Effectual flexibility and venture performance: The intervening effects of absorptive capacity

Background: Increasingly, there is a determined effort to understand the actions, behaviours and decision logics that drive the performance of entrepreneurial ventures (EV). This study provides insight into the interplay between effectual flexibility (EF), absorptive capacity (AC), and venture performance (VP). Aim: The study aims to understand the relationship that exists between the flexibility principle of effectuation and VP as well as the interfering impact of AC in a moderating and/or mediating role. Setting: The data used for the study were collected from EV operating in various sectors in South Africa. Methods: Using data drawn from a sample of 685 EV, a partial least squared structural equation modelling (PLS-SEM) technique was employed to examine the significance of the relationship between the key variables in the study. Results: The results reveal that EF has a positively significant relationship with VP. While there was no support for moderating effects on this relationship, the findings confirmed that AC has partial and complementary mediating effects on the relationship. Conclusion: The findings suggest that EF enables EV to adapt in dynamic contexts while cocreating opportunities to achieve performance. The nuanced outcome supports the notion that EF and AC are distinct but complementary capabilities. Contribution: This study contributes to the broader entrepreneurship landscape as it highlights that EF and AC are synergistic rather than interdependent capabilities. This means that ventures do benefit from both, but one does not rely on the other to function effectively.