Article

Does Business Planning Facilitate the Development of New Ventures?

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Abstract

Many prior researchers have criticized business planning, arguing that it interferes with the efforts of firm founders to undertake more valuable actions to develop their fledgling enterprises. In this paper, we challenge this negative view of business planning, arguing that business planning is an important precursor to action in new ventures. By helping firm founders to make decisions, to balance resource supply and demand, and to turn abstract goals into concrete operational steps, business planning reduces the likelihood of venture disbanding and accelerates product development and venture organizing activity. Empirically, we examine 223 new ventures initiated in the first 9 months of 1998 by a random sample of Swedish firm founders and provide support for our hypotheses.

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... A planned approach to learning involves setting goals for the development of knowledge, and being systematic throughout the learning process, whereas an emergent approach to learning involves the unanticipated exploration of knowledge, and learning from challenges as they emerge (Megginson, 1996;Van Gelderen et al., 2005). Investigating the role of planned and emergent learning behaviors in opportunity development speed is important because it resonates with the broader discussion, in entrepreneurship research, about whether planning promotes new venture success (Brinckmann et al., 2010) and how (Delmar & Shane, 2003). ...
... Also, a quickly developed opportunity may contribute to the legitimization of a new venture, similar to the contribution of a business plan in this respect (Honig & Karlsson, 2004). Moreover, and relatedly, a fast opportunity development may facilitate the timely allocation and coordination of the resources necessary for building the new organization (Delmar & Shane, 2003). ...
... Hopp and Greene (2018) explain that those who follow a plan are able to synchronize it with other gestation activities in order to bring the venture idea toward viability. A planning behavior helps the venture opportunity move quickly because the plan operates as an orchestration device that allows the nascent entrepreneur to scrutinize the development of the emerging venture (Delmar & Shane, 2003). ...
Article
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Opportunities can be fleeting due to competitive factors or changes in markets and customer preferences; as such, speed matters. However, few studies have looked at the issue of how quickly entrepreneurial opportunities are developed, particularly with a focus on how the learning behaviors of entrepreneurs influence opportunity development speed during the entrepreneurial process. In this article, we investigate this important relationship. Specifically, we examine the role of entrepreneurs’ planned and emergent learning behaviors in opportunity development speed. Using a sample of new venture founders, and through the use of ordinary least squares regression and ordered logistic regression, our study suggests that planned learning is associated with faster opportunity development. This article contributes to entrepreneurship process research by highlighting speed in the opportunity development process and its interplay with entrepreneurs’ learning behaviors.
... Entrepreneurship ideas begin with inspiration, but intentions are what make such ideas manifest in the mind of the individual [19]. Therefore, individuals do not set up a company by reflex but do it intentionally, since it is a planned action from which we can distinguish a series of steps, events, or factors that lead to the creation of a company. ...
... This is the degree of difficulty the person perceives to carry out the action, taking into account their abilities [17]. When the individual perceives that he or she has the necessary skills to create his or her own company and considers the process viable, that is when he or she will be encouraged and begin to carry it out [19,30]. The self-efficacy of the individual fundamentally determines this dimension to develop entrepreneurial action [36]. ...
... Several authors confirmed that entrepreneurship education significantly impacts entrepreneurship [38,40,41]. On the one hand, entrepreneurship education improves entrepreneurial self-efficacy [42,43] through experiences of mastery, vicarious experience, verbal persuasion, and emotional activation, increasing students' perceptions of viability [19,43]. On the other hand, the skills and attitudes toward entrepreneurship perceived by the individual are reinforced through entrepreneurship education. ...
