innovative and noninnovative small firms types and characteristics this study addresses the proposition that the characteristics of innovative and noninnovative small firms have significant differences it is based on a sample of 50 texas manufacturers cluster analysis yielded five distinct groups two innovative and three noninnovative the two innovative groups were either young firms dubbed the young turks or established managerially competent firms headed by newcomers called the blue chips among the three noninnovative groups the silver spoons appeared to be surviving on past success the striving stoics displayed continuing managerial effort but were led by executives who had been at the helm far longer than average and the kismets showed lesser competence and effort were highly centralized and were headed by executives tending more towards an external locus of control correlational analysis indicated a significant positive relationship between scanning and innovation challenges to the firm in the form of environmental dynamism and heterogeneity evoked positive innovatory responses but environmental hostility was a weak negative correlate inducing the firm to pull in its horns finally an abundance of resources encouraged proactiveness

state dependent pricing and the dynamics of money and output standard macroeconomic models of price stickiness assume that each firm leaves its price unchanged for a fixed amount of time we present an alternative model in which the pricing decision depends on the state of the economy we find a method of aggregating individual price changes that allows a simple characterization of macroeconomic variables the model produces a positive money output correlation and an empirical phillips curve in addition the impact of monetary shocks depends crucially on the current level of output which points to a natural connection between state dependent microeconomics and state dependent macroeconomics i introduction there is a long tradition in macroeconomics of attributing the real effects of nominal demand shocks to nominal price stickiness in this view if there is no change in prices when nominal demand rises then quantities must bear the burden of adjustment hence nominal price rigidity provides the friction needed for nominal demand shocks to be transmitted to the real economy standard models of this transmission mechanism such as fischer 1977 and taylor 1980 are based on the assumption that each firm leaves its price unchanged for a fixed amount of time the main reason for considering such time dependent pricing rules is their analytic tractability constraining firms to adjust their prices at prespecified times both simplifies the derivation of equilibrium strategies and allows the use of powerful time series techniques to analyze aggregate dynamics the main disadvantage of the timedependent approach is that between price adjustments firms are not allowed to respond even to extreme changes of circumstance this makes it difficult to know whether the qualitative effects of money in these models are the result of nominal rigidities per se or of the exogenously imposed pattern of price changes an alternative approach to modeling price stickiness is to allow the price setting decision to depend on the actual state of the

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

the timing and magnitude of retail store markdowns evidence from weekends and holidays we examine daily prices of eight goods at seventeen retail stores collected in ann arbor michigan over a four month period from november 1 to february 28 we focus on weekly and seasonal price patterns and on the frequency of price markdowns or sales there were frequent markdowns in the intensive shopping period prior to christmas and a tendency for such sales to occur on weekends we interpret these findings as evidence that a significant number of markdowns are timed to occur when shopping intensity is exogenously high we complement the imperfect information based motives for sales in the literature by contributing an additional element based on the role of bulk shopping and increasing returns in the shopping technology

technological innovation in canada a comparison of independent entrepreneurs and corporate innovators abstract this paper compares a sample of 124 independent high technology entrepreneurs with 112 corporate entrepreneurs intrapreneurs involved in developing and introducing high tech innovations across canada the study investigates the general management and technical problems faced by these entrepreneurs and contrasts their approach to such issues as market research financing and production the approaches used by the two groups in analyzing their markets and in planning and financing of innovations are compared and contrasted in general the independent entrepreneurs were technically trained usually possessing engineering training but no general management training or experience neither themselves nor members of their management team corporate entrepreneurs were as likely to come from management backgrounds as technical or else supported their lack of general management skills by adding people to their team with skills in marketing finance and manufacturing their problems were more often defending their ideas to management within the corporation obtaining funding and other resources within the firm and finding a corporate mentor to assist them in such areas as fighting political battles providing rewards and incentives for team members and creating the proper overall environment or culture for innovation within the corporation the lack of general management training and experience by the independent entrepreneurs led them to rate various marketing problems as the most serious difficulties in rating the obstacles to launching their innovations the innovations of the independent entrepreneurs were all new products while some of the corporate innovations were new systems or processes often installed within the corporation so the markets for these innovations were also within the corporation and required less of a marketing effort corporations were also much better prepared to handle problems in the marketing planning and operational areas but they had more problems of an interpersonal nature such as the unwillingness to consider alternative approaches the most significant difference in the obstacles encountered was that independent entrepreneurs listed their five most important problems as marketing difficulties in launching their new products corporate entrepreneurs also rated imperfect market analysis as their most important problem but it was closely followed by the lack of entrepreneurial talent within the company these obstacles lead to the primary recommendation of cooperative agreements of partnerships between large and small firms to solve some of these difficulties corporate responses indicated significant difficulty in gaining support within the corporation while independent entrepreneurs did not have to justify their efforts to a corporate hierarchy

