en-
trepreneurs may be able to proceed without aware-
ness of any vision on the part of stakeholders (Karri
and Goel 2008). For example, Burns et al. (2016)
argue that stakeholder enrolment under uncertainty
is based more on the entrepreneur than the oppor-
tunity. We extend this by suggesting that process
considerations (i.e. why are we doing it this way?)
might also be important because effectual processes
diverge from observed conformity to more predictive
approaches (Alvarez and Barney 2005; Sarasvathy
2008).
Regarding the nature and content of commit-
ment, these are considered in the general litera-
ture in terms of inputs, durability and consistency
(Dwyer et al. 1987). Conceptualizations surround-
ing effectual commitments also identify certain dis-
tinguishing characteristics. First, by ‘actually staking
Constitution of Effectual Networks
something’ effectual stakeholders get a real voice in
future transformations (Sarasvathy and Dew 2008a,
p. 729). Second, commitments are not to a particular
idea per se, but to a process entailing a series of possi-
ble transformations (Sarasvathy and Dew 2005). Im-
plicitly, commitments are flexible and represent loose
agreements to collaborate, based possibly on vague
aspirations (Reymen et al. 2015; Sarasvathy 2008).
Tacitly, they entail a commitment to not explore other
opportunities (Sarasvathy and Dew 2005). Finally, ef-
fectual commitments go beyond the artefact to in-
clude an enduring commitment to the network itself
(Sarasvathy 2008).
Tie deactivation. The possibility that commitments
may not endure receives limited mention in the effec-
tuation literature (for an exception, see Chetty et al.
2015). This is notable because presumptions about
enduring commitments appear inconsistent with: (i)
the flexibility and experimentation espoused in ef-
fectuation; and (ii) provisions for tie deactivation in
other network models (e.g. Kim et al. 2006). Instead,
the nature of the effectual problem space seems to
heighten the potential for impermanence. First, select-
ing into an effectual process involves a stakeholder
committing resources (e.g. time, money) they can af-
ford to lose. If those resources become exhausted,
it may mark the end of that stakeholder’s commit-
ment. Second, (re)negotiations create the challenge of
constructing agreement (Read and Sarasvathy 2012).
More generally, a lack of goal clarity heightens the
potential for inter-partner misalignment (Inkpen and
Tsang 2005) and sustaining stakeholder involvement
can be more difficult when novel opportunities are
involved (Snihur et al. 2017). Docility and altruism
aside, subsequent negotiations might generate con-
flict that leads certain stakeholders to disengage.
Mechanisms and network agents
With respect to mechanisms, the network literature
distinguishes between interrelated microfoundations
of network evolution and network microdynamics.
As per Ahuja et al. (2012), microfoundations are fun-
damental drivers shaping the formation, persistence
and deactivation of network ties, and include agency,
opportunity and inertia. Microdynamics are mecha-
nisms that cause change in network membership such
as, for example, homophily, heterophily and attrac-
tion to prominent others. The effectuation literature
addresses how networks develop in terms of process,
but less attention has been directed to these support-
ing mechanisms.

