Selected Dd For Critique

Dynamic capabilities and the Growth of Technology based New Ventures (2006) Florin Thomas Strehle Leiden University.

Contribution to Theory This dissertation contributes to theory in two different forms. First, I contribute to the concept of dynamic capabilities. Although accepted as important, the framework has been subject to various points of critique. Different scholars (e.g., Henderson and Cockburn 1994; Foss 1999; Williamson 1999; Priem and Butler 2001) argue that the framework is tautological, non-operational, theoretically vague, and lacks empirical grounding (Eisenhardt and Martin 2000; Barney 2001; Blum 2004). Although many scholars refer to the concept for empirical research, most of them use it rather to establish the context than to underpin the concept directly. However, some empirical work (e.g., Henderson and Cockburn 1994; Makadok 1999) constitutes very concrete tests of the framework (Barney 2001). In this dissertation, I operationalise the concept of dynamic capabilities to apply it to the growth processes of entrepreneurial firms. First, I identify the different capabilities that are required in a start-up company and thus address the criticism that the concept is non-operational. In addition, I contribute to the theory by describing the evolution of dynamic capabilities in entrepreneurial ventures. Finally, I enrich the strategic management framework by providing empirical grounding through the multi-method, multi-case field research described in the previous chapter. The second major contribution to theory focuses on the field of entrepreneurship research. By applying the concept of dynamic capabilities, I develop a framework that allows the tracking of the growth processes of technology-based new ventures over time. I identify differences in the growth processes of start-up companies and link these characteristics to performance. Contribution to Practice The practical contribution of this dissertation addresses entrepreneurs as well as investors, universities, incubators, venture coaches, and consultants. By identifying the different capabilities that are needed to grow a technology-based new venture, business founders realise which capabilities they have to develop to be successful as entrepreneurs. Management teams could either invest in learning to develop the required knowledge or hire additional managers to complete the team and thus close the skill gaps. In addition, training could be another means of skill development.

The contribution to entrepreneurial education at universities goes in the same direction. The curriculum and the teaching material could be adapted to the respective needs of business founders and management teams. The advantages of this study for investors, consultants, coaches, and incubators are similar. All these entities support entrepreneurs with their start-up companies and could benefit from this dissertation because they could

Summary: Theory What

Why

To operationalize the To address the issue concept of Dynamic that the concept is capabilities and apply non-operational it to the growth process of Entrepreneurial firms Describe the evolution of Dynamic capabilities in an Entrepreneurial Firm Provide an empirical basis for understanding Dynamic capabilities

How By identifying the different capabilities that are required in a start-up company

To understand the Multi-case field study process better in a Start-up Testing the theory

Multi-method , Multicase study

Practice What The different dynamic capabilities required to grow a technology based start-up

For whom Entreprene urs, Business Founders, Investors

How identifying the different capabilities that are needed to grow a technology-based new venture How type of Venture By acquiring new actions are Coaches, skills or closing needed to help Consultants the skill gaps

Why For business success

Performance

start-up to take advantage of Dynamic capabilities Entrepreneurshi Universities p Education

Dissemination of Increasing new knowledge up rate.

start-

Entrepreneurial strategy-making mode and performance: A study of the newspaper industry (2009) Aldo Van Weezal Jonkoping International Business school, 2007 Contributions to theory This study makes several contributions to the fields of strategic management, corporate entrepreneurship, and media management. First, the relationship between an entrepreneurial strategy-making mode and performance is still being explored to better understand how they relate to each other under different circumstances. This research will test the relationship in the context of a mature industry undergoing profound changes to its business model, as it is the case of the newspaper industry. The context considers environmental and organisational dimensions, which together will provide a richer understanding of the phenomenon. Second, the entrepreneurial strategy-making mode is understood in this study as a series of dimensions that guide decision-making at the strategic level of the firm. This study will rely on several measures of managers’ attitudes, some of them not tested yet according to the extant literature. This addition allows to better model a firm’s entrepreneurial behaviour. Third, the testing of the relationship between entrepreneurial strategy making and performance has been done mainly through contingency models, i.e. two-way interactions. Guth and Ginsberg (1990) suggest

