By looking into general meanings of these two words, causation simply means the action of causing, and anything that produces an effect; while effectuation means to cause to happen. If causation is going from left to right, then by definition, effectuation is going in the opposite direction. To generally introduce and illustrate these two concepts into practice, ‘Curry in a hurry’, an imaginary Indian restaurant as an example of entrepreneurial decision making principles was explained by Sarasvathy (2001). In this example, the differences between causation and effectuation are examined and evaluated.
Now, here comes the effectuation process: Begin with a set of given means, the entrepreneur would have to figure out what she knows, who she knows etc. By using the given means to create effects, she would begin to convince an established restaurant to become a strategic partner or by doing just enough market research to convince a financier to invest the money needed to start the restaurant. Or she can start by selling lunch to her office colleagues.
Overtime, she might develop enough customer bases to start her own restaurant. After a few weeks of trying to build the lunch business, she might discover that people who said they enjoyed her food did not really enjoy it as they did her quirky personality and conversation, particularly her rather unusual life perceptions. The imaginary entrepreneur might now decide to give up the lunch business and start writing a book, going on the lecture circuit and eventually building a business in the motivational consulting industries.
In a nutshell, causation focuses on the predictable aspects of an uncertain future while effectuation focuses on the controllable aspects of an unpredictable future. This is to say that the substantial differences between these two lies on the underlying logic, as causation is ‘to the extent we can predict the future, we can control it’, whereas effectuation is ‘to the extent
we can control the future, we do not to predict it’
Sarasvathy (2001) defined ‘causation processes take a particular effect as given and focus on selecting between means to create that effect’. Gartner (1985) described a new venture creation process with predictive theory, it can be concluded in the following steps: Identify an opportunity for a new product or market, conduct market analysis and competitive analysis,
write a business plan, try to acquire resources and stakeholders, and change the plan when the environment changes, therefore, plans to adapt to the changes.
Dew et al. (2009) compared the fundamental differences between the two approaches. Effectuation is concluded as creative, goal-oriented, affordable loss, partnership, and leverage, while causation is concluded as predictive, goal-oriented, expected return, competitive analysis, and avoid. Chandler et al. (2011) stated four principles on effectuation, they are: pre- commitments, experimentation, affordable loss, and flexibility; while the causation model consists of pre-commitments only.

In the context of the above case
a. Differentiate between effectuation and causation in entrepreneurship.
b. Explain three principles of effectuation theory as discussed in the case.