C 2019 British Academy of Management and John Wiley & Sons Ltd.
13
Among the mechanisms identified in our review are
the agentic qualities of entrepreneurs (see Table 3).
This includes the extent to which they are open to ex-
panding their social network and engaging new net-
work contacts (Fischer and Reuber 2011). Opportu-
nity is also attended to with an emphasis on proximity
(Sarasvathy 2003), but we found no meaningful dis-
cussion of inertia. Consideration of micro-dynamics
is also evident; including trust and homophily. Of
note, however, is that we found no compelling ar-
guments that these mechanisms are unique to either
effectual networking or effectual entrepreneurs. Ac-
cordingly, our findings correspond to Arend et al.’s
(2015) criticism that effectuation theory does not ad-
equately explain the networking abilities of its en-
trepreneurs.
Moreover, we note that the crazy quilt that de-
velops through effectual networking involves stake-
holders who are themselves active network agents,
and it becomes apparent from the literature that the
network that emerges is unlikely to be the result of
a sole entrepreneur’s efforts, but rather that of the
collectivity. As seen in Coviello and Joseph (2012),
stakeholders may engage in network development
activities for firms creating innovation. This repre-
sents a fundamental shift from classic entrepreneur-
ship theories that locate agency in a single en-
terprising individual (e.g. Shane and Venkataraman
2000). It also highlights a need for effectuation the-
ory to move beyond the ego-net, although we ac-
knowledge that this will make research efforts more
complicated.
What do we know about ‘what’
network develops in effectuation?
In effectuation, networks are not a means for actual-
izing conceptualizations of an opportunity as they are
under classic, causal approaches to entrepreneurship.
Instead, they are ends in themselves that reflect the
creation of opportunities (Sarasvathy and Dew 2005).
In coining the phrase ‘effectual network’, Sarasvathy
and Dew (2003, p. 31) posit observable differences in
the characteristics of networks that develop under ef-
fectuation vs. more instrumental ones. Yet, at the heart
of effectuation theory lie networks whose character-
istics remain largely unexplored (sufficiently so that
we do not offer a comparative table). This represents a
key limitation because insight on network elements is
important to understanding entrepreneurial outcomes
(Rauch et al. 2016; Stam et al. 2014). That is, we
14
cannot fully appreciate the influence of networks
without first understanding their constitution.
Structural elements
The effectuation literature provides little insight re-
garding common structural characteristics such as
network size, centrality, structural holes and the
strength of network ties. For example, although stud-
ies identify possible benefits associated with network
size (e.g. Fisher 2012), we know little else beyond
conceptual arguments that effectual networks tend
to become less effectual as they grow over time
(Sarasvathy and Dew 2005). The effectuation liter-
ature also appears to assume centrality even though
the partnering principle of effectuation is more in
line with alternative conceptions that are: (i) agent-
neutral; and (ii) provide for more than one locus of
decision-making (e.g. Harper 2008; Witt 2004). Be-
yond this, effectuation research generally provides
only vague reference to network structure despite
structure being one of the most studied characteristics
in network research (Phelps et al. 2012).
Relational elements
Relational elements encompass the content and gov-
ernance of exchange between actors in a network
(Hoang and Yi 2015). If we consider content, re-
sources are most routinely identified in the effectu-
ation literature, but our understanding of these re-
sources is limited to two distinguishing attributes.
First, the resources exchanged in effectuation are said
to be resources that members of the network can af-
ford to lose (Dew et al. 2009). Second, their value may
be indeterminable a priori, owing to the unpredictabil-
ity of outcomes associated with the uncertain and am-
biguous context (Sarasvathy 2008). Taking this one
step further, despite references in effectuation-related
literature to ‘necessary’ resources (e.g. Engel et al.
2017) there are no necessary resources per se. The in-
dispensability implied by such resources runs counter
to the unpredictability of the effectual problem space.
The notion of resource potentiality, however, con-
veys that resources might play certain yet-to-be ex-
plored roles in effectuation. For example, given the
creativity envisioned in effectuation, entrepreneurs
might pursue heterogeneous resources (more likely
from contingent contacts) that contribute to novel re-
combinations and transformations (Batjargal 2010;
Stam and Elfring 2008). Resources also vary in terms
of the degree to which they can be deployed to

