Decision-Making Process and the Principles of Causation and Effectuation at the Point of Inflection: A Phenomenological Study

Nationally, about 50% of all business startups in the U.S. vanish by their fifth year (Fisher, Maritz, & Lobo, 2014). In a recent survey, the U.S. Census Bureau (2015) has identified 5.4 million small businesses in operation today, with about 67% of them having fewer than 20 employees. This majority of all small businesses are known as micro-business enterprises (MBE) and are run by micro-business owners (MBO). In this qualitative phenomenological study, decision-making processes through the principles of causation and effectuation were explored on MBOs whose MBE has fewer than 15 employees. There is a gap identifying challenges MBO’s experience between the phase where the MBE transitions out of the startup phase and moves into the growth phase—a point in the business cycle known as the inflection point (Dimovski, Penger, Peterlin, & Uhan, 2013). The findings in the study supported the problem statement in that MBO behavioral characteristics are the primary drivers that can impact the operating of a successful or unsuccessful business. Authors who have studied decision-making processes at the point of inflection have indicated that most research has been conducted through quantitative methods (Chandler, DeTienne, McKelvie, & Mumford, 2011; Perry, Chandler, & Markova, 2012). As the study on the decision-making principles of causation and effectuation matures, Perry, Chandler, and Markova (2012) suggested new qualitative research be conducted to explore various aspects of psychological capital as MBOs hire, train, and manage employees