a stage contingent model of design and growth for technology based new ventures abstract stage of growth developmental models have traditionally been used to enhance our understanding of the organizational creation and growth process until recently most of this literature has been primarily conceptual and descriptive this paper presents a stage of growth model theorized to hold for technology based new ventures the model consists of four stages conception and development commercialization growth and stability and views each stage of growth as a reflection of the dominant problems faced over the course of growth by the venture the model predicts that the organization of a venture will be a function ofthe dominant problems that define a stage of growth more specifically it is argued that a technology based venture s rate of growth depends in part on the consistency or fit between its stage of growth and certain structural features of its organization including decision making centralization and formalization and functional specialization in the areas of marketing and sales manufacturing and engineering technology data were collected from 105 technology based ventures in the electronics computer and peripherals industries to test the model the results were generally consistent with the theory and showed that centralization of decision making decreased as the firms moved to higher stages while formalization of decision making increased in higher stages specialization of roles in the functional areas of manufacturing and marketing also increased by stage however specialization in the engineering and technology functions remained high across all stages the contingency hypothesis was also supported indicating that technology based ventures growth is partially attributable to the fit between a venture s stage of growth and aspects of its structure these findings indicate that different patterns of decision making and functional specialization are required at each stage if growth is to be achieved as such this research validates a long standing but untested belief in the venture management field that performance of new ventures depends upon

the anatomy of job loss and job creation some speculations on the role of the producer service sector wood p a 1986 the anatomy of job loss and job creation some speculations on the role of the producer service sector reg studies 20 37 46 studies of recent employment trends in the united kingdom have highlighted job losses arising from restructuring by large manufacturing firms this paper examines the relationships between this and other shifts in labour demand emphasizing the complexity of change and especially the growing importance of producer services jobs are likely to continue to be transferred between increasingly interrelated manufacturing and service activities and the corporate and competitive segments of the economy the implications of these trends for sub regional economic change are examined and areas are identified which may be particularly favoured by producer service employment growth these include london industrial towns in the south east and freestanding cities and non industrial towns in the north

the changing geography of producer services employment in britain gillespie a e and green a e 1987 the changing geography of producer services employment in britain reg studies 21 397 411 this paper examines the changing geography of producer services employment in britain between 1971 and 1981 using data from the census of employment the study begins with a review of alternative views on the service sector and its relationship to economic growth and the place of producer services within the division of labour is described it is shown that there is a pronounced urban and regional differentiation in producer services employment factors operating to increase the concentration of such employment are indentified as are counteracting tendencies favouring deconcentration individual producer services industries are shown to display different locational logic and varying trends of concentration and deconcentration during 1971 81 overall the maintenance of the spatial concentration of producer services employment in southern britain coupled with relative decon

menu costs and the neutrality of money a model of endogenous price adjustment under money growth is presented firms follow s s pricing policies and price revisions are imperfectly synchronized in the aggregate price stickiness disappears and money is neutral the connection between firm price adjustment and relative price variability in the presence of monetary growth is also investigated the results contrast with those obtained in models with exogenous fixed timing of price adjustment

menu costs firm strategy and price rigidity abstract after controlling for chain specific effects higher menu costs are associated with a slight decrease in the probability of a price change and an increase in the size of a price change firm strategy is more influential in determining the incidence and magnitude of a price change

an empirical test of a stage of growth progression model this paper presents a stage of growth model for technology based new ventures tbnvs tbnvs are postulated to evolve through four discrete stages of growth conception and development commercialization growth and stability based on a longitudinal sample of 71 ventures in the computer and electronics industries the hypothesis that tbnvs progress according to this model is tested using the del procedure for prediction analysis of cross classification tables the hypotheses are supported although not all firms progressed as expected these results suggest that some variation in interstage transition patterns are due to a progression imperative

the new keynesian economics preface 1 from keynesian to new keynesian economics 2 keynesian microfoundations in historical perspectives part i real rigidities 3 the labour market and real wage rigiditry 4 credit rationing and imperfect capital markets 5 real rigidities in the goods market part ii nominal rigidities introduction 6 rational models of irrational behaviour 7 price setting with adjustment cost 8 real and nominal price rigidity further issues part iii coordination failures and hysteresis 9 coordination failures 10 hysteresis conclusions

