a profile of new venture success and failure in an emerging industry abstract this study examined three types of factors 1 the characteristics of the lead entrepreneur 2 startup processes undertaken during the founding of the firm and 3 firm behaviors after start up including management practices and strategic behaviors associated with new venture success and failure the research involved a field study of 26 small young firms 13 successful and 13 less successful or failed each engaged in the distribution of fresh juices in eight metropolitan centers about 30 of the total market in the united states both quantitative and qualitative data were collected through field work at each firm location a statistical analysis of data collected in a structured questionnaire was the primary method for testing the factors case studies of all of the firms were developed to provide qualitative support for the quantitative findings of the study results from these analyses indicated significant differences between successful and unsuccessful firms in all three categories lead entrepreneurs in successful firms were more likely to have been raised by entrepreneurial parents have had a broader business and more prior startup experience and believed they had less control of their success in business than unsuccessful entrepreneurs successful entrepreneurs seek to reduce risk in their businesses they work long hours have a personal investment in the firm and are good communicators successful firms were those initiated with ambitious goals lead entrepreneurs had a clear broad business idea which provided the adaptive torque required to overcome adversity confrontation and often a troubled financial condition effective startup or purchase required broad planning efforts that considered all aspects of the industry and firm successful firms spent more time planning 237 hours than unsuccessful firms 85 hours the use of outside professionals and advisors for help in solving specific problems during startup was important for success as well as the advice and information provided by other industry participants particularly customers and suppliers most ventures did not have written business plans nearly all purchased firms failed buyers of competitively troubled firms were negatively displaced generally unemployed managers who lacked broad management experience and while often well educated had no prior experience in purchasing a business successful firms were found to be more flexible participative and adaptive organizations these firms had employees who could perform the work duties of others and were likely to be managed in a way that provided these workers with the flexibility to modify their jobs to adapt to changing industry and organizational conditions lead entrepreneurs of successful firms were likely to spend more time communicating with partners customers suppliers and employees than the lead entrepreneurs of unsuccessful firms successful firms sought to become larger firms and embarked upon sales to broad sectors of the market successful firms achieved high market shares with market shares came higher financial returns less successful firms were restricted to narrow market sectors consisting of smaller customers and those more difficult to service while customer service remained an important concern the commodity nature of fresh juices failed to support differentiation and the narrowly focused firm was typified by high product costs and unprofitable operations

contours of development abstract new ventures seem to suffer more difficulties and business failures than do established firms also there is a pattern to the mortality with most newly founded businesses lasting only a few years explanations of high failure rates in new ventures have often centered on poor management or have postulated that firms chose inappropriate strategies for their markets and economic environments the present article conceives of new venture mortality as similar in nature to patterns of development that we observe for instance in human embryos or in the formation of new species that is development is an inherently hazardous process some of the specific hazards of development are 1 1 generic entry barriers it is generally not possible for a new firm or product to successfully enter an already crowded stable market where competitors are strong it is more feasible instead to enter a new or growing market or to enter with a substitute product that is clearly superior to those existing or to exploit an unnoticed market opening or to develop competitive strengths secretly without overtly challenging others in the industry 2 2 density of developmental hurdles any new entity must clear a sequence of important hurdles on its way to maturity such as establishing a well ordered office a functional sales channel etc failure at any one hurdle is potentially fatal and a mathematical analysis shows that the likelihood of passing even 10 hurdles in a row is about one in three the earliest hurdles tend to be the most difficult and to crowd more densely than later hurdles particularly troublesome are phase changes where a company first starts business or becomes one thing rather than another within a short period of time 3 3 amplification of maturational error any complex system that grows rapidly and is unable to predict the future perfectly is going to accumulate structural errors that become very difficult to remedy this is a natural and inevitable developmental process as the system grows in complexity and the flaw itself becomes a pillar of the system if an imitator or competitor arrives soon afterward and spots the error he or she will easily be able to retool and redesign a better system whereas the first firm is stuck with old habits tools dies and production methods 4 4 sequence and control in development every embryonic organism has a design template outlined in its dna that is carefully followed both the developing fetus itself and the mother have monitoring and control mechanisms that trigger an abortion if the development process goes awry new ventures lack such mechanisms they are more susceptible to developmental deviance likely to differ from the model successful corporation of their type 5 5 smallness and the asymmetry of luck small things are more subject to the whims of fate than big things amount of resources is the key because new ventures typically start off with scarce resources a bad bounce can sink the company and the probability of at least one such bad bounce is high 6 6 costs of organizing like all of the larger brained mammals a new company such as a medical supply firm must learn through experience much of what it means to be mature costs associated with learning arrive just when the firm is most vulnerable and distracted by other challenges in one sense the message of this article is good news in that managers of failed enterprises need not assume all the blame after all if most new businesses do poorly then failure is the average or typical case and it makes little sense to say that the average manager is poor the bad news is that if our perspective is correct managers of new ventures have less scope to influence the success of their enterprises than is commonly believed the managerial recommendations that emerge are that new ventures are more likely to succeed to the extent that they have sponsorship or capital have managers with a range of experience in previous ventures are given extra assistance of shelter or can ensure a high probability of passing all of the hurdles faced by a new venture

entrepreneurial success and failure confidence and fallible judgment excess entry or the high failure rate of market entry decisions is often attributed to overconfidence exhibited by entrepreneurs assuming that these decisions depend on assessments of business opportunities we model boundedly rational entrepreneurs and show analytically that whereas excess entry is an inevitable consequence of imperfect judgment it does not necessarily imply overconfidence indeed judgmental fallibility can lead to excess entry even when all potential entrepreneurs are underconfident we further demonstrate that as a group individuals who decide to start a new business exhibit more confidence than those who do not and that successful entrants are less confident than failures our results therefore question general claims that overconfidence leads to excess entry we conclude by emphasizing the need to understand the role of judgmental fallibility in producing economic outcomes and implications for both venture capitalists and the training of entrepreneurs

performance factors of small tourism ventures the interface of tourism entrepreneurship and the environment abstract performance factors of small israeli tourism ventures were examined using an integrated model that combines four theoretical approaches each focusing on a different central facet environmental milieu institutional support entrepreneurial human capital and the venture s bundle of services the current research developed an operational instrument for assessing environmental attractiveness components of tourism ventures and their relationship to performance a factor analysis based on this instrument revealed three environmental factors tourist related infrastructure options for excursions and scenery including climate an attractive environment contributed to higher revenues in tourism ventures however it did not assure profitability the results indicate the dual nature of the impact of institutional support upon the tourism venture s performance regardless of the size and age of ventures those obtaining the advisory type of assistance from the governmental tourism incubator performed less well than those ventures that did not obtain such support by contrast those tourism ventures that were financially supported by external sources performed better than those that were not financially supported the explanation for this curious and seemingly contradictory finding may lie in the different criteria for receiving financial and advisory assistance success in persuading external sources to provide financial support would seem to be evidence of the soundness of the venture s planning and its economic viability by contrast insofar as virtually any venture in the area may apply for and obtain advisory assistance from the governmental tourism incubator with no requirement to meet financial criteria of any kind it could be that precisely the weaker ventures are being carried along by this form of assistance among the various entrepreneur s attributes examined managerial skills provided the strongest association with the performance measures the managerial skills were also found to be the most significant variable explaining performance relatively to the variables derived from the other three approaches these results have implications regarding the nature of the support to be given by a governmental tourism incubator to entrepreneurs operating in the region given that lack of managerial skills is one of the main barriers to a venture s success particularly in small businesses where the owners have to be involved in all areas of activity the incubator needs to provide entrepreneurs with tailored regional business and management training tools to promote tourism venture development and success the study also reveals that the number of services offered by a tourism venture made only a minor contribution in the revenues regression which may indicate that providing a bundle of services for the tourist customer does not necessarily guarantee profitability a noteworthy finding is the similarity in the differential association between the number of services offered and the performance measures on the one hand and attractiveness features with performance on the other in both cases these factors positively contribute to the revenues regression but neither contributes to the profitability or income regression this means that an attractive environment does contribute to higher revenues in that more tourists choose to visit the tourist attractions however this does not assure profitability similarly providing many services to the visitors may also contribute to higher revenues but does not necessarily assure profitable business outcomes the current findings indicate that small tourism venture profitability is contingent on human capital especially the skills of the entrepreneurs running the venture in accordance with our findings that managerial skills are so crucial for venture success the main objective of advisory incubators should be to promote managerial competencies

new venture internationalization strategic change and performance a follow up study abstract although many scholars business experts and government agencies enthusiastically advise all firms including new and small ventures to internationalize such advice does not appear to be based on empirical evidence few researchers have empirically examined the link between new venture performance and the internationalization of new ventures at best the evidence suggests that there is no significant relationship we used a sample of 62 u s new venture manufacturers in the computer and communications equipment industries during the late 1980s these industries were purportedly globalizing and may have been leading other industries into increased international operations we found that higher levels of internationalization percentage of foreign sales to total venture sales were associated with higher relative market share two years later however there was no significant direct relationship between percentage of international sales and subsequent return on investment roi perhaps international operations simply cost more than expected or perhaps as macmillan and day 1987 found in their study of corporate ventures over a 4 year time period increases in market share may be a prelude to higher roi as scale benefits translate into higher profitability however the 2 year time period of our study may simply not be long enough for investments in higher market shares to produce improved profits during the 2 year study period many of the ventures changed their level of internationalization of the 36 ventures who were domestic no international sales in the prior study 10 expanded into international markets over the 2 years of the 26 originally international ventures international sales of at least 5 half increased their percentage of international sales nine reduced it and four stayed the same whereas the average change in international sales percentage of the ventures was only 2 9 percentage points the large standard deviation of 13 0 percentage points and the leptokurtic distribution 9 2 reflected the dramatic changes made by some of the ventures using subgroup analysis we examined these changes in percentage of international sales in conjunction with changes in strategies and performance ventures that had increased international sales relative to those that had not exhibited more positive associations between the degree of strategic change and performance as measured in terms of both relative market share and roi increased international sales in technology based new ventures seems to require simultaneous strategic changes in order to positively impact venture performance this study is a follow up to mcdougall s 1989 finding that technology based new ventures that had sales in foreign markets had significantly different strategies than similar ventures that sold their products only domestically the current study enriches the previous findings by adding consideration of 1 changes in degree of internationalization 2 changes in strategy and 3 venture performance although we found no performance penalty associated with increasing international sales alone indiscriminant advice for new ventures to sell in foreign markets without other supporting strategic actions is inconsistent with our findings internationalization alone did not lead to increased profitability entrepreneurs of young technology based firms who are considering internationalization should take heed of our results internationalization of sales does not appear to be a simple matter of applying established strategies and procedures developed for a domestic arena successful internationalization appears to require changes in the venture s strategy as well

