Decision-making processes in biotech commercialization: Constraints to effectuation

This research explores two entrepreneurial decision-making processes utilizing effectuation and causation modes in the context of new venture creation in the biotechnology industry. Using a case study approach, we investigate the evolution of three biotech ventures from the start of the venture, featuring major decisions over a period of 10 to 20 years. Assessment of qualitative interviews with founders and CEOs demonstrates that, initially, each company began in effectuation mode and, over time, transitioned to a spectrum between effectuation and causation. The two ventures which retained effectuation logic did not engage in clinical trials. Decision making processes in this study illustrate the interplay between entrepreneurs´ ability to manage technological and market uncertainty and circumstantial changes arising from change leadership, venture capital funding and development of lead candidates in the clinical stage of product development.