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Sarasvathy, Causation and Effectuation-Toward a Theoretical Shift from Economic Inevitability to

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In other words, none of these decisions involves the creation of artifacts such as firms, markets, and economies. For example, the following are rarely, if at all, addressed in our curricula: 243 I thank the Ewing Marion Kauffman Foundation for funding the empirical work that led to the development of the ideas in this article. I also thank Herb Simon, Anil Menon, and Lester Lave for their invaluable conversation, and the anonymous AMR reviewers, Edward Conlon, Marilyn Gist, Tom Jones, Tom Lee, Benyamin Lichtenstein, Scott Shane, S. Venkataraman, and Andy Wicks for commenting on earlier versions of this paper and for helping me improve it. 244 Academy of Management Review April * How do we make the pricing decision when the firm does not yet exist (i.e., no revenue functions or cost functions are given) or, even more interesting, when the market for the product/service does not yet exist (i.e., there is no demand function)? * How do we hire someone for an organization that does not yet exist? How do we even get able people to apply to a contingent organization-an organization whose existence is contingent upon acquiring employees (e.g., a knowledge-intensive firm, such as a software company)?! * How do we value firms in an industry that did not exist five years ago and is barely forming in the present (e.g., internet companies)? More interesting, how would we have valued them five

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