a comparison of japanese and u s firms completing initial public offerings abstract we set out to examine firms breaking into the top tier of for profit companies in the u s and japan to find differences across the two groups to accomplish this we conducted a questionnaire survey of companies that had recently undergone an initial public offering ipo in each country and compared them on characteristics frequently associated with new firms as we expected even when the different sizes of the two economies were taken into account there were considerably fewer listings in japan than in the u s one reason for this is that the listing requirements for young japanese firms although not stricter are much more strictly enforced hence fewer japanese firms are able to list our results show that the japanese firms were markedly different from their u s counterparts on several characteristics they tended to be older and larger which is consistent with more stringent listing requirements in japan they were also much more often led by their original founders this is a surprising result given that the japanese firms being older had longer to lose their founders when a successor to the founder was president it was much more often a relative of the founder than in the u s the japanese founders rated themselves higher on relatively emotional characteristics such as aggressiveness paternalism and charisma than did either the u s presidents or the japanese nonfounder presidents the japanese firms relied solely on the president for decision making prior to the ipo more often than the u s firms did however the japanese firms also moved in greater numbers to group decision making around the time of the ipo the post ipo investment strategies of the japanese firms were characterized by a focus on new product development an increase in r d spending and investment in the company s capital plant in contrast the u s firms reported more interest in exploiting their existing market and buying other companies usually leaving r d spending at its pre ipo level overall it is surprising that on many characteristics the japanese ipos tended to fall more to the extreme associated with new companies than did the u s firms they were dominated by founder influence the founders were apparently highly emotional their management style was initially autocratic and their strategies targeted innovation and internal development as avenues to growth this pattern is consistent with a prior hypothesis that the lack of structural support for new firms in japan results in only the most extreme personalities pursuing and succeeding in company formation for researchers a significant implication of this research is that japanese ventures may not behave according to the same rules as u s ventures research samples that fail to distinguish nationality may obscure cross regional variations for practitioners the major lesson is that a japanese venture is likely to be much different from one in the u s dealing with one is probably even more unlike dealing with an established company than working with a u s start up might be

a longitudinal study of the competitive positions and entry paths of european firms in the u s pharmaceutical market this paper combines the statistical insights of dynamic strategic group analysis with the qualitative richness of historical analysis to explore the modes of entry expansion paths and competitive postures of european firms in the u s pharmaceutical market patterns of entry and market development over a 20 year period are analyzed the roles of strategic assets and competencies in determining both the entry strategy and the final competitive posture of these firms in the u s market are discussed

entry order market share and competitive advantage a study of their relationships in new corporate ventures abstract this research explored the extent to which entry order the decision to enter a market early as a pioneer or to wait and follow determines not only market share but other competitive factors such as position and promotion that late entrants might hope to employ to overcome a pioneer s advantages the study analyzed data on 119 nonservice new corporate ventures consumer and industrial from the profit impact of marketing strategy pims research data base str4 based on a review of the strategic management and marketing literatures three hypotheses on the effects of entry order were generated and subsequently tested the first hypothesis states that pioneers achieve higher market shares than followers since a priori the market share for the pioneer has to be larger than the market share split among later entrants the issue is the rate at which the early entrant s market share will decrease as additional businesses enter what we term the degree of lateness effect later entrants have the choice of being an early follower that is entering the industry soon after the pioneers or waiting until the industry matures late entrants a high degree of lateness effect would indicate that early followers would gain higher market shares than late entrants an analysis of the data indicated that pioneers have significantly higher market shares than followers and that little degree of lateness effect existed between early and late entrants the second hypothesis states that pioneers will achieve differentiation advantages in such areas as product and service quality promotion and technological positioning greater than followers there is considerable theoretical and empirical evidence that pioneers are able to generate competitive advantages through name recognition image leadership the establishment of technical standards which make switching to other products difficult and superior consumer information advantages due to market lead times an analysis of the data indicated that pioneers have significant competitive advantages in product service quality and technology over followers the one area where pioneers did not have a competitive advantage over followers was in advertising and promotion the third hypothesis states that followers will achieve cost advantages greater than pioneers while learning curve theory suggests that pioneers will enjoy cost price advantages contrasting arguments can be made that followers can enjoy lower costs by coattailing on the pioneer s efforts to educate consumers develop a dominant design and create an infrastructure to span the gap from raw material suppliers to finished good deliveries we suggest that because pioneers are likely to have attained differentiation advantages followers will have only one alternative left compete on the basis of price and become the lowest cost producer an analysis of the data indicates that while followers do appear to have lower prices than pioneers followers do not have significantly lower cost structures this result implies a lower level of profitability for a follower strategy overall the results of this study advance the notion that new corporate ventures should enter as pioneers rather than as followers pioneers had higher market shares and stronger competitive positions higher quality more differentiated products and better service than followers followers appear to have few successful competitive options available outside of promotion for gaining market share

the impact of education experience and inner circle advisors on sme performance insights from a study of public development centers in this study we investigate the effects of entrepreneurial human capital on sme performance using data on 2 713 smes within the european union performance was measured in two ways profitability as roa and productivity as revenue per employee results indicate that both profitability and productivity are positively related to industry specific knowledge possessed by the ceo owner prior to starting up the firm and the general business knowledge acquired once the firm is up and running experience as a result of having previously worked in a firm in the same industry before starting a business was related to productivity but there is no relation with profitability there is a link between performance and inclusion of other ceo owners in the founder s inner circle of advisors this relationship is positive when the advisor s venture has experienced failure and negative when the advisor s venture has been successful we discuss the significance of these findings for research and practice

one or more growth processes evidence from new italian firms the paper proposes a descriptive model of firm growth which assumes that learning processes are conditional on existing competencies of the firm and its founders we suggest the idea that firms who do not grow under all realizations of potentially profitable opportunities can be considered as zero learning in order to explain why some firms are zero learning and how these are different from growing ones we put forward and discuss the hypothesis that both start up size and founders pre entry history affect the firm s ability to adjust to market using a sample of 3 905 italian firms born in 1999 and 2000 we find that individual competencies influence start up size but not directly growth we also find a significant nonlinear relationship between start up size and growth implying that firms which were born smaller than a given size grow significantly less the results support the hypothesis that multiple and heterogeneous growth processes coexist and that the growth process of microfirms below a given organizational threshold may be structurally different in the long run from that of firms starting up above that threshold

an examination of the influence of industry structure on eight alternative measures of new venture performance for high potential independent new ventures abstract this study examined the influence of the structure of new ventures entered industries on eight alternative measures of new venture performance for 199 high potential independent new ventures each of the 199 entrepreneurial ventures had undertaken an initial public offering ipo within the first 6 years of the venture s founding date and were free of corporate sponsorship or prior corporate parentage specifically this research examined the influence of 1 stage of the life cycle 2 industry concentration 3 entry barriers and 4 product differentiation on eight alternative measures of new venture performance the eight measures of new venture performance examined in this research consisted of 1 change in sales 2 sales level 3 net profit 4 earnings before interest and taxes 5 return on sales 6 return on assets 7 return on invested capital and 8 return on equity most prior research examining the influence of industry structure on new venture performance has 1 utilized only one or two measures of new venture performance as indicators of the venture s overall effectiveness and efficiency 2 often failed to provide theoretical justification for the measure s of new venture performance or industry structure examined and 3 utilized data derived from questionnaires and or the pims data base of corporate sponsored new ventures in addition prior industry structure studies examining independent new ventures have often utilized relatively small sample sizes this study sought to advance the progress in the field of entrepreneurship with regard to understanding the influence of the structure of new ventures entered industries on new venture performance by 1 examining eight alternative measures of new venture performance 2 providing theoretical justification for the measures of new venture performance and industry structure examined and 3 utilizing the largest nonquestionnaire data base of independent new ventures developed to date this research found that the stage of the life cycle of the venture s entered industry was the most important determinant of new venture performance among the four industry structural elements examined stage of the life cycle had a statistically significant relationship at a 0 05 level with the majority of the new venture performance measures examined in this research in addition ventures entering industries in the introductory stage of the life cycle achieved the highest levels of venture performance particularly when compared with those ventures that entered industries in the mature stage of the life cycle however this study did not find a statistically significant relationship between stage of the life cycle and change in sales this suggests that there is a trade off between profitability and sales growth and that new ventures that undertake an ipo have a stronger focus on achieving profitable operations rather than sales growth during the initial years after their ipo this may be due to pressures placed on the new ventures to achieve profitability by the external credit market conversely this research found that 1 industry concentration 2 entry barriers and 3 product differentiation did not have statistically significant relationships at a 0 10 level with any of the eight alternative measures of new venture performance examined in this research however this research did find that over 90 of the new ventures entered industries characterized by 1 a low degree of industry concentration and 2 a high degree of product differentiation the relative absence of new venture entry into industries characterized by 1 high degrees of concentration and 2 low degrees of product differentiation provides support for prior theory which suggests that successful entry into such industry environments may be substantially more difficult in sum the results of this research suggest that high potential independent new ventures that undertake an ipo should enter industries in the introductory stage of the life cycle in addition the results of this research suggest that industries characterized by 1 relatively low degrees of industry concentration and 2 highly heterogenous products may be necessary but not sufficient conditions for successful entry by high potential independent new ventures seeking to raise equity capital through an ipo