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
different uses (Williamson 1991). Thus, to expand
rather than constrain opportunities, entrepreneurs
might seek resources characterized by a low degree
of specificity (e.g. financial capital). Conversely, low
specificity might be another factor contributing to
what Fischer and Reuber (2011) describe as effectual
churn, because such resources place no constraints on
what can be done. Finally, although effectuation the-
ory largely ignores issues of power in relationships,
entrepreneurs might prefer to secure smaller amounts
of resources from a wider network base as a means of
maximizing control (Pfeffer and Salancik 1978).
Beyond resources, several studies emphasize the
information exchanged (e.g. Coviello and Joseph
2012; Reymen et al. 2015). Here, core arguments
in effectuation are consistent with the broader en-
trepreneurship literature identifying networks as
sources of ideas and information that underpin en-
trepreneurial opportunities (e.g. Birley 1986; Ozgen
and Baron 2007). Other studies identify the
legitimacy-enhancing effect of network connections
(e.g. Chetty et al. 2014). Legitimacy is pertinent
to effectuation because, in situations of high uncer-
tainty and innovative endeavors, potential stakehold-
ers search for signals of legitimacy when consider-
ing tie formation (Podolny 2001; Stuart et al. 1999).
Another content item exchanged in entrepreneurial
networks is emotional support (Hanlon and Saunders
2007). This plays a role in an entrepreneur’s motiva-
tion and ability to engage in network exchange activ-
ities (Adler and Kwon 2002). It has also been linked
elsewhere to persistence in the face of challenging
social interactions, including attempts to secure new
resources (Gimeno et al. 1997; Johannisson 2000).
Emotional support, however, has yet to receive mean-
ingful attention in the effectuation literature.
Finally, exchange of any network content relies
on facilitating governance mechanisms. Hoang and
Antoncic (2003) and Hoang and Yi (2015) empha-
size three such mechanisms: (i) trust; (ii) implicit
open-ended contracts supported by social mecha-
nisms such as the threat of ostracism (i.e. at least
temporary exclusion from group acceptance, benefits
or friendship); and (iii) legally enforceable contracts.
Despite conceptual debate to the contrary (e.g. Goel
and Karri 2006; Sarasvathy and Dew 2008a), trust is
the most widely mentioned governance mechanism
in studies connecting effectuation and networks.
Limited work, however, surrounds other governance
mechanisms. That contracts in any form have yet
to receive any meaningful attention is puzzling,
because they are argued to represent a critical means
Constitution of Effectual Networks
for controlling an unpredictable future (Sarasvathy
2003). Having said this, we suggest an important
role for social mechanisms, given that appropriate
contracts can be difficult to devise ex ante owing to
uncertainty (Burns et al. 2016).
Nodal elements
Sarasvathy and Dew’s (2003) conceptual arguments
surrounding ‘effectual networks’ are underpinned by
assumptions about nodal elements (i.e. characteristics
that inhere in entrepreneurial agents). In the general
network literature, nodal differences are often treated
as ‘noise’ to be controlled for or possibly ignored
(Phelps et al. 2012). Our review suggests that this
is also evident in effectuation research, which gener-
ally assumes docility and intelligent altruism on the
part of stakeholders (Sarasvathy and Dew 2005). By
assuming a network of like-minded individuals, cer-
tain research possibilities are denied. For example,
effectuation entails principles that may not always be
highly correlated (Chandler et al. 2011; DeTienne
and Chandler 2010) and even like-minded individ-
uals might adopt different approaches to individual
principles. Similarly, given the perceptual nature of
the effectual context, we cannot assume it applies to
all involved, and some actors may be inclined towards
effectuation while others rely on causation. It seems
reasonable, then, that the emergent network might
be populated with individuals whose preferred logics
differ, but where effectuation remains the dominant
network logic. Indeed, including an increasing num-
ber of causal thinkers could provide a viable expla-
nation for the transition from an effectual to a more
instrumental network. Although the research poten-
tial in exploring interactions between these two logics
has previously been identified (Perry et al. 2012; Read
et al. 2009a), a gap in empirical insight persists.
Effectuation research also appears to ignore nodal
characteristics important to both network processes
and outcomes. For example, it makes only vague ref-
erence (e.g. Sarasvathy and Dew 2003) to the emo-
tional energy that helps explain the actions of en-
trepreneurs and other members in a network (Ho
and Pollack, 2014). Social competence (Baron and
Markman 2000) and entrepreneurial passion (Cardon
et al. 2009, 2007) are other nodal elements identified
by Hoang and Yi (2015) that appear relevant to un-
derstanding network development under effectuation.
Importantly, if effectuation is a co-creational pro-
cess involving multiple active agents, we must extend
consideration of nodal elements beyond those that

