ABSTRACT
This chapter utilizes the theoretical framework of effectuation and causation thinking to explore the entrepreneurial thinking and behaviour of Sri Lankan women business owners who use microcredit in the businesses, especially in terms of how their decisions are affected by the social and cultural context. It draws on female, low-tech micro-entrepreneurs such as door-to-door sellers, and owners of confectionery and dressmaking businesses, in a developing country, to explore whether and how they use effectuation and causation logic during business start-up. The goals themselves often seemed to be inspired by chance observations or events which the entrepreneur then incorporated into the business. The chapter finds that female micro-entrepreneurs relied more on effectuation than causation in business start-up. They used all the effectual principles: means-driven approaches, affordable loss thinking, pre-agreements/alliances, acknowledging the unexpected, and non-predictive control. The means-driven sub-constructs of identity, knowledge and networks characteristic of effectuation thinking played a critical role in the business decision-making of micro-entrepreneurs.
