Effectuation and the Social Entrepreneurship: An Empirical Study of the Relationship between Adopting the Principles of Effectual Logic and Social Enterprise's Performance in Egypt

Abstract

In Egypt, social enterprises are important to confront some of the major challenges facing the country. Nevertheless, they face several obstacles that hinder their development, social impact, and performance. In 2001, Saravathy developed effectuation theory which acknowledges how the decision-making process, action and implementation are practiced by entrepreneurs in an unpredicted and dynamic environment. Hence, effectuation can be suggested as a possible resort to improve social enterprises’ performance. Thus, the objective of the research is to investigate whether effective logic principles affect social enterprises’ financial, market, and innovative performance in Egypt. An online survey was shared via email with social entrepreneurs identified using snow-ball sampling. Results showed that the performance of social enterprises in Egypt is average, and in some instances, lesser than average, especially financial and innovation performance, while they moderately apply effectuation principles as they perform their regular activities.