Wednesday, February 09, 2011

Effectual Reasoning vs. Causal Reasoning

Inc. magazine has an article about a recent study which looks at the style of thinking used by entrepreneurs. The study also looked at the style of thinking used by corporate executives as a way of understanding what sets entrepreneurs apart:
Sarasvathy concluded that master entrepreneurs rely on what she calls effectual reasoning. Brilliant improvisers, the entrepreneurs don't start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively
reacting to contingencies. By contrast, corporate executives—those in the study group were also enormously successful in their chosen field—use causal reasoning. They set a goal and diligently seek the best ways to achieve it.

This contrast in thinking styles seems of great interest. I'm guessing that most of us, whether in business or not, gravitate to one of these two cognitive styles. Effectual reasoning seems more flexible, causal reasoning more systematic. Do you tend toward effectual reasoning or causal reasoning? Is each thinking style better adapted to certain kinds of problems or situations? How easy is it to effectively mix both styles, either synchronically or diachronically?

Read the whole article. Hat tip to Marginal Revolution.
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