intangible assets entry strategies and venture success in industrial markets abstract this study assesses the impact of intangible assets on the venture success of firms as they enter into industrial markets that are new to them a new market is one that is geographically new for the firm or is a product market where this firm did not originally compete the analysis is based on the profit impact of market strategy database which contains information on 91 new ventures into industrial markets five hypothesis were tested in this study 1 h1 high levels of intangible assets will be positively associated with performance of firms entering new markets 2 h2 high levels of intangible assets increase the likelihood of success regardless of the timing of entry 3 h3 in explaining venture performance there will be a positive interaction effect between promptness of entry and level of intangible assets pioneer entrants will benefit substantively more from high levels of intangible assets then will later entrants 4 h4 high levels of intangible assets enhance success irrespective of aggressiveness of entry 5 h5 in explaining performance there will be a positive interaction between level of intangible assets and aggressiveness of entry firms with high levels of intangible assets will gain substantively more from aggressive pricing promotion and high quality than firms with low levels of intangible assets one specific intangible asset corporate image is empirically analyzed and the results support our hypotheses a strong corporate image enables the firm to achieve greater success when they enter into new ventures and the interaction of image with aggressive promotional pricing and quality strategies is significant in explaining this success implications for practioners are high image firms reap enormous benefits from increased promotional efforts high quality and aggressive entry low image firms are severely penalized when they aggressively enter a market and may he better off entering the market slowly and at low prices

contextual influences on the corporate entrepreneurship performance relationship a longitudinal analysis abstract over the past several years corporate entrepreneurship has been widely touted by executives and researchers alike as an effective means for revitalizing companies and improving their financial performance for the most part the call for greater entrepreneurial behavior on the part of established companies has been accepted on faith as an inherently desirable objective the implicit logic behind the pervasive belief in the value of corporate entrepreneurship seems to be that risk taking innovation and aggressive competitive action the key elements of entrepreneurial corporations will help in identifying and pursuing lucrative product market opportunities and in providing new bases for achieving superior competitive positions but what do we really know about the financial consequences of corporate entrepreneurship most of the evidence that corporate entrepreneurship pays off is anecdotal in nature or based on cross sectional studies that focus on the short term implications of entrepreneurial behaviors as such in a definitive sense we know very little about the financial consequences of corporate entrepreneurship in an attempt to improve our understanding of this issue this article describes a study of corporate entrepreneurship and its impact on company financial performance data were collected from three different samples over a seven year period to assess the longitudinal impact of corporate entrepreneurship on firm performance these samples consist of 24 medium sized manufacturing firms representing 14 industry segments 39 chemical companies and 45 fortune 500 industrial firms representing five industry segments data were gathered on each sample using both primary and secondary sources regression analysis was then used to analyze the data the results suggest that corporate entrepreneurship has a positive impact on financial measures of company performance this effect on performance which tends to be modest over the first few years increases over time suggesting that corporate entrepreneurship may indeed be a generally effective means for improving long term company financial performance moreover the results indicate that corporate entrepreneurship is a particularly effective practice among companies operating in hostile environments as opposed to benign environments the study has three principal implications for practicing managers first the study documents the general financial viability of engaging in corporate entrepreneurship this is not to suggest that corporate entrepreneurship is a panacea for improving financial performance however entrepreneurial behavior when considered on the whole i e across firms and industries is associated with superior financial performance second the study suggests a need to use a long term time horizon in order to adequately judge the financial consequences of corporate entrepreneurship the use of a shorter evaluation period may not allow sufficient time for entrepreneurial actions to have their full market and corresponding financial impact finally the study identifies the context specific character of effective entrepreneurial practice specifically corporate entrepreneurship appears to be a particularly effective strategic practice among firms operating in hostile business settings

employment change in independent owner managed high technology firms in great britain there is a growing volume of literature that points to the potential for small technology based firms to achieve substantial employment growth as a direct consequence of such work this sector of any economy has attracted increasing attention from national and local governments concerned with finding ways of revitalising economically deprived localities and creating employment opportunities this paper provides up to date empirical evidence surrounding the ability of small high technology firms to create additional jobs in great britain in addition key founder and business characteristics are isolated which are significantly associated with employment change in growing high technology firms over the 1986 to 1992 period with respect to factors influencing these high levels of employment growth a high firm size in 1986 was found to act positively on employment growth as was a graduate level education for the key founder on the finance side firms which had access to and used a multiplicity of sources of start up finance tended to grow faster futher on the basis of our results we would suggest and recommend a government policy which at the firm level actively encourages high technology firm start ups who record higher rates of survival than firms in more conventional sectors as well as providing support for existing high technology firms who have already demonstrated the inclination and ability to grow in employment size

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

moral hazard in insurance value based cost sharing and the benefits of blissful ignorance the conventional theory of optimal coinsurance rates for health insurance with moral hazard indicates that coinsurance should vary with the price responsiveness or price elasticity of demand for different medical services an alternative theory called value based cost sharing indicates that coinsurance should be lower for services with higher marginal benefits relative to costs this paper reconciles the two views it shows that if patient demands are based on correct information optimal coinsurance is the same under either theory if patient demands differ from informed demands optimal coinsurance depends both on information imperfection and price responsiveness value based cost sharing can be superior to providing information even if the cost of information is minimal when patient demands fall short of informed demands an extended numerical example illustrates these points

mathematical programming for the efficient allocation of health care resources previous discussions of methods for the efficient allocation of health care resources subject to a budget constraint have relied on unnecessarily restrictive assumptions this paper makes use of established optimization techniques to demonstrate that a general mathematical programming framework can accommodate much more complex information regarding returns to scale partial and complete indivisibility and program interdependence methods are also presented for incorporating ethical constraints into the resource allocation process including explicit identification of the cost of equity

discontinuance among new firms in retail the influence of initial resources strategy and gender abstract women owned businesses represent one of the fastest growing segments of the u s economy their rate has increased more than six fold since 1970 despite this growth rate the number of firms owned by women still lags behind that of men and the sales and income of women owned firms are significantly lower than those of men owned firms the discrepancy between the number of businesses owned by women and men and their economic success has been a popular theme among researchers some have suggested that performance differentials result from disparate structural positions women and men occupy in work and society whereas others attribute the differences to deep rooted interpersonal orientations this study examines whether the performance differences can be explained by variations in initial resources and founding strategy we test whether women have fewer start up resources and if they do whether they can compensate for these deficiencies through their founding strategy recent work in social psychology argues that strategic choice is shaped by experiences to which individuals have been subjected and that women and men have fundamentally different socialization experiences we test the assumption that if the strategy that women owners adopt exploits the unique capabilities they derive from their socialization they can improve the performance of their firms and ward off discontinuance we examine the discontinuance pattern of 203 new firms in the retail industry this industry was selected because women entrepreneurs often choose to operate in this industry giving us a basis for comparing women owned and men owned firms we classify the firms into six strategy archetypes the arche types range from a broad focus where founders emphasize multiple strategic foci simultaneously to narrowly targeted differentiation strategies we assume that the experiential base of women entrepreneurs limits their successfully executing pricing strategies we hypothesize that women led firms decrease the odds of discontinuing by adopting one of two strategy types 1 narrow differentiation strategies that seek to satisfy a narrow segment of the market and that do not rely on pricing or 2 broad generalists strategies that emphasize service and quality but not pricing and take advantage of women s capability for handling multiple stakeholders simultaneously the results offer support for using an integrative model to explain the performance of women owned firms women owned firms have higher odds of discontinuing than men owned firms and women appear to have fewer resources to start their businesses women owners were less likely to have instrumental experience from working in the retail industry and start their businesses on a smaller scale then men but were no less likely then their male counterparts to have access to credit from formal financial institutions or to be disadvantaged by starting fewer other new businesses despite some apparent situational disadvantage resource deficiencies do not appear to affect the odds of women owned businesses discontinuing as much as they do men owned initiatives the findings indicate support for the supposition that women owners can use founding strategy to decrease the odds of discontinuing business a broad generalists strategy that represents a multi focused approach was found to benefit women owned businesses most overall the results suggest that men use prior business experience and human capital to affect the survival status of their businesses women appear to find strategic choice more beneficial future research is recommended to further elaborate the integrative model special attention should be given to developing alternatives to measures traditionally used in gender research many researchers charge that those typically used reflect male derived measures similarly greater attention should be given to understanding why the scale of women owned businesses at start up is substantially smaller than that of men since scale has been shown to be related to subsequent growth and survival