Article
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Entrepreneurial intention is one of the most representative indicators of entrepreneurship action. The Chinese community has an increasing presence in the community of Madrid both in the educational field and in the business field. This paper studies the relationship between different socioeconomic and cultural variables and the entrepreneurial intention of Chinese students studying at universities in the community of Madrid. As a methodology, an analysis based on the application of structural equation modeling (SEM) has been chosen, since it is an exploratory analysis where this type of data has not been previously identified. The results show that subjective norms, the perception of control, and the motives of entrepreneurship have a positive and significant relationship with entrepreneurial intention. In contrast, the attitude toward entrepreneurship, gender, previous work experiences, and the existence of entrepreneurial parents do not have a significant relationship with entrepreneurial intention.
... We draw on an information processing perspective to develop a model explaining how the two prevalent core strategic activities in the early venture phase, namely planning and experimentation (Burke, Fraser and Greene, 2010;Honig and Hopp, 2019), determine how much a venture can leverage its founding team's diverse knowledge to achieve growth. In the new venture context, 'planning' refers to the founders' efforts to gather and analyse information about a business opportunity, make financial forecasts and document both of these in a written plan (Delmar and Shane, 2003). 'Experimentation' in new ventures refers to the founders' deliberate tests of various business models and products/services with the aim of quickly learning about and adapting them based on market feedback (Ott, Eisenhardt and Bingham, 2017). ...
... Early planning in young ventures requires analysing market information; identifying strategies, tasks and risks; making projections; and formulating a business plan (Delmar and Shane, 2003). Being considered 'a key start up activity' (Brinckmann and Kim, 2015, p. 154), planning facilitates the definition of clear goals, strategies and structures that contribute to building a viable venture . ...
... Second, planning involves the definition of the venture's value proposition (Covin et al., 2018), which provides direction for the founding team's information processing when evaluating ideas. This clear value proposition will help them to prioritize their diverse ideas (Delmar and Shane, 2003) and mitigate the lack of common ground that can result from knowledge diversity (Bjornali, Knockaert and Erikson, 2016). Thus, planning can constitute a diverse team's heuristics and 'simple rules' that allow them to exploit growth opportunities (Eisenhardt, 2013, p. 812), because the team can process the diverse information available more effectively to select the most valuable ideas (Chwolka and Raith, 2012). ...
Article
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Drawing on an information processing perspective, we explore to what extent early venture activities allow founding teams to leverage their diverse knowledge to achieve venture growth. Using data from 103 young ventures, we find that early planning enables founding teams to better exploit the diverse knowledge resulting from their heterogeneity in educational background. However, venture growth is highest when diverse teams simultaneously plan and experiment in the early venture phase. This study challenges extant explanations of when early behaviours shape the efficient usage of existing venture resources. We discuss the contribution of these findings to the literature on founding teams, planning and experimentation, and team diversity.
... Thus, codified knowledge is more straightforward to transfer between individuals. Studies have investigated the effects of these different forms of knowledge on new firm performance through entrepreneurs' formal education (codified knowledge) and industry-specific, managerial, and prior entrepreneurial experience (tacit knowledge) (Burton et al., 2002;Delmar & Shane, 2003;Hellmann & Puri, 2002;Muñoz-Bullon et al., 2015;Shane, 2000;Singh & Crump, 2007). ...
... Also, a categorical variable labeling the principal economic activity of the nascent firm is included. This variable is labeled 0 for nascent firms in the business service market, =1 extractive sector, =2 transforming sectors, =3 consumer-oriented sectors, and =4 for other sectors/N.A. Finally, following Delmar & Shane (2003), an entrepreneur's growth preference is a dichotomous variable, accounting for entrepreneurs' overoptimistic inclinations, leading them to undervalue competition and overestimate growth aspirations. ...
... Another instrument that operates similarly in systematically assessing the new firm's characteristics is a business plan. These plans are positively associated with the persistence and success of creating a new company (Delmar & Shane, 2003;Liao & Gartner, 2006). It is also commonly requested by financial agents at the time of evaluating a project. ...