that empirical research is needed on the combined effects of strategy, organisational structure, processes and core values/beliefs on corporate entrepreneurship. In the same vein, Short, Payne and Ketchen (2008) claim that configurational research still has much to contribute to entrepreneurship, and in particular the concepts of entrepreneurial orientation. This study will contribute to the stream of research that uses a configurational model by means of the analysis of three-way interactions. Dess, Lumpkin, and Covin (1997) and Wiklund and Shepherd (2005) are among them. While the former centres its analysis on the interplay among entrepreneurial strategy making, strategies and environment, the latter focuses on entrepreneurial orientation, access to capital and environmental dynamism in a sample of small businesses. Fourth, this study explores the dimensions of an entrepreneurial strategymaking mode and how they are shaped in the context of newspapers by analysing three case studies that deepen our understanding of the complexities of the interrelations among these dimensions, the changes in the structure of the organisation, the competitive environment, and the firm’s leaders. Fifth, the focus of this study is the entrepreneurial behaviour that enables strategic renewal. Although the literature recognises strategic renewal as an important form of corporate entrepreneurship (Covin and Miles, 1999; Kuratko and Audretsch, 2009), empirical studies examining their impact on performance are scarce. This piece of research helps reaching a better understanding of the phenomenon by drawing on quantitative and qualitative data. Finally, the literature on media management has barely developed an understanding of the nature of entrepreneurship in media companies. This study will help to bring the discussion forward, highlighting the importance of entrepreneurial behaviour on a changing media landscape. In particular, this study will deepen our understanding of the organisational changes taking place in newspapers and their impact on performance. Given these reasons, some aspects of the results of this study may also be relevant to other mature industries facing uncertain future because of technological and market changes which the industry’s traditional strategy modes cannot handle. Contributions to methodology The mixed method approach employed in this study is unusual in management research. While most published works adhere to either the quantitative or qualitative method, I combine both in a sequential design. Although this type of research method usually requires more resources to be completed – not only in financial terms but also in time – it offers the possibility to address the research questions from a different angle thus contributing to strength conclusions. The weaknesses of each method may to a certain extent be overcome by using two distinct methods in one research. Thus, once hypotheses have been tested in the quantitative part, the case studies may be particularly useful to create knowledge that is relevant for managers (Gibbert, Ruigrok and Wicki, 2008). Furthermore, case studies have

been advised for inquiring on corporate entrepreneurial activities in order to avoid researchers to make overly simplistic assumptions (Dess, Lumpkin and McGee, 1999). Contributions to practitioners Management research should also be of interest to practitioners. This study may help newspaper managers who want to understand how an entrepreneurial attitude in strategy-making is beneficial to them and under what circumstances. Traditionally, managers see entrepreneurship as a concept related to nascent ventures and selfemployment. However, corporate entrepreneurship is being developed to connect the ideas of entrepreneurship with the particularities of larger companies. On the one hand, this study will identify those characteristics of an entrepreneurial behaviour that better serve to improve the performance of established firms. On the other hand, the models that will be explored in this study –the configurational models- will shed light on the particularities of different contexts revealing the impact of environmental and structural variables on the relationship between strategy and performance. Because this study focuses on the newspaper industry, the structural variables are tailored to measure some of the main transformations that newspapers are suffering from nowadays. The results, thus, will be of interest to those who are responsible for change because these changes are often guided only by intuition and the experience of others. In particular, the qualitative analysis of three case studies will shed light on the practicalities of entrepreneurial behaviour in different contexts.

Theory What The

Why relationship To explore new

How By

testing

the

between an relationship in a new entrepreneurial context( the strategy-making newspaper industry) mode and performance

relationship in the context of a mature industry undergoing profound changes to its business model

The process entrepreneurial decision making.

of To identify measures Using measures of which has not been managers’ attitudes, explored in the some of them not literature tested yet according to the extant literature A new perspective to Extant research uses Using three additional strategy making mainly Contingency constructs using a three way approach ( Entrepreneurial configurational Orientation, access to model. capital and environmental dynamism) Methodology What

Why

How

Using multi-method Most research uses research only one methodmethodology either quantitative or Qualitative

First using quantatitive methods followed by qualitative case studies to understand the richness and uniqueness of the phenomenon

Practice What The importance of Entrepreneurial attitude in strategy making.

For whom Managers in the Newspaper Industry

How Why By informing To increase about the best performance practices, which are not based on intuition or experience.