a study of the impact of owner s mode of entry on venture performance and management patterns abstract this study examines if firm performance and the associated patterns of management vary with the owner manager s mode of entry into the firm in owner started os buyout bo and family firms ff prior research suggests that these three types of firms differ on certain managerial characteristics but has not examined the role of the owner manager s mode of entry in determining firm performance on the one hand and its influence on the firm s management pattern on the other we collected data from 345 firms employing four to 99 employees operating in four northeastern states self reported return on assets roa annual sales business strengths competitive strategies and management practices were compared for os bo and ff firms performance was found to vary with owner s mode of entry the 227 os firms average roa was significantly higher than that of the 61 family firms and the 57 bo firms successful start up owners may have enjoyed greater profits because they assumed greater risk compared to those who opted to buy an existing venture or took over a family firm annual sales were highest for ffs second for os firms and the lowest for bos in terms of management patterns owner started firms rated themselves significantly higher on business strengths and tended to have higher self ratings for competitive strategies and operations strengths than did ffs or bos all of these differences were significant after controlling for the age and size differences among the firms indicating that mode of entry did directly impact performance as well as the management patterns examining the impact of mode of entry versus management patterns on venture performance we found that while the os mode of entry was associated with greater roa this was primarily due to the different management patterns adopted by the oss looking at annual sales the ff mode of entry was associated with higher sales and this was independent of the types of management patterns adopted by the firms a priori bos would appear to be in a better position to achieve superior performance but this was not so in this sample further analysis revealed different paths to profitability for the three entry modes for os firms high roa was associated with operating in the service and retail sectors developing a broad range of business strengths and offering competitively priced but higher quality customized products for oss roa was also enhanced by using informal and personalized management practices sales performance was greatest when oss employed trained staff for functions such as budgeting and sales for ffs roa was enhanced by broad ranging strengths but it was hurt by price and quality competitiveness mainly because on average their lower prices were not supported by a competitive cost of goods sales performance was greatest when ffs had owner managers with extensive industry experience were conservative in adding workers emphasized product customization relied on written reports but avoided long range operations planning management patterns of bos were not related to their roa but their annual sales were marginally higher when the acquiring owners had extensive industry background and employed a large workforce thus this study confirms our hypotheses that performance and management patterns vary across mode of entry as does the effectiveness of strategic management patterns further our findings concurred with previous studies which suggested that sales performance and profitability were likely to be influenced by different management actions this study demonstrates that owner s mode of entry is an important explanatory variable for variations in performance as well as management patterns venture ceos need to recognize that different management approaches may be needed for success depending upon whether they founded purchased or inherited their firms

economics of individualization in comparative effectiveness research and a basis for a patient centered health care the united states aspires to use information from comparative effectiveness research cer to reduce waste and contain costs without instituting a formal rationing mechanism or compromising patient or physician autonomy with regard to treatment choices with such ambitious goals traditional combinations of research designs and analytical methods used in cer may lead to disappointing results in this paper i study how alternate regimes of comparative effectiveness information help shape the marginal benefits demand curve in the population and how such perceived demand curves impact decision making at the individual patient level and welfare at the societal level i highlight the need to individualize comparative effectiveness research in order to generate the true normative demand curve for treatments i discuss methodological principles that guide research designs for such studies using an example of the comparative effect of substance abuse treatments on crime i use novel econometric methods to salvage individualized information from an existing dataset

a quantitative content analysis of the characteristics of rapid growth firms and their founders a group of firms that is attracting attention are rapid growth firms these firms are of particular interest because rapid growth is an indication of market acceptance and firm success by studying rapidgrowth firms researchers can help all firms better understand the attributes associated with firm growth despite these positive outcomes however rapid firm growth is difficult to achieve and maintain this study adds to the literature through a quantitative content analysis of the narrative descriptions of 50 rapid growth firms and a comparison group of 50 slow growth companies the purpose of the study was to draw from the narratives a list of empirically grounded growth related attributes that are associated with rapid growth firms the findings of the study resulted in the advancement of a conceptual model of the attributes of rapid growth firms in four areas founder characteristics firm attributes business practices and human resource management hrm practices

welfare implications of learning through solicitation versus diversification in health care using roy s model of sorting behavior i study welfare implications of learning about medical care quality through the current health care data production infrastructure that relies on solicitation of research subjects due to severe adverse selection issues i show that such learning could be biased and welfare decreasing direct diversification of treatment receipt may solve these issues but is infeasible unifying manski s work on diversified treatment choice under ambiguity and heckman s work on estimating heterogeneous treatment effects i propose a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity

he came he saw and he waited an empirical analysis of inertia in technology adoption the innovation adoption literature has focused primarily on a producer s decision of whether and how much to adopt an equally pertinent question is when to adopt because in the case of new techno

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

international versus domestic entrepreneurship new venture strategic behavior and industry structure abstract international entrepreneurship is defined in this study as the development of international new ventures or start ups that from their inception engage in international business thus viewing their operating domain as international from the initial stages of the firm s operation one hundred and eighty eight new venture firms in the computer and communications equipment manufacturing industries are classified according to the percentage of their sales in the international market ventures with no sales derived from international activities are considered domestic new ventures and ventures with sales from international activities comprising greater than 5 of total sales are considered international new ventures the strategy and industry structure profiles of international new ventures are significantly different from domestic new ventures the internationals pursue much broader market based strategies seeking a strategy of broad market coverage through developing and controlling numerous distribution channels serving numerous customers in diverse market segments and developing high market or product visibility the internationals also emphasize a more aggressive entry strategy building on outside financial and production resources to enter numerous geographical markets on a large scale securing patent technology is also an important component of their strategy this suggests that the internationals compete by entering the industry on a large scale seeking to penetrate multiple markets with the recognition that external resources are necessary to support such an entry whereas both the domestics and the internationals characterize domestic competition as being relatively intense the international new ventures compete in industries with higher levels of international competition it is not clear from this research whether the new venture selects an industry with a high degree of international competition and therefore responds with an international orientation or because the new venture has an international orientation it perceives or recognizes a higher degree of international competition another industry structure difference is the internationals perceived higher degree of restrictiveness due to government regulation it is unclear whether this restrictiveness motivates new ventures to seek less regulated international environments or if it indicates that when competing internationally the new venture is confronted with increased regulatory requirements domestic new ventures are distinguished by their emphasis on a production expansion strategy and customer specialization strategy the production specialization strategy consists of focusing on limited geographical markets maintaining excess capacity and pursuing forward integration the customer specialization strategy incorporates the production of a specialty product that is purchased infrequently thus for both of the domestic strategies a consistent closeness between the producer and consumer is implied this may be an important basis underlining the new venture s decision to compete in an exclusive domestic context this study offers initial support for the notion of international entrepreneurship by its findings that there are significant differences between new venture firms competing domestically and new ventures choosing to also enter international markets

new firm survival industry strategy and location abstract how important is the physical location of a new firm for its chances of survival location of a new firm whether in urban metro or rural vicinities can have important impacts on performance outcomes urban locations often contain a wealth of diverse resources but may also have a greater number of competitors rural locations may lack diversity but can enable the firm to exploit a niche with limited competition we suggest that a simple examination of new firm location will not adequately predict survival chances rather the impact on location of the new firm will be influenced by the industry in which the new firm operates and by the strategy the new firm pursues the industry of the new firm is examined by focusing on where the new firm is located in the value chain we predict that a new firm upstream in the industry value chain will have better chances of survival than new firms downstream in the industry value chain new firms with broadly focused strategies are hypothesized to have greater survival chances than new firms strategically positioned to exploit a narrow market focus and we predict that new firms in urban locations will have greater chances for survival than new firms in rural locations

technology based adolescent firm configurations abstract managers and stakeholders of entrepreneurial firms have an obvious vested interest in understanding those factors that contribute to the success or failure of such firms insight into strategic and contextual factors related to success for 162 adolescent 5 12 years old firms competing within a variety of rapidly changing technology based industries results from this study analyses focus on pinpointing patterns of strategy context and performance in the first stage of analysis six nonmutually exclusive dimensions of strategy were identified 1 technology product leader 2 product market breadth 3 marketing sales expertise 4 quality service 5 customer alliances and 6 specialization second cluster analysis was conducted to group the firms on their overall pattern of strategic emphasis six groups clusters were identified each group corresponded with one of the following four strategy quadrants 1 defenders k specialists 2 entrepreneurs r specialists 3 analyzers k generalists and 4 prospectors r generalists subsequent analysis of variance demonstrates significant differences across the six clusters on three contextual variables environmental instability stage of product development and firm age and on six outcomes rd direct sales and support these firms compete on their reputation in their targeted market segment their ability to find and sell to a narrow range of customers and customer service this strategy occurred in relatively stable and mature industries and resulted in high performance in operating efficiency market development financial stability and overall performance sales growth was average cluster 2 n 12 spin offs reliant on contracts with original employers these firms represent an outsourcing opportunity for larger companies not desiring to develop in house expertise in a product area they are the youngest and the smallest and have products in the earliest stage of development their environment is relatively stable given the dependence of their large customers for their product they are average performers except for having relatively high operating efficiency they trade high performance for the security of long term arrangements with major clients cluster 3 n 39 marketing and sales expertise targeted at narrow market these firms likely assemble and package others technological products or if they manufacture follow the technological developments of their competitors they create value through their marketing and sales expertise and effort and through customer service support they face average environmental instability and stage of product development this strategy however creates insufficient value added for the long term viability of the firms they have low performance on sales growth market development operating efficiency and financial stability and also have low expectations for their future prospects cluster 4 n 23 technology leaders with a high degree of specialization quality and service these firms differentiate their products based on technology leadership in a specialized product domain where high quality and service are emphasized they compete in relatively unstable environments attributable to rapid technological change and are in an early stage of product development they are relatively small consistent with their narrow product domain they have the highest performance on r d results sales growth and future prospects and are very high on overall performance cluster 5 n 24 lacking in a clear strategic profile these firms lack any clear pattern of strategic activity although faced with average environmental instability these firms compete in the most mature product areas therefore while other firms are becoming more entrenched in their competitive positions advantages these firms are floundering they are poor performers and lack long term viability they score low on sales growth market development r d results operating efficiency and overall performance cluster 6 n 46 broad and aggressive product market reach with relatively high quality and service these firms pursue a full line of products sold through a wide variety of methods this approach evolved in a highly unstable environment due to rapid change and growth yet has a large number of growth opportunities they are highly successful in market development sales growth and financial stability they are also highly optimistic about their future prospects this identification of firm configurations can help managers and stakeholders recognize the relationships among strategy context and performance for young technological firms this should lead to more effective managerial decisions on strategic and contextual issues leading to better performance

