The role of strategy, environment, resources, and strategic change in new venture performance
Abstract
This dissertation examines the strategies of start-up firms and factors bearing upon performance. It is the aim of this research to understand what factors facilitate or inhibit success, using multiple measures of performance. To this end, this study involves the application of strategic management and organization ecology concepts and theories to the field of entrepreneurship. For new ventures, the limited research to date, in Strategic Management, Organization Ecology, and Entrepreneurship, leaves unanswered the question as to what extent performance can be explained by strategy, resources, environment, and strategic change. The primary focus of the dissertation is strategy. The theoretical framework draws upon strategic management, organization ecology, and entrepreneurship. We operationalize strategy as the entrepreneurs sought for competitive advantage. Firms with similar strategies are grouped and these groups are used for further analysis. First, we investigate the effect of strategy, resources, and environment on measures of survival, growth and profitability. Then, we look at the stability of the firm's strategy over time and the effect that strategic change has on performance. The research design includes a large, longitudinal, diverse database of young firms that were followed for three years through use of a mailed questionnaire. The sample is drawn from 2994 members of the National Federation of Independent Businesses, who had reported that they had recently become business owners. The database is unique in that it tracks firms that are discontinued as well as those that survive. The questionnaire contains information on firm characteristics, the entrepreneur's assessment of the environment, the new venture's strategy as well as multiple measures of performance. Several multivariate analyses are used. Factor analysis is used to reduce the competitive advantage question to its underlying factors. Then based on factor scores, firms are placed into strategy groups using cluster analysis. Analysis of variance is used to determine whether performance differences exist between the strategy groups. Finally, regression analysis analyzes the effect of strategy, environment, resources, and strategic change on performance.
Degree
Ph.D.
Advisors
Cooper, Purdue University.
Subject Area
Management
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