Effectuation Dynamics in AI Entrepreneurship: A Multi-case Study

Hang Ju; Shamsul Huda Abd Rani; Mohamad Hanif Abu Hassan

doi:10.63944/qbe5.JIE

Effectuation Dynamics in AI Entrepreneurship: A Multi-case Study

Hang Ju (Primary Contact)

School of Business Management, Northern University of Malaysia, Malaysia

Shamsul Huda Abd Rani (Author)

School of Business Management, Northern University of Malaysia, Malaysia

Mohamad Hanif Abu Hassan (Author)

School of Business Management, Northern University of Malaysia, Malaysia

DOI:https://doi.org/10.63944/qbe5.JIE

Keywords:

Effectuation, AI startups, Entrepreneurial decision-making, Strategic adaptation

Published

31-12-2025

Abstract: This study investigates the evolution mechanism of effectuation logic in artificial intelligence (AI) startups, with particular attention to the moderating role of dynamic capabilities. Drawing upon Sarasvathy's effectuation theory and the dynamic capabilities framework, we examine how AI-induced environmental uncertainty influences entrepreneurs' decision-making logic and how this logic evolves as ventures mature. Through multiple case studies of six relatively successful AI startups in China, we identify a three-stage evolution pathway: exploration, integration, and optimization. Our findings reveal that dynamic capabilities—specifically sensing, seizing, and reconfiguring capabilities—serve as critical moderators in this evolutionary process, while also demonstrating reciprocal relationships with effectual reasoning. We discuss the limitations inherent in studying successful ventures and explicitly articulate boundary conditions for our theoretical propositions, acknowledging that our findings may characterize successful adaptation strategies rather than typical entrepreneurial behavior.

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Effectuation Dynamics in AI Entrepreneurship: A Multi-case Study

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