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

the output inflation trade off when prices are costly to change the output inflation trade off is investigated in a rational expectations equilibrium economy in which costly price setting makes it inefficient for agents to vary their prices at every instant it is shown that sticky prices are not some exogenous source of output fluctuation but result from the monetary policy process an economy with slow and counterinflationary money growth exhibits staggered changes in sticky prices as assumed in some new keynesian analyses an economy with fast money growth and a high degree of monetary accommodation exhibits either flexible prices or bunched frequently changing sticky prices

business services the regions and regional policy marshall j n 1985 business services the regions and regional policy reg studies 19 353 363 the decline of employment in manufacturing industry in the uk has encouraged a more favourable treatment of services in regional policy an analysis of the employment prospects for private services suggests further modest growth and justifies the inclusion of such services in a policy package however service employment creation in less prosperous regions has been relatively limited an analysis of business service industries attempts to account for the changing location of service activity and derives implications for regional policies in an increasingly competitive market for services organizational restructuring assisted in some services by computer based technology has encouraged the decentralization of employment from london predominantly to the greater south east regional policy is unlikely to operate in such a favourable economic context in the immediate future rationalization investment is

facilitators of organizational innovation the role of life cycle stage abstract one of the most serious challenges facing an entrepreneurial company particularly a high technology firm is knowing how to manage innovation as the organization evolves macro level facilitators inhibitors of innovation i e organizational and environmental conditions of a firm that promote or restrain innovation such as the structure of an organization its incentive system resources provided by its environment or its ways of analyzing firm external information and their relationship to the innovativeness of the firm are considered in this study two basic arguments have been put forward previously as to why the innovativeness of an organization may change as it evolves first it has been suggested that facilitators of innovation change over time and so will firm innovativeness that is the relationship between the facilitator and innovation stays unchanged but the facilitator itself is transformed causing changes in firm innovativeness as it develops for instance it has been suggested that mature firms become less innovative because their structure becomes overly formalized to perform other functions more efficiently which then stifles innovative processes second other researchers have proposed that the relationship between a facilitator and innovation changes as firms evolve for instance a formal structure may support innovation in a younger firm because it allows the entrepreneur to focus her energy whereas it may suppress innovation later since it inhibits an innovator s interaction with other environments the results of our analysis using data from 326 u s firms in different stages of their development and involved in many kinds of high tech industries support the second theory however the results for the relationships of the individual facilitators to innovation were not always as expected we found that formally structured young firms were less innovative than informal ones and that in older organizations formalization had no negative impact on innovation this finding possibly can be explained with micro level facilitators of innovation younger firms may have more entrepreneurial personnel whose ability for innovation is more inhibited through a formal structure than the more seasoned employees in older larger firms however this finding implies that the concern for formal structures with respect to firm innovativeness does not necessarily apply as typically assumed of similar significance was our finding with respect to the relationship between financial incentives and innovation it has been suggested that younger rather than older firms use incentives such as equity to encourage an innovative environment results of this research however show that innovation is associated with stock incentives especially in older firms this may be an indication for older firms to use differentiated incentives that reflect the individual s contribution to the firm to retain innovative personnel whereas start ups might rely on the excitement of working in a new venture as an incentive for innovative behavior more in line with expectations were the results for how firms process external information environmental scanning and data analysis were positively associated with innovation and this more so in older firms presumably because they have become more remote from developments outside the organization this result confirms the notion that much innovation by a firm is initiated externally however the results also indicate that the conditions of the environment itself are of lesser importance to firm innovativeness than the firm s active pursuit of information from its environment an often discussed implication of these findings is that the boundaries of a firm must be permeable at least from the outside in and systematic information gathering from customers competition research institutions etc may be necessary to the success of a firm that depends on its product development this seems especially important for older firms as expected the centralization of power in an organization also affected innovation centralization correlated positively with innovation in new ventures and negatively in older firms this indicates the importance of the entrepreneur and strong leader in a start up it also suggests though that as the firm matures this person has to give up some of her control and may have to relinquish the job at the head of the organization to someone else finally there are some more general implications of this work to managers involved with organizational innovation first reliance on past experience may be detrimental to future performance whereas a firm evolves through different stages means that have facilitated innovation earlier may be detrimental to it now or tomorrow and vice versa second copying successful strategies for innovation from other firms may not necessarily work not because their implementation was worse but because the conditions of the other firm for instance its evolutionary stage or its micro level facilitators were different researchers who study innovation should consider including life cycle stage as a potential moderating variable factors that facilitate innovation at some point during an organization s evolution actually hinder it in another also factors that were unimportant to innovation at the inception of a firm may facilitate it in later stages this study supports the conclusion that the consideration of contingency factors such as life cycle stage may enhance the development of a theory of organizational innovation