C 2019 British Academy of Management and John Wiley & Sons Ltd.
15
inhere in a focal entrepreneur to include those that
inhere in others.
Discussion and research agenda
Our review and synthesis reveals important differ-
ences between network development under effectua-
tion and entrepreneurial network development more
generally. These differences pertain to why and how
networks develop. We also identify a general lack of
understanding surrounding what network develops.
Together, this provides a rich range of research op-
portunities reflecting two broad trajectories: one ad-
dressing network development, and the other network
outcomes and implications. To explore these trajec-
tories, we summarize our findings in a model that
considers the why, how and what of network devel-
opment under effectuation (Figure 2).
Trajectory 1: effectual networking
In terms of why and how a network develops,
Figure 2 conveys that uncertain and ambiguous con-
texts and the crazy-quilt rationale provide an umbrella
explanation for motives and network processes that
differ from those traditionally described. In the ab-
sence of predefined goals and specific resource needs,
networks arise out of ‘whom I know’ and contingent
contacts and are stitched together in unpredictable
ways. Interactions with others lead to (re)negotiations
and commitments (or not) by self-selecting stakehold-
ers. This means that network agency is not vested
solely in the entrepreneur, but is spread across mul-
tiple actors who themselves may engage in similar
networking processes facilitated by mechanisms such
as, for example, proximity and homophily.
Despite distinctive aspects of effectual network-
ing, if we consider contextual boundary conditions
we contend that the concepts of uncertainty and goal
ambiguity are insufficiently defined and investigated
(as an exception, see Mauer et al. 2017) and net-
work development driven by one or the other may
be distinctly different. We also reflect on goals in
effectuation and suggest a more prominent role for
ideas and process-level goals than presently provided
for. Because of these issues, we worry that ‘effec-
tual networking’ is becoming a catch-all explanation
for non-goal-directed networking behavior and sug-
gest that alternative explanations (e.g. habit, impulse)
be considered. Finally, our concerns extend to the
processes underpinning network development. For
16
Figure 2. A model of network development under effectuation
example, our understanding of how entrepreneurs
reflect on whom they know is limited. Similarly,
extant discussion surrounding interactions, negotia-
tions, and commitments remains largely conceptual.
In previous sections, we explained how aspects of
effectual networking may be distinct from determin-
istic explanations. In reflecting on the context and
processes involved, we now summarize and elaborate
on the issues identified in our review. We use these to
suggest research questions surrounding the why and
how of network development that will be important in
delineating and validating the notion of effectual net-
working (Table 4). We also note that to explore many
of these questions, the interplay between dyads in
the developing network requires investigation. Such
interactions represent an understudied yet important
unit of analysis in network research (Venkataraman
et al. 2012).
Trajectory 2: the networks of effectuation
Figure 2 also conveys that each commitment (or
de/recommitment) inevitably affects the structural,
relational and nodal constitution of the emerging net-
work. However, these characteristics are not well un-
derstood. We argue that: (i) to date, we can only specu-
late about structural elements; (ii) content exchanged
in effectuation goes beyond resources and informa-
tion; (iii) despite debate to the contrary, trust is an
important governing mechanism for exchange; and

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
(iv) nodal differences (including perceptions of con-
text) should not be treated as ‘noise’ or assumed away.
Given that prior studies of entrepreneurial networks
have also paid limited attention to relational and nodal
characteristics (Hoang and Yi 2015), we see these as
particularly fruitful avenues for research in the effec-
tual context.
Each commitment (or de/recommitment) also af-
fects the social context within which the networking
process is embedded (as per e.g. Zahra et al. 2014).
Similarly, change alters the decision-making context
because commitments help clarify goals and reduce
uncertainty. That is, context changes over time as a
function of individual (stakeholder) actions (Welter
2011; Zahra et al. 2014), particularly where relational
processes are involved (Fletcher and Selden 2016).
Beyond changing context however, we also suggest
changes in network elements will either facilitate or
constrain the effectual character of the network – that
is, the degree to which the network adheres to the
principles of effectuation.
Core arguments in effectuation emphasize ‘effec-
tual networks’ as collectives of like-minded individ-
uals relying on effectual logic (Sarasvathy and Dew
2003, 2005). On one hand, such networks would seem
prone to effectual churn (i.e. constant reassessment
of means and possible effects without progression as
per Fischer and Reuber (2011)). On the other hand,
because negotiations and commitments help clarify
goals they may enable transition to more instrumental
Constitution of Effectual Networks
Table 4. Research opportunities and questions surrounding effectual networking
Research opportunities
The delineating context and ‘crazy quilt’ rationale
• Establish bounds for the contextualization of network
research surrounding uncertainty and goal ambiguity
• Define necessary conditions for effectual networking
• Clarify goal constructs and the role of goals
• Identify the role of entrepreneurial ideas
• Avoid effectuation becoming a catch-all for garbage-can
processes.
• Develop a typology of entrepreneurial networking that
extends beyond deterministic and effectual categorizations
Stakeholder ‘identification’ – whom I know and contingent contacts
• Develop insight surrounding reflection on whom I know
contacts
• Understand the ‘triggers’ for pursuing contingent contacts
vs. whom-I-know contacts and vice versa
Interactions and negotiations
• Build empirical insight surrounding interactions and
negotiations
• Test the assumptions of docility and altruism
Self-selection of ties: Commitments
• Develop insights regarding the durability and consistency of
effectual commitments
Stakeholders as active agents
• Develop insights on the role of other stakeholders
• Set aside ego-centric bias and simplifying assumptions
• Address the network leveraging capabilities of other active
agents