relatedness and corporate venturing does it really matter abstract although many studies have focused on the issue of relatedness in corporate venturing it is still unclear whether high or low levels of relatedness between a new venture and the parent firm leads to success as measured by venture performance in this study we raise the question of whether or not relatedness plays a determinant role in affecting success at the venture level the study analyzes data on 88 new industrial product corporate ventures from str4 the corporate start up database of the pims project based on a review of the strategic management and corporate entrepreneurship literature this study generates five hypotheses concerning the relationships among relatedness the intangible assets of the parent firm the entry strategy of the new venture and the venture s market share two rival hypotheses on the general impact of relatedness on venture performance are generated theoretical and empirical evidence suggest that highly related ventures benefit from existing resources exploiting corporate know how and sharing experience effects this leads to the first hypothesis which states that high related ventures achieve higher market shares relative to low related ventures on the other hand the disadvantages generally associated with high levels of relatedness such as higher coordination costs political problems associated with resource sharing appear to negatively affect the profitability e g r01 or the direct costs of the venture leading to the rival hypothesis results indicate that there are no significant differences in the market shares achieved by high medium and low related ventures and that therefore relatedness does not affect venture performance the third hypothesis predicts that given the parent firm has developed high levels of intangible assets high related ventures achieve higher market shares than low related ventures prior research has shown that intangible assets have a positive effect on venture performance high related ventures make possible higher levels of exploitation of the intangible assets held by the parent firm than low related ventures other things being equal if well managed these assets can neutralize the negative effects of high relatedness thus a positive interaction between relatedness and intangible assets should take place results support the hypothesis and show that the highest market shares are achieved by those ventures with high levels of relatedness and high levels of intangible assets two rival hypotheses concerning relatedness and its effects on the aggressiveness of entry strategy of the venture as measured by relative price relative promotional effort and relative product quality are generated the first hypothesis states that the more related the venture the more aggressive the entry strategy high relatedness implies high levels of resource sharing that should decrease the incremental costs needed to launch the venture thus high related ventures have greater amounts of resources to be used for aggressive entry strategies than low related ventures the rival hypothesis states that the less related the venture the more aggressive the entry strategy there is empirical evidence that increased resource sharing is associated with increased direct costs thus as compared with low related ventures high related ventures might be handicapped in pursuing aggressive entry strategies results indicate that there is no significant relationship between relatedness and the aggressiveness of the entry strategy overall this study suggests that the decision concerning the degree of relatedness does not explain by itself venture performance nor does it explain the entry strategy chosen at the venture level only when combined with the intangible assets held by the firm at the corporate level does relatedness appear to determine venture success implications for practioners are top management cannot decide a priori whether or not a new corporate venture should be highly related to the parent firm high image firms should only venture in highly related businesses building image at the corporate level pays if various high related ventures are present suggestions for further research are also offered

estimating the performance effects of business groups in emerging markets business groups confederations of legally independent firms are ubiquitous in emerging economies yet very little is known about their effects on the performance of affiliated firms we conceive of business groups as responses to market failures and high transaction costs in doing so we develop hypotheses about the effects of group affiliation on firm profitability affiliation could either boost or depress firm profitability and members of a group are likely to earn rates of return similar to other members of the same group using a unique data set compiled largely from local sources we test for these effects in 14 emerging markets argentina brazil chile india indonesia israel mexico peru the philippines south africa south korea taiwan thailand and turkey we find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine group affiliation appears to have as profound an effect on profitability as does industry membership yet strategy scholars have a much clearer grasp of industries than of groups moreover membership in a group raises the profitability of the average group member in several of the markets we examine this runs contrary to the wisdom conventional in advanced economies that unrelated diversification depresses profitability overall our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts conclusions drawn in one context may well not apply to another copyright 2001 john wiley sons ltd

a taxonomy of new business ventures abstract in this study we develop and validate an empirically grounded taxonomy of new business ventures nbvs using qualitative and quantitative data generated from interviews of and questionnaire responses from 106 entrepreneurs the taxonomy describes eight different types gestalts of nbvs these eight types are profiled across four dimensions individual what kinds of background characteristics abilities skills and motivations do these entrepreneurs have organizational what kinds of competitive strategies and organization structures are used by nbvs environmental what kinds of competitive environments are nbvs created in process what kinds of activities are pursued and how much effort is devoted to the activities that entrepreneurs undertake to create their nbvs an nbv gestalt is an ideal type generated through cluster analysis it is a composite summary of the case descriptions of the nbvs that fell into each particular cluster although each nbv gestalt is a complex combination of many different characteristics a simplistic description of each nbv gestalt is outlined to provide an overall view of the taxonomy type 1 escaping to something new individuals who start these firms seek to escape from their previous jobs jobs that from their perspective offer few rewards in terms of salary challenging work and promotion opportunities the new venture is in a different industry and is a different type of work than the entrepreneur s previous job this firm enters an established highly competitive market and offers goods services similar to its competitors type 2 putting the deal together the concern of the entrepreneurs in this group is to assemble the different aspects of the business suppliers wholesale and retail channels customers into a deal in which each participant in the deal can be assured of winning contacts are a crucial factor type 3 roll over skills contacts before the start up the entrepreneur worked in a position using technical skills and expertise similar to those required in the new venture he or she spends little time selling marketing or advertising because customer contacts from a previous position are used this firm provides goods or services that are based on the owner s professional expertise and are usually generic services e g auditing advertising the firm competes by offering better service than competitors type 4 purchasing a firm since this is a purchase a great deal of time is spent acquiring capital for the acquisition the venture is viewed as a turn around situation from the previous owners upon acquisition a great amount of time is spent evaluating the firm s products and services the firm competes by adapting to the changing needs of customers type 5 leveraging expertise this entrepreneur is among the best in his or her technical field the firm starts with the help of partners the firm enters an established market and competes through flexibility in adapting to customer needs since the entrepreneur is keenly aware of changes in the environment a great deal of time is devoted to sales the environment is characterized by high technical change and complexity type 6 aggressive service the firm is a very aggressive service oriented firm usually a consulting firm in a very specialized area the environment requires that the entrepreneur have profes sional or technical expertise of some kind knowing the right people in this industry is very important for making sales or for gaining access to those who influence which firms have the opportunity to make sales type 7 pursuing the unique idea the firm is created because of a new idea for a product or service that is not being offered the products or services are not technically sophisticated or difficult to manufacture since this is the first firm in the marketplace to offer such products services there is some uncertainty as to whether customers can be found type 8 methodical organizing the methodical aspect of the start up is reflected in the entrepreneur s use of planning both in acquiring the skill venture the firm s products or services are similar to those of other firms but the firm has some new twist either a slightly different way to manufacture the product or provide the service or by selling to a slightly different customer the nbv taxonomy outlines a situation based framework that may be useful for helping potential entrepreneurs match their skills abilities and interests to possible new venture types

technology strategy and new venture performance a study of corporate sponsored and independent biotechnology ventures abstract new ventures companies eight years or younger play a major role in the development of an emerging high technology industry corporate sponsored new ventures those supported by an established corporation and independent ventures those founded by independent entrepreneurs frequently battle for industry leadership and financial success whereas both venture types use technology to achieve financial and market success little is known about the differences in their technology strategies technology strategy is the plan that guides a new venture s decisions on the development and use of technological capabilities this strategy covers six major areas the first is selecting the pioneering posture where a venture decides whether or not be among the industry s first companies to introduce new products technologies to the market the second is determining the number of products to be introduced to the market the third is choosing the extent of a venture s use of internal and external r d sources internal sources usually refer to in house r d activities external sources may include purchasing or licensing of technology from other companies or joining strategic alliances to acquire that technology the fourth is deciding the level of r d spending the fifth is selecting the combination portfolio of applied and basic research projects whereas basic r d advances science applied r d leads to new products and technologies the sixth and final dimension is the venture s use of patenting to protect any competitive advantages it might gain from its r d activities this article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures the biotechnology industry was chosen to test the study s hypotheses using 112 ventures seven of the study s hypotheses focused on the potential variations in technology strategy between corporate and independent ventures independent ventures ivs were expected to surpass corporate ventures cvs in pioneering new products technologies using internal r d and emphasizing applied r d cvs were expected to surpass ivs in introducing new products using external r d sources spending on r d and patenting the study s remaining three hypotheses covered possible variations in new venture performance nvp and their sources the results showed that ivs focused more on pioneering pursued a more applied r d portfolio and emphasized internal r d more than cvs cvs utilized external technology sources spent more heavily on r d stressed basic r d and used patenting more intensively than ivs these results were consistent with the hypotheses however contrary to expectations there were no significant differences between cvs and ivs in the frequency of new product introductions probably because most ventures were at the invention rather than the commercialization stage the results on the nvp of cvs and ivs were counter to expectations ivs outperformed cvs probably because of the high motivation of the iv owners who reaped the rewards of growth and profitability also whereas cvs may have greater access to the resources of their sponsors political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages the results also indicated that cvs and ivs appeared to gain competitive advantages from different technological choices pioneering a focus on applied r d and extensive use of the internal r d sources were also positively associated with the performance of ivs heavy r d spending the use of both internal and external r d sources frequent product introductions and patenting were positively associated with the performance of cvs finding that technology strategies significantly impacted nvp should encourage executives to consider pursuing a formal technology strategy likewise the finding that different dimensions of technology strategy influenced the performance of cvs and ivs in different ways has practical implications cv managers can learn from their higher performing iv rivals also because established companies frequently acquire ivs information about their technology strategies can be valuable in assimilating the acquired ventures overall the results show that technology strategy is an important factor in enhancing new venture performance