relation of dominant problems to stages of growth in technology based new ventures two studies investigating the growth patterns of new ventures are presented in the first study a stage of growth model theorized to apply specifically to technology based new ventures was develop

menu costs firm size and price rigidity abstract if menu costs have a non negligible lump sum component and with larger firms having greater benefits from price adjustments then larger firms will change price more frequently than smaller firms data from new zealand firms support this hypothesis price duration decreases as firm size increases ordered probit analysis indicates the effect comes primarily from larger firms being more likely than smaller firms to raise price in response to a demand or cost increases

sticky prices new evidence from retail catalogs this paper presents new results on the size frequency and synchronization of price changes for twelve selected retail goods over the past 35 years three basic facts about the data are uncovered first nominal prices are typically fixed for more than one year although the time between changes is very irregular second prices change more often during periods of high overall inflation third when prices do change the sizes of the changes are widely dispersed both large and small changes occur for the same item and the sizes of these changes do not closely depend on overall inflation

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

optimal pricing with costly adjustment evidence from retail grocery prices in many theoretical models it is assumed that there are costs associated with adjusting prices in this paper the existence type and magnitude of such costs are investigated empirically a discrete choice dynamic programming model that nests fixed and variable costs is developed and econometric estimates of the adjustment cost function are obtained the data used to implement the model consist of weekly retail prices and sales of three brands of saltine crackers sold by four chains of grocery stores in a small u s town the study has several distinguishing characteristics first the data are highly disaggregate at the level of brand and store second variables are sampled at weekly intervals third the model nests fixed and variable adjustment costs and can therefore determine their relative importance finally the discrete choice model is both structural and dynamic

the magnitude of menu costs direct evidence from large u s supermarket chains we use store level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains we show that changing prices in these establishments is a complex process requiring dozens of steps and a nontrivial amount of resources the menu costs average 105 887 year per store comprising 0 70 percent of revenues 35 2 percent of net margins and 0 52 price change these menu costs may be forming a barrier to price changes specifically 1 a supermarket chain facing higher menu costs due to item pricing laws that require a separate price tag on each item changes prices two and one half times less frequently than the other four chains 2 within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law in principle fixed costs of changing prices can be observed and measured in practice such costs take disparate forms in different firms and we have no data on their magnitude so the theory can be tested at best indirectly at worst not at all alan blinder 1991 p 90

changing competitive advantage in a local economy the case of coventry 1971 90 this paper examines the application of porter s analysis of the competitive advantage of nations to understanding why one british local economy coventry changed from a position of relative competitive disadvantage during the 1970s and early 1980s to one of advantage during the remainder of the 1980s each of porter s four determinants of competitive advantage supply conditions demand conditions firms and clusters of activities was found to have had some influence on explaining the change in coventry s competitive advantage with the qualification that analyses focus on processes of change and account is taken of the alterations in emphasis needed by changing the scale of analysis from national to local economies porter s ideas deserve a wider application and critical examination than they have hitherto received in local and regional economic studies

