The effect of effectuation set of means on new venture performance: flexibility principle as a mediating factor

Abstract

Purpose This study aims to examine the effect of the effectuation set of means on new venture performance in the context of Tanzania’s emerging economy. To determine how new ventures, benefit from the effectuation set of means experienced entrepreneurs possess, this study examines the role of the flexibility principle of effectuation as a key mediator. Design/methodology/approach The research is quantitative in nature, and a survey questionnaire was used to get data from five cities of Tanzania. In total, 350 samples obtained for analysis. The hierarchical regression and structural equation modeling were used for testing the hypotheses. Findings The effectuation set of means is affirmed to have a positive effect on new venture performance. The flexibility principle plays a partial mediating role in the relationship between the effectuation set of means and new venture performance. Originality/value This empirical evidence contributes to the progress of the theory of effectuation and also provides managerial guidelines for entrepreneurs who operate their new ventures and face uncertain business environments.

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