the importance of focus to market entrants abstract one of the most difficult questions facing entrepreneurs is how broadly to serve a heterogeneous market that is whether it is better to serve a narrow segment of the market hoping to flourish by gaining a relatively high and increasing market share within that segment or whether it is better to attempt to appeal to a broader cross section of the market thereby allowing the firm to succeed with a lower market share among the customers whom it is targeting a narrower focus permits more concentrated use of fixed resources facilitates the building of customer loyalty and lowers the threat of retaliation from generalist incumbents but requires a much higher market share within the firms target market to succeed porter 1980 has identified three generic strategies available to firms low cost differentiation and focus by focus he means that the firm should develop the ability to serve a particular target customer group very well often at the expense of other potential customer groups implicit in the firm s choice to adopt a focus strategy is that it must address the question of how broadly to focus in terms of any given product attribute given its resources and opportunities a fundamental element of the firm s choice of focus is that it is affected by and in turn affects that of its rivals that is focus is a strategic variable in the sense of the word strategic meant by game theorists each firm s optimal choice of action depends on the actions taken by other firms the literature on the optimal degree of focus for new ventures has reached very mixed conclusions the early authors looking at the question were fairly consistent in their recommendation that a highly focused or niche strategy was generally most appropriate later authors recommended that new ventures should enter markets aggressively facing larger incumbents head on the latest studies develop what we describe as a contingency approach arguing that the best approach depends on industry conditions we think that this literature is now at a point where we can advance our understanding by looking at specific industries in some detail as our understanding expands broader empirical work is becoming increasingly difficult because of the number of factors that must be built into any cross sectional model of new venture performance we hope then to develop an understanding of one industry that is generally similar in nature to many other industries from this understanding conclusions of interest to both researchers and practitioners can be drawn future studies of other industries with different fundamental structures will provide similar benefits more specifically this paper is an empirical inquiry into the microbrewery segment of the u s brewing industry designed to investigate the relative merits of specialist firms different degrees of focus the question addressed is whether focus affects specialist firms short run performance in an industry where there are entrenched generalists as well as many new entrpreneurial specialist entrants the analysis confirms several widely held beliefs of industry participants and observers that microbreweries are far more likely to attempt to serve too broad a market segment than to focus too narrowly that microbreweries are in direct competition with imports and that microbreweries benefit from having many microbrewery rivals within the same state furthermore there appear to be some small learning and or reputation effects in the operation of microbreweries as well as a minor novelty factor that benefits recently opened establishments we must note however that the majority of the variation in the performance of microbreweries stems from differences in the management organization or market of individual breweries not captured explicitly by other variables included in the study this finding perhaps should not be surprising given the huge variation in the backgrounds skills and outlooks of microbrewery owners during the segment s early days the lessons learned from this research are of obvious importance to entrepreneurs in many industries it is a very common situation for an entrepreneur to enter a stable industry in which established firms are already in place serving a broad cross section of the market our findings show that in such circumstances a narrowly focused approach to the market is best we can think of numerous examples of where entrepreneurs have either succeeded by focussing on a particular segment of the market or failed by not doing so in fact there are many cases in which firms have done first one and then the other for example and people express airlines at first flourished by focussing on the needs of budget conscious leisure travellers and then collapsed in part because it began to try to serve business travelers and others who are less price sensitive on certain routes one of the hallmarks of an entrepreneurial business is that it suffers severe resource constraints because the entrepreneur s choice of breadth of focus will have profound effects on the resource requirements of the business it is clear that the choice of which segment or segments of the market on which to focus is a fundamental decision made by all entrepreneurs this paper serves to illustrate the importance of this focus decision and to provide some guidance for entrepreneurs concerning the appropriate degree of focus to adopt in entering an established market

new venture strategy and profitability a venture capitalist s assessment abstract this study uses theoretically justified criteria from the industrial organization io strategy literature and applies it to a new domain namely venture capitalists decision making specifically the study investigates the types of information venture capitalists utilize when evaluating new ventures and how venture capitalists use this information to assess likely new venture profitability in the interest of advancing our understanding of the decision making policies of venture capitalists this study addresses many of the limitations of previous research a review of io research suggests important relationships between a number of strategy variables and new venture profitability some of the relationships proposed by io strategy research are contingent in nature the strategy variables and their relationships with profitability are investigated in the domain of venture capitalists decision making individual and aggregate decision making analyses identified those strategy variables criteria venture capitalists utilize in assessing likely new venture profitability namely timing key success factor stability lead time competitive rivalry educational capability industry related competence timing key success factor stability interaction timing lead time interaction and timing educational capability interaction on average the most important criterion for venture capitalists in their assessment of profitability is industry related competence the second tier of importance is competitive rivalry timing and educational capability the third tier of importance is lead time key success factor stability and timing lead time interaction other interactions are less important therefore while venture capitalists use contingent decision policies main effects dominate if venture capitalists use a reported 8 to 12 minutes on average to evaluate a business plan sandberg 1986 then this study s findings may help the inexperienced venture capitalist allocate time towards assessing those attributes of primary importance although more complex relationships exist between the attributes the inexperienced venture capitalist can take comfort from this study s findings that main effects dominant amongst senior venture capitalists senior venture capitalists may take less comfort from their importance placed on main effects in light of research from io which suggests the importance of contingent relationships the results may also have practical application towards training how should venture capital firms train their new employees should venture capital firms rely solely on experienced venture capitalists lecturing the inexperienced on the criteria they use in assessing a new venture proposal like most decision makers venture capitalists have limited insight into their assessments and venture capital firms need to be aware of the gap between espoused policies and policies in use the information being taught needs to be supplemented with venture capitalists decision making research that investigates decision policies in use such as this study venture capitalist training could also involve experiential learning in conjunction with cognitive feedback about the decision policies used to accelerate the learning process experiential learning using cognitive feedback maximizes industry related learning while minimizing the cost of inexperienced decisions for the entrepreneur seeking capital this increased understanding of venture capitalists decision making may help them better target their business plans and presentations at those criteria venture capitalists find most critical to the profitability of a new venture

corporate versus independent new ventures resource strategy and performance differences abstract this study examines differences between independent ventures ivs which are established by individual entrepreneurs and corporate ventures cvs which are controlled by larger companies it focuses on differences between these ventures related to the resources strategies and performance of firms in the computer and communications equipment manufacturing industries thus the findings increase the understanding of the different challenges faced by each venture type and provide insight into how each venture type should be managed the study finds that managers of cvs and ivs emphasized different resources and strategies specifically cvs emphasized the following resources internal capital sources proprietary knowledge and marketing expertise ivs emphasized external capital sources technical expertise and development of brand identification they also differed in their strategies ivs pursued greater strategic breadth more customer service and focused more on specialty products the findings that cvs had less strategic breadth was surprising in that cvs emphasized resources such as internal capital sources which could make pursuing broad strategies more feasible for cvs it is possible that some cvs do not pursue broad strategies because they may be infringing upon someone else s turf within the corporation and thus may be discouraged in spite of finding significant strategy and resource differences the study found that ivs and cvs did not differ in performance and that resources were not directly related to performance based on the concept of equifinality it follows that both venture types can be equally successful even if they follow different roads to success success may be less a function of the different resources ivs and cvs have and more a function of what strategies the firms choose based upon their resources strategy variables did relate to performance a low cost strategy lowered performance regardless of venture type and the influence of an aggressive strategy i e wide strategic breadth on performance depended upon venture origin managers pursuing a low cost strategy may have had lower performance if they became penny wise and pound foolish missing opportunities in their efforts to lower costs this suggests that regardless of venture type managers of new ventures in these industries and perhaps in other volatile industries may need to be opportunistic this study indicates that pursuing broad strategies increased the performance of ivs and decreased the performance of cvs this finding was surprising in that cvs had greater resources which one might think would lead to successful implementation of aggressive strategies in securing enough resources to pursue aggressive strategies from their parents cvs may lose the freedom of action they need to cope with the dynamism of high technology industries this suggests that managers of cvs within the computer and communications equipment manufacturing industries should either not pursue broad strategies or if pursuing broad strategy they should maintain their flexibility in contrast ivs that pursued broad strategies achieved higher performance indicating that perhaps ivs unencumbered by the bureaucracy that characterizes cvs may be able to pursue aggressive strategies while simultaneously maintaining flexibility thus this study offers iv and cv managers several valuable insights first it argues that managers of each type of venture may need to pursue different strategies to increase venture performance and make optimal use of their unique resources furthermore it suggests that cv managers encounter difficulties in applying resources to strategies and not in accessing resources whereas political obstacles may occur cv managers may primarily encounter these difficulties when trying to implement strategies rather than when accumulating resources from the parent suggesting a pitfall that managers of cvs and their parents need to avoid although this study has indicated that both venture types can be equally successful it suggests that they may face different obstacles and follow different roads to success

determinants of the adoption of information technology a case study of electrical and electronic goods manufacturing firms in india abstract this study measures the intensity of adoption of information technology it and identifies its determinants in this paper it is argued that the degree of it adoption will be determined by the variables such as entrepreneurship skill intensity government policy openness of economy competitive environment and other firm specific factors the results of ordered probit model suggest that the qualification and information base of entrepreneurs and their attitude towards innovative activities and market share are significant determinants of the degree of it adoption the results also indicate that size of operations and skill intensity of the firms influenced the extent of it use

does the new economy measure up to the great inventions of the past abstract during the four years 1995 99 u s productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age of 1913 72 accordingly many observers have declared the new economy to be an industrial revolution even more important than the second industrial revolution of 1860 1900 which made the golden age of productivity growth possible this paper dissects the recent productivity revival subtracts out a cyclical component and concludes that there is no revival of the productivity growth trend in the 88 percent of the private economy lying outside of the durables manufacturing sector the paper explains this surprising finding by pointing to limitations in computers and the internet in comparison with the great inventions of the past