aggregation and optimization with state dependent pricing the literature on the aggregation of s s policies has ignored the impact of aggregate behavior on the individual s optimization problem in the case of pricing the feedback effects are clear not only do pricing strategies determine the evolution of the price level but the evolution of the price level also influences the optimal pricing strategies in this paper we provide a consistent treatment of aggregation and optimization we use this model to analyze three issues in the menu cost pricing literature the relationship between strategic complementarity and the real effects of money the relationship between the variance of the money supply and the correlation between money and output and the relationship between the cost of price adjustment and the size of price adjustment questions concerning the dynamics of aggregate variables such as prices employment investment and consumption represent the core of business cycle analysis one striking feature of these variables is the radical difference between properties of these aggregates and the nature of the individual behavior that underlies them the behavior of a firm s prices investment and employment and the behavior of an individual s consumption all involve frictional elements that lead to discrete adjustment at the microeconomic level heterogeneity among individuals however tends to smooth the behavior of the corresponding aggregates in recent years a large body of research has developed to examine the manner in which microeconomic frictions influence aggregate dynamics one of the centerpieces of this research has been the s s model developed by arrow harris and marschak 1951 the key element of this model is the state dependence of individual decisions agents act when a state variable crosses some critical threshold which balances the cost and benefits of adjustment the aggregate implications of this form of microeconomic behavior have been analyzed by blinder 1981 caplin 1985 and mosser 1991 in the context of inventory dynamics by caplin and spulber 1987 caballero and engel 1991 1993 and caplin and leahy 1991 in the context of prices and by bertola and caballero 1990 caballero 1993 and eberly 1994 in the context of con sumer durables one of the most limiting aspects of these models is that they focus exclusively on the impact that microeconomic inertia has on aggregate dynamics they 1we would like to thank michael harrison loannis karatzas john leahy sr andreu mas colell a co editor and four anonymous referees for helpful discussions and comments and the national science foundation and the sloan foundation for financial support

producer services trade and the social division of labour goe w r 1990 producer services trade and the social division of labour reg studies 24 327 342 several hypotheses have been advanced to explain the growth in employment and output of producer services industries in us metropolitan and regional economies one hypothesis contends that this growth is attributable to the increasing externalization of service activities by corporate managerial offices to independent producer services firms this has contributed to the growth of corporate complex agglomerations in urban regions manufacturing industries have traditionally been viewed as being the motivating force underlying this growth a second hypothesis contends that the growth of producer services industries is attributable to their evolution into basic industries and the growth of export trade this paper examines the validity of these hypotheses using data collected from a survey of business establishments in producer services industries located in the four metropolitan areas of the northeast regi

yesterday s bad times are today s good old times retail price changes are more frequent today than in the 1890s this paper documents differences in the nominal rigidity of retail prices across two 28 month periods 1889 91 and 1997 99 the most striking finding is that prices changed much less frequently in 1889 91 in the late 1800s when price changes did occur they were smaller on average and more narrowly distributed with fewer small or large price changes further price changes were more permanent 100 plus years ago these differences are consistent with a high occurrence of temporary price shocks and a higher cost of changing prices in 1889 91 than in 1997 99

corporate venturing obstacles sources and solutions abstract there is a fundamental conflict between new venture and mature company management requirements as an enterprise evolves the focus for success shifts from sensing and seizing opportunity to protecting and utilizing the resources that have been acquired in surviving companies management practices change to accommodate this changing need the conflict arises when the mature company attempts to initiate internal new venture activities application of mature company practices to management of new corporate ventures is not only inappropriate but breeds failure to succeed with new ventures top corporate management must first understand the inherent differences in management needs for new ventures versus the mature organization and must then adapt a pluralistic management style that accommodates both needs this paper examines the rationale for ten establishment practices and the adverse effects they can have on new ventures from this analysis alternative entrepreneurial management practices are recommended the ten management practices examined are 1 enforce procedures to avoid mistakes 2 manage resources for efficiency and roi 3 control against plan 4 plan long term 5 manage functionally 6 avoid moves that risk the base business 7 protect the base business at all costs 8 judge new steps from prior experience 9 compensate uniformly and 10 promote compatible individuals some of the adverse effects of these practices include blockage of innovative solutions loss of competitive lead time entrepreneur failures high venture failure costs missed opportunities fluctuating venture strategies misread markets reduced motivation to take risks and loss of innovative employees recommended entrepreneurial management practices include restricting standard procedures to those appropriate for the venture controlling ventures by milestone planning rather than calendar budgets being more responsive to market feedback in adjusting plans focusing on critical issues for early determination of venture viability assessing and choosing affordable risks and making venturing a mainstream function of the business

