Glossary – The Language of Entrepreneurship

Effectuation (and effectual reasoning)

Sarasvathy (2001) distinguished between effectuation and causation when examining how entrepreneurs approached entrepreneurial challenges. He found that the uncertainty surrounding entrepreneurship–particularly with respect to challenges involving undefined end goals, like how starting a business might turn our relative to what was originally envisioned–led to what he called effectual reasoning.

Entirepreneur

Bolton and Thompson (2015) coined a new term, entirepreneurs, in response to what they described as today’s new normal characterized by turbulence and uncertainty in the world. In this environment they claim that success is not easily achieved by an entrepreneur starting a business, then passing it on to a manager to run who eventually may need to give way to a strategic leader to ensure the venture’s continuing success (or perhaps to save it from failing). Entirepreneurs embody the attributes of all of those categories of individuals.

Entirepreneurs successfully combine the attributes we conventionally associate with entrepreneurs, leaders and managers. They make an all-round contribution. Significantly, they appreciate the needs of different circumstances and challenges and flexibly adjust their style and approach. Sometimes they behave in a way we would conventionally describe as entrepreneurial; on other occasions they exhibit conventional leadership; at other times they are ‘managerial’ (Bolton & Thompson, 2015, p. 24).

Innovation

Innovation is “the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organisation or external relations” (Organisation for Economic Co-Operation and Development, 2005).

Internal Locus of Control

The term internal locus of control refers to a belief by an individual that they are in control of their own destiny.

Self-Efficacy

Self-efficacy refers to a belief by an individual in their personal capability to be an effective entrepreneur. Self-efficacy is different than self-confidence because self-efficacy is generally based upon past successes that lead to a heightened belief in abilities whereas an individual might be self-confident even without that confidence resulting from a history of successes.