Innovations in New Firms: Examining the role of knowledge and growth willingness Alexander Mckalvie Jonkoping International Business school , 2007 Intended contributions With the purpose of the research clarified, I now turn to the specific intended ontributions of my work. As for any academic research study, there should be a number of contributions made to the salient literature. In addition, for research within Business Administration, it is also important to have implications for practitioners; this provides some benefit to the managers who take their time to participate in the research, but also implies that there are lessons learned that can increase the performance of firms. Contribution to theory This dissertation contributes to the academic literature in two main ways. The first is that I investigate the role of knowledge-based capabilities, growth willingness and innovation in new firms. This is important for two reasons. To begin with, this area is generally understudied, despite the fact that the underlying issues are of prime interest to scholars from a variety of fields and to practitioners. Research has shown that innovation is a precondition for new firm growth (e.g. Brüderl & Preisendorfer, 2000). Yet there are only a few studies that examine these issues. Lynskey (2004) studied the characteristics of Japanese start-ups and their innovative activity. Heirman and Clarysse (2004) looked at intangible resources and innovation speed in new firms, while Deeds, DeCarolis and Coombs (1999) considered the geographic location and publishing records as links to innovation. Lee, Lee and Pennings (2001) remain the main study that I have found where the focus was on capabilities. However, they looked at new venture performance, not innovation. Therefore, we have limited knowledge of these issues in new firms. Trying to understand the internal factors and behaviours of new firms and their subsequent outcomes on innovation are important for comprehending new firms growth and performance. Studying new firms also provides the opportunity to test the boundary conditions of existing theory. As I noted earlier, the vast majority of studies looking at knowledge, capabilities and innovation have focused on large, established firms. These studies subsequently exclude many of most relevant characteristics of new firms. Of prime interest is the effect of growth willingness on capabilities and innovation. However, other internal

issues, such as age, size, ownership, and perceived external task environments (i.e. market and technological dynamism), also fluctuate greatly among new firms. Covin and Covin (1990) observe that, “the simple fact that researchers study new ventures implies that age effects can be significant” (p. 39). As a whole, taking into consideration the distinctive issues of new firms, which I do, allows for increased testing of the viability of our existing theories of entrepreneurial behaviour, especially in dynamic markets. The second contribution that I make is that I empirically unpack the appropriate concepts involved in the literature on knowledge-based capabilities and innovation. This contribution is based upon three foundational contributions. Firstly, I define and empirically measure knowledge acquisition, knowledge assimilation, knowledge transformation, and knowledge exploitation and their effects on innovation. Hereto few empirical studies capture these firm-level actions and their effect on innovation in a manner that allows for probability analysis. This study may therefore be seen as attempting to open the “black box” of capabilities and innovation with a large-scale quantitative study. This implies testing how well our existing theories work. Secondly, I examine the inter-relationships between knowledge-based capabilities. Instead of assuming that the knowledge capabilities merely have direct impacts on innovation, I try to embrace the fact that there may be a sequential ordering to this. Zahra and George’s (2002) conceptual article provides input into the notion that there is a process involved. I test this. Thirdly, I make a distinction between market and technological knowledge within this process. These are conceptually different. There has been a tendency to prioritise one of the approaches depending on the research traditions of researchers (e.g. Marketing researchers on market knowledge, technology management researchers on technological knowledge). By (consciously or unconsciously) looking at only one type of knowledge, the inherent differences between the two types are ignored. The few studies that do take both of these into empirical consideration are frequently qualitative in nature (e.g. Danneels, 2002) and therefore are devoid of statistical estimations. My contribution to the literature on knowledge-based capabilities and innovation is aided by my choice of studying new firms. A number of researchers have suggested studying capabilities in new ventures as they often provide the opportunity to gather information from someone with full knowledge of the firm, and it is therefore easier to assess relationships between variables within these firms (Sorensen & Stuart, 2000; Autio, Sapienza & Almeida, 2000). For instance, the inherent size and complexity of established firms is removed; new firms are much simpler to study, relatively speaking (Kazanjian & Rao, 1999). This should allow for a closer understanding and observation of the capabilities at work. Spender and Grant (1996) note that the “variables which are most theoretically interesting are those which are least identifiable and measurable” (p. 8) Studying new firms simplifies part of this difficulty. Furthermore, some researchers have argued that innovation in new firms should be studied as new firms are less hindered by such