strategies of high performing new and small firms a reexamination of the niche concept abstract entrepreneurs seeking to position new or small firms in industries populated by well established competitors are frequently advised to seek the protection of a market niche there shielded by market characteristics which render the niche uninteresting to larger rivals small firms are urged to compete at the fringe of the market this article challenges this conventional wisdom citing industry and firm characteristics which under certain conditions create opportunities for successful direct competition by some small or new firms against much larger and established competitors however the authors caution that the conditions which created the opportunity may erode in time rendering the successful challenger vulnerable either to retaliation by the larger firm or challenge from subsequent entrants examples of successful direct confrontation by relatively small competitors are drawn from mature low tech industries a rapidly growing high tech industry and the service sector

the order and size of entry into international markets abstract when entering markets managers must decide when to enter as well as how many resources to commit to the entry the study finds that larger initial resource commitments do not result in higher market share and market survival in international markets instead to improve performance in international markets managers should strive to be first entrants further first entrants typically commit fewer resources suggesting that this strategy can be pursued by firms with limited resources

crossbred cow adoption and its correlates countable adoption specification search in sri lanka s small holder dairy sector considerable specification choice confronts countable adoption investigations and there is need to measure formally the evidence in favor of competing formulations this article presents alternative countable adoption specifications hitherto neglected in the agricultural economics literature and assesses formally their usefulness to practitioners reference to the left side of de finetti s 1937 famous representation theorem motivates bayesian unification of agricultural adoption studies and facilitates comparisons with conventional binary choice specifications such comparisons have not previously been considered the various formulations and the specific techniques are highlighted in an application to crossbred cow adoption in sri lanka s small holder dairy sector

initial human and financial capital as predictors of new venture performance abstract this research seeks to predict the performance of new ventures based on factors that can be observed at the time of start up indicators of initial human and financial capital are considered to determine how they bear upon the probability of three possible performance outcomes 1 failure 2 marginal survival or 3 high growth four categories of initial human and financial capital are examined general human capital represented here by the entrepreneur s education gender and race may reflect the extent to which the entrepreneur has had the opportunity to develop relevant skills and contacts management know how embodied in the entrepreneur or available through advisors or partners reflects management specific skills and knowledge without regard to the kind of business industry specific know how reflects specific experience in similar businesses financial capital is one of the most visible resources it can create a buffer against random shocks and allow the pursuit of more capital intensive strategies which are better protected from imitation the study utilizes a longitudinal study of 1053 new ventures representative of all industry sectors and geographical regions the research departs from most previous studies in considering different measures of performance marginal survival and growth and in considering explicitly whether the factors contributing to marginal survival differ from those contributing to high growth it was found that measures of general human capital influenced both survival and growth except for gender with women owned ventures being less likely to grow but just as likely to survive management know how variables had more limited impact having parents who had owned a business contributed to marginal survival but not to growth number of partners contributed to growth but not to survival management level prior employment in non profit organizations or not having been in the labor force and the use of professional advisors did not have significant effects industry specific know how contributed to both survival and growth amount of initial financial capital also contributed to both the usefulness of the model is enhanced by the fact that the resource variables considered are relatively easy to assess and all can be considered at the time of start up although some of the human capital variables cannot easily be changed the benefits or risks associated with each can be assessed in some cases potential problems can be identified so that plans can be modified to improve prospects overall it appears that using a model based upon the initial human and financial capital of the venture it is possible to predict the performance of new ventures with some degree of confidence

health insurance the tradeoff between risk pooling and moral hazard choosing optimal health insurance coverage involves a trade off between the gain from risk reduction and the deadweight loss from moral hazard this paper examines this trade off empirically by estimating both the demand for health insurance and the demand for health services it relies on data from a randomized controlled trial of cost sharing s effects on the use of health services and on the health status for a general non elderly population

aggressiveness of response to new business opportunities following deregulation an empirical study of established financial firms abstract certain researchers have argued that industry structure constrains a firm s ability to respond to new business opportunities an important research question is to determine the relationship between organizational structure and strategy and a firm s response to new business opportunities this article measures how established financial firms respond to new business opportunities following deregulation and then compares these activities to accepted well known strategy typologies and structural arrangements using secondary data the new business venturing activities of the entire population of texas savings and loans n 270 was determined following an industry deregulation forty four of these savings and loans s ls then were identified as having a high level of venturing activity whereas 71 s ls were characterized by a low level of venturing activity a questionnaire describing specific well known strategies and structural arrangements was mailed to the top managers of these 115 s ls telephone interviews were obtained from 99 of the 115 s ls receiving questionnaires chief executive officers and executive vice presidents from 37 high level venturing activity s ls and 62 low level venturing activity s ls responded twenty eight of the 37 high level venturing activity s ls reported the use of a prospector type strategy whereas 52 of the 62 low level venturing activity s ls reported having a defender strategy this final sample of 80 s ls 28 52 was used in all subsequent data analyses total assets of the s ls sampled ranged from 10 2 million to 4 1 billion dollars a covariance

the internationalization of new and small firms a resource based view abstract this paper seeks to enhance understanding of the internationalization of small and medium sized enterprises smes the study focuses upon the following issues can the characteristics of principal founders businesses and the external environment at one point in time be used to explain at a later date whether a firm is still an exporter or a nonexporter whether exporting firms are larger in size than nonexporting firms whether exporting firms report superior performance than nonexporting firms and whether exporting firms are more likely to survive than nonexporting firms to address these questions this study draws upon a sample of 621 manufacturing construction and services businesses located in twelve contrasting environments in great britain surveyed first in 1990 91 and then re interviewed in 1997 a resource based view is reviewed to identify the range of factors encouraging some owner managed smes to enter export markets four categories of human and financial capital are examined general human capital resources the principal founder s management know how the principal founder s specific industry know how and a principal founder s ability to obtain financial resources that can act as a buffer against random shocks variables relating to resource availability in the external environment were also collected and considered control variables previous studies have highlighted substantial industry differences in the propensity for businesses to enter export markets as well as to survive the principal industrial activity of each business in 1990 91 was therefore considered a control variable variables collected during the 1990 91 survey were selected to explain variations in the propensity to export reported by surviving independent firms in 1997 after elimination of missing values the working sample was reduced to 116 independent firms for this study 86 nonexporters and 30 exporters in 1997 in addition the 21 variables were selected to explain variations in business size in 1997 profit performance relative to competitors reported in 1997 changes in employment over the 1990 91 to 1997 period and business survival over the 1990 91 to 1997 period 213 survivors and 395 nonsurvivors multivariate statistical analysis confirmed that previous experience of selling goods or services abroad is a key influence encouraging firms to export businesses with older principal founders with more resources denser information and contact networks and considerable management know how are significantly more likely to be exporters further businesses with principal founders that had considerable industry specific knowledge are markedly more likely to be exporters businesses principally engaged in the service sectors and those located in urban areas are significantly less likely to be exporters a key finding of this study is that the explanatory variables significantly associated with the propensity to export sales abroad are not the same as those significantly associated with selected size and performance measures the resource based explanatory variables selected fail to significantly detect employment growing firms over the 1990 91 to 1997 period they also fail to significantly distinguish surviving independent firms from nonsurviving firms results from this study will provide policy makers and practitioners with additional insights into the key resource based factors associated with the decision by new and small independent firms to export sales abroad practitioners and policy makers can focus upon the characteristics of principal founders businesses and the external environment to predict the subsequent propensity of an independent firm to be an exporter policy makers and practitioners who want more new and small firms to export outside their local areas may prefer to target their resources and assistance to the relatively smaller proportion of firms that have the business and principal founder profiles that are significantly associated with a firm being an exporter

e business and manufacturing sector a study of small and medium sized enterprises in india it has been argued in the literature that the adoption of information and communication technologies icts allows a reduction in co ordination costs and leads to efficient electronic markets malone et al 1987 lee and clark 1997 several studies in pohjola 2001 have found significant returns on ict investments in developing as well as developed countries a partial survey of literature by bedi 1999 on role of icts in economic development suggests numerous benefits of its adoption these benefits range from employment to productivity gains consumer surplus and improvement in product quality etc in fact several nations started searching for alternatives to paper based methods of communication and storage of information in the last quarter of the twentieth century realizing the potential of icts in electronic business e business the united nations commission on international trade law uncitl adopted a model law in 1996 the un general assembly recommended to its members in january 1997 that they give due consideration to this model law when they enact their laws related to e business despite several advantages the growth of e business has been dismal particularly in developing countries the major impediments in the adoption of such technologies have been the validity and authenticity of information lack of proper cyber laws could also be held responsible for the slow changeover to e business

modeling new venture performance an analysis of new venture strategy industry structure and venture origin abstract this study examined the relative role of strategy industry structure and origin independent vs corporate or parental venture on the profitability and growth of 247 new ventures in two segments of the information processing industry computer related and communications related equipment manufacturing each of the 247 ventures was eight years old or less most previous research examining the role of these three factors in new venture performance has examined them singularly or in limited combinations with very few firms in their sample the theoretical agenda in this study was to advance this research stream by simultaneously examining origin strategy and industry structure as well as the interaction between strategy and industry structure using a large sample of new ventures the applications agenda in the study was to uncover patterns in the interactive role of strategy structure and origin that might provide meaningful insights to aid strategic decisions in new ventures from the theoretical perspective the study found that variability in new venture performance was better accounted for when all three factors were included in a statistical model overall these results suggested that new venture strategy and industry structure and their interaction are essential for understanding new venture performance while origin is secondary more important in explaining market share growth than higher profitability several study findings may be of interest to the practicing new venture strategist the study uncovered eight basic strategy patterns across the 247 firms a detailed description of these eight distinct patterns is provided in appendix a of this article overall performance results suggest that no one strategy is always the best new venture strategy but when we examined the fit of different strategies with different industry structures we were able to distinguish high from low performing new ventures dramatically in other words specific new venture strategies were very effective in some industry settings and ineffective in others for example new venture entrepreneurs were able to successfully enter and compete in high barrier industries by employing strategies emphasizing superior product quality and higher customer service alternatively when entry barriers were low strong marketing skills offered the best advantage the key to the success of these marketing oriented ventures was the establishment of a distribution system in which products were pulled through by their strong brand identification and name recognition these venture managers supported brand identification and name recognition with a high level of advertising and promotion experience and gave constant attention to adding new channels of distribution although earlier studies suggested that parented new ventures are more effective in achieving profitability origin was not a significant explainer of profitability for the new ventures in this study much has been written recently that argues for creating an entrepreneurial climate in a corporation many corporations have wholeheartedly embraced efforts to foster an independent spirit among parented ventures so much so that many corporations have attempted to replicate an independent climate in their corporate sponsored start ups rather than an origin difference between new ventures perhaps it is the difference in the climate or spirit of the venture or more specifically the manner in which the corporation manages the start up that accounts for profitability differences

