An empirical study on Chinese enterprise effectuation, market ambidexterity and entrepreneurial performance

Abstract

With the rapid development of innovative economy, effectuation plays a crucial role in the decision-making process of new ventures; however, several inconsistencies persist regarding the correlation between effectuation and entrepreneurial performance. Drawing lessons from the organisational ambidexterity theory, this study used market ambidexterity of new ventures as a mediator variable to determine the correlation between effectuation and entrepreneurial performance in the market domain. Using data from a large sample of enterprises, we found that effectuation markedly affects the balance and interplay of market exploration and market exploitation, although its impact mechanism is different. In addition, effectuation positively affects the operating performance and growth performance; the balance of market ambidexterity positively affects the operating performance, whereas the interplay of market ambidexterity positively affects growth performance. Overall, this study offers several managerial implications for new ventures to apply effectuation to attain market ambidexterity and enhance entrepreneurial performance.