C 2019 British Academy of Management and John Wiley & Sons Ltd.
17
Sample research questions
• Is uncertainty a necessary condition for networking effectually?
Is goal ambiguity?
• Do uncertainty and goal ambiguity (and the levels thereof)
influence network development differentially?
• How do the individual dimensions of uncertainty and goal
ambiguity affect network development?
• Do certain entrepreneurs (e.g. experts) network effectively
irrespective of context?
• What are the roles of goals and ambiguity at different levels of
the goal hierarchy in determining one’s approach to network
development?
• How do non-venture goals (e.g. personal, task, process) and their
respective hierarchies influence network development?
• How do other factors such as habit and impulse explain network
development?
• How do an entrepreneur’s ideas (rather than goals) shape
network development?
• What do entrepreneurs consider as they reflect on whom they
know in different contexts?
• How is reflection on who one knows shaped by who one is and
what one knows?
• How does the uncertain context influence the accuracy of
perceptions of what social capital might be available to an
entrepreneur?
• What are the motivations determining who one interacts with
during effectual networking and the order in which it is done?
• Are there factors that bias an entrepreneur towards either ‘whom
I know’ or contingent contacts?
• How do stakeholders make sense of the stories told by effectual
promoters across contexts?
• How do differing perceptions of uncertainty between individuals
affect how they interact and negotiate precommitments?
• What is the nature of the ‘pitches’ made as a function of context?
How are they modified based on interactional feedback?
• What are the roles of power, influence, and opportunism during
negotiations across contexts?
• Are there efficient equifinal paths to achieving effectual
commitments under conditions of uncertainty and/or goal
ambiguity?
• To what extent do stakeholders need to perceive an opportunity
for short-term gain?
• How does the principle of affordable loss affect the enduring
nature of commitments?
• What factors might influence renouncement of effectual
commitments?
• How do relationships formed through effectual commitments
evolve in terms of multiplexity or other characteristics?
• Under what conditions do potential stakeholders focus more on
the opportunity, the entrepreneur or the process?
• What factors determine the extent to which stakeholders engage
in network action?
• How do personal (nodal) characteristics influence network
processes and outcomes across contexts?
18
networks (Sarasvathy 2008). In either case, the effec-
tuation literature provides for variability in the effec-
tual character of networks. We suggest earlier that this
could be facilitated by inclusion of causally inclined
stakeholders, but networks might also vary in terms
of their effectual character because structural and re-
lational characteristics may differentially facilitate or
constrain individual and collective adherence to the
effectual principles.
To explore this more fully, we draw on the extant
network literature to develop arguments surrounding
potential network outcomes and implications for ef-
fectuation. In the interests of theoretical exposition,
we present network outcomes as a false dichotomy
by assuming that certain factors bias an entrepreneur
towards emphasizing either: (i) ‘whom I know’ con-
tacts; or (ii) contingent contacts (i.e. levered through
relationships, serendipitous or accidental). For exam-
ple, entrepreneurs with lower community orientation
(Fischer and Reuber 2011) and social competence
(Baron and Markman 2000) are more likely to rely
on ‘whom I know’ contacts. We postulate that the
characteristics of networks that develop using the
‘whom I know’ vs. contingent contact approaches
would differ markedly. More importantly, these differ-
ences may affect the effectual character of the network
that emerges. We begin our elaboration by presenting
possible outcomes of effectual networking in Table 5.
If we first consider a network that develops from
‘whom I know’ contacts, such networks are likely to
support effectual behavior in several ways. For exam-
ple, networks that develop from strong ties are gen-
erally smaller and exhibit a shared institutional or-
der that facilitates collaboration (Granovetter 1995;
Obstfeld 2005). This supports the co-creation envi-
sioned in effectuation and its partnering principle.
From a commitment perspective, strong ties facilitate
the exchange of network content (i.e. new means)
by reducing information asymmetry and reinforcing
norms and expectations of behavior such as reci-
procity (Granovetter 1985; Uzzi 1997). Exchange in
networks developed from strong ties is also likely to
be socially motivated (Hite and Hesterly 2001) and
governed by trust and other social mechanisms (Gra-
novetter 1973; Hoang and Antoncic 2003). This pro-
vides for more timely access to valuable information
and other resources (Elfring and Hulsink 2007; Mar-
tinez and Aldrich 2011), thereby reducing the effort
invested in networking activities consistent with the
affordable loss principle.
There is, however, a dark side to ‘whom I know’
networks that may constrain effectual behavior. For