corporate ventures into industrial markets dynamics of aggressive entry abstract this article reports a study of the effect of aggressive entry by firms venturing into new industrial markets there are three main sets of results first there is a significant correlation between the competitive attractiveness of the target industry and the initial share objective set by the corporation venturing into that industry second the downstream share objective set at the launch of the venture is significantly correlated with several key marketing strategy and investment strategy options made by the firm at the start of operations third if most of these key strategy decisions are made under the assumption that a high share position will rapidly be achieved their resulting performance in terms of both market share and roi is superior to firms which enter with less aggressive share aspirations these results are particularly appealing to the large established firm which has the resources and thus can both afford to absorb the cost of failure and afford to make significant front end investments in aggressive initial marketing expenses and investments in initial plant capacity for such firms a feasible strategy for a new venture into an industrial market could be to if possible but not essential seek industries markets to enter which are less likely to provoke rivalrous responses set aggressive market share targets invest aggressively in initial plant capacity develop aggressive sales force sales promotion advertising service quality and or pricing programs relative to competitors as appropriate to the particular industry being entered the reason we suggest that the programs be aggressive as appropriate is that different strategic options are likely to be more effective in one industry than another for instance aggressive advertising and sales promotions could be more effective for consumables while aggressive sales calling programs and superior service delivery could be the more effective route for capital goods businesses

filling the institutional void the social behavior and performance of family vs non family technology firms in emerging markets family businesses fbs are said to treat their employees with unusual consideration to form a cohesive internal community they are also claimed to develop deeper more extensive connections or relationships with outside stakeholders both behaviors may increase the viability of a business intended to support an owning family and its later generations such social linkages we believe may compensate for the lack of capital product and labor institutional infrastructures in dynamic emerging economies this survey study of a most challenging emerging market sector namely korean hightechnology businesses argues three major points 1 relationships of community and connection will be more common in fbs than in non fbs 2 these relationships will enhance performance in emerging market hightechnology sectors which because of their competitive complex and everchanging nature rely on significant expert knowledge and social capital within and outside the organizational community 3 the performance of fbs will benefit more from these community and connection relationships than the performance of non fbs because in these personally intimate settings employees and external partners will be especially likely to return the generosity of a visibly active owning family or to penalize its selfishness significant empirical support was found for most of these hypotheses

entrepreneurial ability venture investments and risk sharing a number of issues that relate to the desirability and implications of new venture financing are examined within a principal agent framework that captures the essence of the relationship between entrepreneurs and venture capitalists the model suggests 1 as long as the skill levels of entrepreneurs are common knowledge all will choose to involve venture capital investors since the risk sharing provided by outside participation dominates the agency relationship that is created 2 the less able entrepreneurs will choose to involve venture capitalists whereas the more profitable ventures will be developed without external participation because of the adverse selection problem associated with asymmetric information 3 if a costly signal is available that conveys the entrepreneur s ability some entrepreneurs will invest in such a signal and then sell to investors these entrepreneurs however need not be the more able ones the implications for new venture financing of these and other findings are discussed and illustrated by example

the evolution of new technology ventures over 20 years patterns of failure merger and survival abstract relatively few studies of entrepreneurs have examined the evolution of business ventures over a long period of time this paper summarizes the fate of 250 technology based companies founded in northern california during the 1960s the three outcomes studied are failure merger and continued operation in addition interviews with a dozen founders of firms that survived the entire 20 year period shed light on the founders own interpretations of why they succeeded by 1988 50 of the firms in the sample had failed 32 had merged or been acquired and 18 had survived as independent businesses there was a steady and occasionally sharp erosion in the number of survivors throughout the period a striking finding was that fully 78 of the surviving firms in 1988 still had one or more of the original founders in place among the factors predicting failure were product market problems such as product timing difficulties problems of product design or inappropriate distribution channels financial difficulties such as initial undercapitalization or problems with the venture capital relationship and managerial key employee problems such as imbalance in the management team or succumbing to the trappings of success the firms in the data base which were subsequently merged or acquired exhibited a number of macro and micro characteristics from a macro point of view the merger acquisition rates seem to have been lower than the national rate in the late 1960s higher in the later 1970s and similar in the 1980s from a micro point of view discernible patterns existed among acquired firms such as size and year since founding interviews with surviving founders suggested that relations between founders banking and credit problems attempted takeovers and international expansion were among the key crises that had to be overcome by the surviving firms of particular interest was the diversity of motives for founding the business reported by the survivors in addition to the desire to achieve wealth or to be independent we heard mentioned loyalty to a product or technology which would otherwise disappear and commitment to satisfying a customer group also noted were founders who indicated that their career as an entrepreneur came about primarily by accident five themes emerging from the interviews were characterized by the surviving founders as business lessons learned 1 know yourself 2 love your product 3 honor your customer 4 treat your people well and 5 keep your integrity the interviews in conjunction with the data on surviving firms are useful in expanding our understanding of the type of person that starts a business and why some start ups succeed over the long term particularly noteworthy is the number affirms who survived without ever growing larger theories of long term entrepreneurial success may need to take risk aversion into account

understanding the determinants of information technology adoption evidence from italian manufacturing firms our empirical study aims at identifying the determinants of information technology it adoption by small and medium sized italian manufacturing firms an ordered probit analysis is conducted on a sample of about 17 000 firms surveyed by the italian statistical institute using as a dependent variable an index of it adoption our results show that firm size geographical location functional composition of the workforce r d activity subcontracting exports and collaboration between firms are all highly significant determinants of it adoption such results are consistent with most of the predictions advanced in the few studies existing on this topic

using founder status age of firm and company growth rate as the basis for distinguishing entrepreneurs from managers of smaller businesses abstract this article examined the empirical implications of definitions that distinguish entrepreneurs from managers of smaller businesses based on their founder nonfounder status and their firms ages and growth rates the best distinctions were created using 1 founders 2 younger companies and 3 the combination of founders and younger companies growth indicators did not discriminate well the two founder based distinctions shared a profile of entrepreneurs as running smaller companies with higher return on assets roa than nonentrepreneurial managers having shorter tenure in their positions having previous work experience in the same industry and having higher risk taking propensity the distinction based on age of firm also showed strong ability to discriminate among respondents the field of entrepreneurship has few longer standing controversies than the one surrounding the question of what distinguishes entrepreneurs from nonentrepreneurial managers in trying to separate entrepreneurs from managers of smaller businesses in particular questions exist concerning the key defining differences definitions of entrepreneurship have utilized founder versus nonfounder status company age and company growth rates as distinguishing elements entrepreneurs have been defined by one or more of the following elements being a company founder running a young company and running or desiring to run a high growth company this article tests these elements to see if they provide a clearly differentiated profile of entrepreneurs it uses the founder nonfounder distinction for example to see if this distinction functions well in identifying a number of company financial and personal attributes that associate with founders rather than nonfounders the approach advocated here borrows from configurational theory as it has emerged in the fields of strategic management and organizational theory meyer tsui and hinings 1993 to look for a constellation of variables that group together in depicting entrepreneurs if founder status company age and growth rate are useful definitions of entrepreneurship they should point to a configuration of factors that together comprise a profile of an entrepreneur in predicting what configuration of factors will emerge this article adopts a strategic adaptation perspective low and macmillan 1988 to argue that differences between entrepreneurs and nonentrepreneurs spring from divergent thought processes and personal attributes of individuals who face the question of whether and how to enter business for themselves using the founder nonfounder distinction we view individuals who decide to start a new business rather than buy or manage an existing one as more likely to have previously founded a business have experience in the same industry be higher in risk taking show more type a behavior and be more growth oriented findings from a sample of ceos in the smaller business association of new england indicated that neither of the two tests based on high growth as a definition of entrepreneurial firms proved adept at creating a distinct entrepreneurial profile distinctions based on founder status younger firm status and founder of a younger firm status on the other hand proved effective in creating such profiles dimensions shared by the two founder based definitions of entrepreneurship included company attributes of smaller size and higher roa and ceo attributes of shorter tenure on the job previous experience in the same industry and higher risk taking propensity additional attributes showed in the younger company founder group including company attributes of lower liquidity and higher sales growth and personal attributes of having previously founded a business ranking roa as a high priority and external locus of control the distinction based on younger firm status performed well in discriminating among respondents in this study in addition to sharing several variables with the founder based distinctions it alone identified younger firms ceos as having lower education and type a tendencies and higher expectations of children succeeding them in the business as one implication of these findings knowledge of the profiles may help people who deal with these groups to have a better sense of how to interact with and respond to them the young company founder profile for example presents a picture of a relatively small company experiencing high rates of sales growth squeezing all it can from its assets in the face of high comparative liabilities because the company is young its founder has relatively short tenure but may well have had previous experience in the industry and have previously founded a company personally the founder is a risk taker who is external in locus of control and places high priority on roa if this configuration holds firm in future research those who deal frequently with entrepreneurs such as bankers venture capitalists consultants accountants and lawyers will be able to use a few identifying factors such as founder status and age of firm to draw reasonable inferences about a host of other characteristics of their clients the attempt to profile the entrepreneur in recent years thought to be futile may yet prove viable

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