restrictive issues as incumbent inertia, core rigidities, and competence-destroying innovation (e.g. Katila & Shane, 2005, Leonard-Barton, 1992). In sum, this study contributes both increased theoretical understanding of new firms but also a different lens through which to examine important but difficult to capture empirical issues. Contribution to practice There are naturally implications of this research to managers and other practitioners. The first and primary contribution is the value in clarifying the differential effects of the various knowledge-based capabilities on innovation. Of particular interest for managers is the effect of the different types of knowledge acquisition and transformation practices that take place within the firm. Often, managers are not familiar with the varying outcomes of certain firmlevel activities and benefits of diverse sources of knowledge. The findings that I present provide managers with help in deciding where and how they can invest their time and effort, assuming that they want to innovate. Ethiraj, Kale, Krishnan and Singh (2005) argue that all firms must invest in the increased usage of capabilities if the firm is going to survive. Thus knowing what types of capabilities facilitate innovation is worthwhile. It is important to bring these effects to light for firms whose intention is to innovate and grow. I also tailor these implications to managers of new firms. This is an important distinction as much normative advice is dedicated to managers of large, established firms. I have already argued that new and primarily small firms may not be subject to many of the same issues as their more established counterparts. This contribution may also be extended to venture capitalists, parent companies and others who would be interested in seeing new firms continue to flourish and be innovative. For owners, identifying factors that can lead to the increased capability of the firm to innovative may allow the firm to deliberately acquire or develop these capabilities. That is, the findings may help owners with a description of activities that the firm should engage in order to increase their internal capabilities and external output. For policy makers, the appropriate support mechanisms and opportunities can be put into place within society to help new firms refine the necessary capabilities. To note is that I am chiefly and foremost interested in the internal activities of the firm. Therefore, I do not necessarily intend or aspire to provide a contribution as to how specific policy makers can develop legislation or regulations for how society can increase the ability of firms to innovate.

RESOURCES, INDUSTRY MEMBERSHIP, AND FIRM PERFORMANCE: THE ROLE OF CAPABILITY

CONFIGURATIONS IN VALUE CREATION FOR IPO-STAGE NEW VENTURES Tim R Holcomb Mays School of Business Texas A & M University , United States

Abstract A widely held belief is that resource constraints and industry conditions can threaten the performance of entrepreneurial ventures. While previous research links resources to different performance outcomes, no research has explored the performance implications of resource use, especially for new ventures. Building from resource-based theory and contingency theory, we examine indirect (through capability formation/use) effects that occur within the ‘black box’ between resources and performance for a sample of entrepreneurial firms undertaking an IPO. Further, we extend theory in an entrepreneurial context to explain how underlying routines allow resources to be managed for greater value across different industries—conditions that make resources valuable in some contexts and not in others. Expected Contribution. 1. Why resources alone may not be valuable for performance. 2. How routines can be used to enhance the value of organizational resources .

Innovation in New Firms: Examining the role of knowledge and growth willingness By ALEXANDER McKELVIE Jonkoping International Business School, 2007

Executive Summary Innovation is an important means of competition and growth for new firms, especially in industries where customer demands and

technology are fast changing. Surprisingly, little is known about how new firms acquire and use knowledge in the pursuit of innovation. Previous research has prioritised large, established firms, and therefore overlooked many central issues for new firms, such as their willingness to grow. In addition, the methods employed in previous research (e.g. case studies or proxy measures for key concepts) do not truly capture the in-depth behaviours underlying how firms acquire, assimilate, transform, and exploit their knowledge. This dissertation attempts to fill these research gaps by examining the role of knowledge and growth willingness on innovation using a longitudinal study of over 300 new firms in the Swedish TIME sector (Telecom, IT, Media, and Entertainment). The results indicate that the innovation of new firms is largely explained by the firms’ knowledgebased capabilities and growth willingness. The detailed empirical findings also help to open up the “black box” relationships among different capabilities and types of knowledge (e.g. market and technological) in order to understand how these factors work together to increase innovation. Furthermore, the results show that growth willingness and the technological dynamism of the industry work as causal factors in the deployment of capabilities. This has implications as to intentionality in the development of capabilities and absorptive capacity in new firms. In sum, this dissertation provides novel insights into the value creation activities of new firms and to research concerning knowledge, capabilities, absorptive capacity and Entrepreneurship. Intended Contribution To fill a research gap in the area of the role of knowledge and knowledge acquisition on Growth of New Firms.