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
example, networks that evolve from strong ties
generally exhibit higher density (Granovetter 1973)
and tend towards actor homogeneity (Uzzi 1997).
This can insulate an entrepreneur from novel re-
sources and information that facilitate creative trans-
formations (Perry-Smith and Mannucci 2015). Dense
networks also tend to exhibit norms of behavior
that might constrain the structural (Batjargal et al.
2013) and relational (Granovetter 1995) autonomy
of the entrepreneur, and create barriers to network
change (Johannisson 2000). This is because it is
difficult to alter commitments or sever relation-
ships with embedded ties (Baum and Singh 1994).
This conveys relational inertia and less variability
in characteristics when networks involve ‘whom I
know’ contacts, which runs counter to the flexibil-
ity, experimentation and contingencies espoused in
effectuation.
In contrast, a network that evolves through con-
tingent contacts is likely to involve weak ties. The
principle benefit of weak ties is that they serve as
bridges to diverse resources and less redundant infor-
mation (Baum et al. 2000; Burt 1992). Hence, these
ties support innovation and creativity. Further, cre-
ating a network through contingent contacts allows
for increased network size with the delimiting ef-
fect providing for potentially more resources (Baum
et al. 2000; Brüderl and Preisendörfer 1998). Rel-
evant, too, is that actors in disconnected networks
are less bound by social norms and less dependent
on any other single actor (Batjargal et al. 2013;
Stam et al. 2014). They also enjoy greater structural
(Batjargal et al. 2013) and relational (Granovetter
1995) autonomy. This conveys greater flexibility, po-
tential for experimentation, and control in line with
effectual principles.
Nevertheless, weak ties do not necessarily facilitate
commitments or exchange of network content (Burt
2000). In part, this is because the basis for exchange
tends to be more instrumental than socially motivated
(Greve and Salaff 2003). Similarly, governance tends
to be by way of legal enforcement over social mech-
anisms (Coleman 1988; Hoang and Antoncic 2003).
Also, weak ties create brokerage opportunities. If oth-
ers serve as brokers across structural holes, power and
control can shift from the entrepreneur (Granovetter
1973). The extent to which this happens depends on a
stakeholder’s brokerage orientation (Obstfeld 2005),
but we do not know if effectual altruism negates ac-
tors from actively maintaining separation between
others to gain advantage vis-à-vis a tertius gaudens
orientation.
Constitution of Effectual Networks 19