what is new keynesian economics this research was supported by the national science foundation i am grateful to george williams for help with the data and to steven allen laurence ball olivier j blanchard timothy bresnahan charles calomiris dennis carlton robert chirinko russell cooper stanley fischer herschel grossman r glenn hubbard david laidler john leahy assar lindbeck n gregory mankiw david romer julio rotemberg dennis snower john taylor andrew weiss and two anonymous referees for comments on one or more earlier drafts i am also indebted to michael parkin and edmund s phelps for helping to establish the etymology of the phrase new keynesian

the human side of open innovation the role of employee diversity in firm level openness abstract the use of external knowledge for innovation i e inbound or outside in open innovation has received substantial attention in the innovation literature however the human side of open innovation is still poorly understood we consider the role of employee characteristics with respect to predicting firm level openness drawing on the human capital learning and creativity literatures we theorize that knowledge diversity of the firm s employees is positively associated with employees ability to identify and absorb external knowledge which aggregates to increased firm level openness that is firms use of external knowledge in their pursuit of innovation based on a combination of three data sources namely two survey data sources and register data we find support for our hypothesis that employees educational diversity is positively associated with firm level openness however we find no direct association between employees work history diversity and firm level openness but rather as also hypothesized a conditional relationship based on educational background which implies that diverse work history only has a positive impact at higher levels of educational diversity to reduce endogeneity concerns we undertake a series of robustness checks

inflation and costly price adjustment a study of canadian newspaper prices the paper studies the effect of inflation on price behaviour using price data from canadian daily newspapers we test the sheshinski and weiss 1977 monopoly price adjustment model on a sample of monopolistic as well as oligopolistic newspapers in contrast to earlier studies that used data from oligopolistic or monopolistically competitive markets the results depend crucially on the assumptions about how often the firm collects information and revises its optimal pricing policy with infrequent policy revisions the results for monopoly newspapers support the model the results for oligopoly newspapers are similar

patterns of growth competitive technology and financial strategies in young ventures abstract young independent technology based ventures have an increasingly complex array of strategic choices about how they can grow while simultaneously competing on the basis of their technological capacity and skills in their markets given the central importance of these choices to the success of the venture there should be a close integral relationship among them similarly financial strategy choices also enter this relationship growth and competition place tremendous resource demands on the young technology based venture and financial strategy choices therefore must also be factored into the choice taking process the choice taking perspective is basic to this inquiry as other researchers have pointed out young entrepreneurial ventures typically do not utilize highly formalized strategic planning processes robinson and pearce 1983 strategy formation in such firms tends to be informal and episodic strategy may be revealed best through the pattern or set of choices taken at a point in time and over time from a choice taking perspective then the critical questions become the following a are there identifiable patterns of growth technology and financial choices b what factors shape or determine which choices are taken and c are these patterns related to venture performance these questions were explored by using data from a survey of 100 ceos of young independent technology based firms across three industries the results generally support the idea that patterns of choices can be identified several of these patterns are related to the ventures demographic characteristics such as form of ownership and scope of sales importantly stage of development was not related to those patterns nor to the performance of the ventures the highest performing ventures were found to be pursuing internal innovation through r d for product breakthroughs this finding is surprising since young ventures at the stage at which most were found in this sample would traditionally be expected to emphasize product extensions and modifications we need to better understand why young ventures would choose to innovate internally for breakthroughs in their growth stages and how well they are able to do so a major implication of this research is that the ceos of young technology based ventures are being presented with a much larger menu or array of choices at many points in time than conventional stage based models of venture development have postulated one explanation of this possibility is that the firm life cycle is being compressed by relatively new conditions such as the availability of more and earlier capital through joint venturing and alliances and shorter product life cycles indeed a follow up survey a year later with 77 ceos from this sample confirmed that joint ventures and alliances were the number one choice being pursued to gain access to distribution channels and new markets what is troubling about this possibility is that the skills and capacities of these young ventures may be limited in comparison with the richness and complexity of the available choices in the follow up survey the sources of information that were by far the most relied upon for strategic decision making were other internal senior managers and board members outsiders such as lawyers ranking distantly behind the leaders of these ventures need to be fully supported in evaluating negotiating and managing these often highly complex relationships