Positive Affect, Positive Evaluation, or Positive Functioning? Bringing Positive Psychology into the Dialog of Effectuation

This paper integrates research on positive psychology and effectuation, a concept representative of the entrepreneurial mind. We review the current development of effectuation research and emphasize the importance and uniqueness of each effectuation principle. Drawing on hedonic theory, desire theory, and eudaimonic account, we posit that three positive factors within positive psychology, positive affect, positive evaluation, and positive functioning, when considered collectively, might have significant differential effects on the levels of the four principles of effectuation individuals adopt. We test our hypotheses using survey data from a sample of CEOs in China, and the findings indicate that positive functioning is the only dimension of positive psychology that is positively related to all four effectual logics and could be an indispensable cause of effectuation. Positive affect was found to be negatively related to the affordable loss principle only, and positive evaluation was just negatively related to the lemonade or leveraging-surprise principle. Theoretical and managerial implications of our study are discussed in the end.