Table 5. Outcomes of effectual networking: a range of possibilities

Network characteristics ‘Whom I know’ Contingent Contacts

Structural elements Tie strength Strong ties Weak ties

Network size Generally small Potential for larger size
Density High Low
Structural holes Generally few Many and therefore brokerage opportunities
exist
Relational Resources Enhanced mobility of generally homogenous Increased diversity and access to potentially
elements resources more resources
Information More redundancy Novel and diverse
Emotional support Enhanced access Accessible
Basis for exchange Socially motivated More instrumental
Governance mechanisms Trust + social mechanisms Social mechanisms + contracts
Nodal elements Potential for differences Tending towards homogeneity Greater potential for heterogeneity

Table 6. Research opportunities and questions surrounding networks in effectuation

Research opportunities Sample research questions

Pre-existing networks
• Attend to the role of
pre-existing networks
Structural elements
• Build empirical insight
surrounding network
structure
Relational elements
• Develop an understanding
of the prevalence of
resources vs. other content
exchanged
• Develop understanding of
governance mechanisms
Nodal elements
• Examine the potential for
nodal differences
• Do the networks in which entrepreneurs inclined towards effectuation are embedded differ from the
networks of those who are causally inclined?
• How do norms of behaviors of pre-existing networks influence an entrepreneur’s approach to network
development under uncertainty?
• What is the role of inertia, proximity and other mechanisms in networking across contexts?
• What is the relationship between network size and its effectual character?
• How does network density affect the implementation of effectual logic?
• Are effectual commitments more likely though strong or weak network ties?
• Do brokerage orientations vary as a function of contexts and decision logics?
• Do entrepreneurs reflect on resource potentiality and how does this influence the motivation behind,
and the processes of, network development across contexts?
• What is the nature of the resources and other means that stakeholders can afford to lose?
• Does what constitutes legitimacy vary as a function of context? Does legitimacy rest in the process,
individuals involved, or elsewhere?
• What role does emotional support play in an entrepreneur’s persistence and success in developing a
network under uncertainty?
• How does the form and content of governance vary across contexts?
• How do individuals’ perceptions of context shape the network development processes?
• To what extent do all stakeholders need to be inclined towards effectuation for a network to be
‘effectual’?
• How do, for example, the social competence and passion of individual network actors in emerging
networks shape development across contexts?

We present the foregoing to illustrate the potential
for substantial differences in not only the constitution
of networks that develop under effectuation, but also
the effectual character of those networks. Indepen-
dent of actors’ inclinations towards effectuation, we
argue that, while contingent contacts are more con-
sistent with effectual principles espousing flexibility,
experimentation and creativity, the whom-I-know
network is more consistent with collaboration and
resource exchange. Both networks may be ‘effectual’,
yet they differ. Following from this and our earlier
discussion, we summarize research opportunities
and sample research questions surrounding the
networks in effectuation (Table 6). We also include
consideration of pre-existing networks as important
points of departure for effectual processes.
Methodologically, if we focus on the ‘crucial em-
phasis that effectuation urges with regard to networks,
namely their dynamics rather than statics’ (Sarasvathy
et al. 2014, p. 8), we are biased towards longitu-
dinal research designs. Network characteristics and
processes that unfold over time can be captured by
collecting both retrospective and real-time data in-
volving rich case studies (Bizzi and Langley 2012;
Eisenhardt 1989; Langley et al. 2013). Our review
underscores the need to provide for these elements in
effectuation research. We also follow Coviello (2005)
in suggesting that we can develop an understanding of


C 2019 British Academy of Management and John Wiley & Sons Ltd.
20
the interplay of network elements by adopting a multi-
method approach; one that combines qualitative and
quantitative techniques to inductive data. This ‘bifo-
cal lens’ is consistent with recommendations for how
best to capture the complexities of network develop-
ment (e.g. Contractor et al. 2006).
Our sample research questions suggest that quali-
tative approaches should include in-depth interviews
(McCracken 1988), think-aloud protocols (Ericsson
and Simon 1998), and observation of dyadic inter-
actions (Patton 2005). Also see Hindle (2004) and
Neergaard and Ulhøi (2007) for pertinent reviews of
qualitative methods. Quantitative approaches might
involve measures of effectuation/causation (e.g.
Chandler et al. 2011) and measures providing for
dimensionality and levels of uncertainty (e.g. McK-
elvie et al. 2011) and goal ambiguity (e.g. Chun and
Rainey 2005). Also useful will be approaches allow-
ing us to understand entrepreneurial idea sets (e.g.
Hill and Birkinshaw 2010) and we suggest name-
generator techniques (Marin and Hampton 2007) and
network mapping (McCarty et al. 2007) for visualiza-
tion of network structure and social capital (also see
Carrington et al. (2005), Scott (2017), and Borgatti
et al. (2018) regarding network analysis).
Conclusion
Our review on the formation and constitution of ‘ef-
fectual networks’ contributes to the literature in sev-
eral ways. First, we synthesize and critically assess the
fragmented literature surrounding why and how net-
works develop under effectuation and, in turn, what
networks develop. This provides the basis for a the-
matic model that facilitates comprehensive consider-
ation of network processes and outcomes. Critically,
while our model components complement other net-
work process models, they provide for aspects distinct
to effectuation.
Second, we offer a detailed research agenda aimed
at addressing the dearth of studies attending to the
characteristics of pre-existing networks and those net-
works that develop under effectuation. We highlight
research issues emerging from our analysis and of-
fer sample questions to stimulate research surround-
ing components of our model. Because we address
complex cognitive, behavioral and social phenomena,
we do not advocate testing the entirety of the model
within any one study. Instead, in the spirit of effectua-
tion theory and its pragmatic foundations, individual
researchers can stitch pieces of research together into

C 2019 British Academy of Management and John Wiley & Sons Ltd.
J. Kerr and N. Coviello
a crazy quilt of knowledge pertaining to network de-
velopment under effectuation: knowledge that is si-
multaneously useful to prediction, problem-solving
and entrepreneurial action.
Third, we reinforce the importance of contextual-
izing network research and suggest the boundaries
associated with effectuation are inadequately defined
and justified. This signals the opportunity to tease
apart uncertainty and goal ambiguity, and to reflect
on their dimensionalities as contextual variables. We
also caution that ‘effectuation’ is becoming a catch-all
for networking behavior occurring in the absence of
clear goals. Alternative explanations for non-directive
networking suggest another opportunity: the devel-
opment of a typology of contextualized networking
behavior. Along this line, we argue that ideas about
what can be done with available means are a miss-
ing link in understanding network development. En-
trepreneurs will engage in intentional network action
to test the veracity of those ideas, even though they
do not represent goals in the effectual sense (as per
Dimov 2007). This leads us to suggest investigation
of non-venture goals.
Fourth, by integrating classic network theory with
effectuation, we illustrate and theorize about networks
as artefactual outcomes. Our arguments provide for
multi-level and multi-theoretical approaches for ex-
plaining network phenomena (cf. Contractor et al.
2006). Importantly, we define the effectual charac-
ter of networks and demonstrate how it might vary
as a function of the structural, relational and nodal
elements of the emerging network. By bringing pre-
existing networks into the discussion, we also provide
support for a social origin for effectuation, an origin
independent of Sarasvathy’s (2001) findings pertain-
ing to expertise.
Finally, in terms of practical implications, network
development under effectuation demands a broad per-
spective on networks and processes. In particular, en-
trepreneurs should be aware of how others apply ef-
fectual principles and engage in networking activities.
For example, stakeholders’ perceptions of what losses
are affordable may establish boundaries for the en-
durance of their commitments. Similarly, stakehold-
ers’ actions can shape network characteristics that
affect, for example, the entrepreneur’s flexibility and
control. This suggests that entrepreneurs will benefit
from moving beyond consideration of relationships
with individual stakeholders towards a more ‘whole-
network’ perspective.
Of note, we contain our discussion to network pro-
cesses and outcomes as influenced by effectuation.
Constitution of Effectual Networks
Yet, the body of research that links effectuation and
networks is more expansive. Specifically, effectual
outcomes might be more fully explained by position-
ing networks and their characteristics as antecedent
variables in line with, for example, Hoang and
Antoncic (2003). This is important because there is
generally a significant relationship observed between
networks and entrepreneurial outcomes (Rauch et al.
2016).
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Appendix S1. Structural elements of a network


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