Article
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Previous studies in entrepreneurship research indicate that external funding is critical for entrepreneurial success and that spatial funding inequities between nascent rural and non-rural firms are ever-present. Moreover, women entrepreneurs, rural or otherwise, receive fewer external resources than their male counterparts. To our knowledge there has been no research leveraging the Panel Study of Entrepreneurial Dynamics (PSED), a representative dataset of American individuals trying to create new firms, to better understand differences between rural, non-rural and female-led firms in terms of their ability to stay engaged in the entrepreneurial process and to earn a profit. Using the resource-based theory of the firm, this research will begin to examine some of the critical factors driving rural firm success and rural female-led firm success. We utilize Cox and logistic regression models to analyze the time to quit, time to profit, and the likelihood of firm survival and profit generation for these firms. Results reveal that externally monitored funds are a significant variable for rural firm success in comparison to non-rural firms and appear to be especially important for women-led nascent firms early in the firm gestation process. Future research would benefit from further exploration of funding bias, entrepreneurial motivation and personal characteristics of rural, female-rural and their non-rural counterparts. This research adds to the literature on rural entrepreneurship by using the resource based theory of the firm in conjunction with the PSED database to study the nature of firm success and firm profit for rural and female led rural firms.
... Whereas research has mainly addressed market instability or unpredictability in an emerging market context (Hilmersson and Jansson, 2012), since 2020 it has been evident that measures to control the spread of Covid19 have generated significant unpredictability on a global scale. In contrast, stable markets are characterised by resistance to change and smooth movements without surprises; the future seems to be path-dependent and past experience can be used as a compass for future direction (Delmar and Shane, 2003). When predictability prevails, planning is a key activity and wellspecified goals and targets guide the firm's actions; this is in accordance with the cause-effect relationship (Dess and Beard, 1984). ...
... When markets are stable and the firm has information that is valid and relevant for the future, business predictability will be high and planning and action, as two distinct but strongly interrelated sequences, will be meaningful (Delmar and Shane, 2003). However, when markets are unstable it is difficult for firms to predict future activity and so, planning and action are only weakly linked (Ford et al., 2008) suggesting a need for flexibility (Alpkan et al., 2007). ...
... The opportunity value emerges when the firm acts upon an opportunity and a business relationship is established. While plans work relatively efficiently in well-known, stable and predictable markets (Delmar and Shane, 2003), the exploitation of opportunities in new foreign markets raises novel challenges that require rapid responses (Child and Hsieh, 2014) and flexibility (Tolstoy, 2012). Plans and possible scenarios need real-time adjustments to match the development of business networks as they cannot be governed by a single actor. ...
Article
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Market entry performance is critical during internationalisation; prevailing views suggest that firms need to carefully plan their entry before putting the plan into action. This article focuses on three attributes affecting the possibility and usefulness of making a pre-planned market entry: unpredictability, improvisation and business network commitment. We develop six hypotheses tested on a sample of 250 entries; our main finding is that improvisation plays a mediating role in relation to performance in unpredictable markets. The analysis reveals that the relationship between unpredictability and network commitment is not significant, while the effect of unpredictability on market entry performance is negative. These findings suggest implications for internationalisation and international entrepreneurship theory. For managers and entrepreneurs, we show that unpredictability weakens market entry performance, a negative effect that can be mitigated if the entrant firm improvises.
... Longitudinal studies suggest that business planning plays an important role in the gestation outcome (Liao & Gartner, 2007;Newbert & Tornikoski, 2012). Specifically, business planning facilitates goal attainment as it helps founders to undertake more valuable actions to develop their fledgling enterprises (Delmar & Shane, 2003). When it comes to start-up capital and funding, the percentage of ownership as well as external equity influence birth outcome (Hechavarria et al., 2012;Van Gelderen et al., 2005). ...
... Furthermore, networks and activities that connect the nascent entrepreneur with others appears to positively impact firm birth (Newbert & Tornikoski 2012;Newbert et al., 2013). However, the impact of specific activities is inconsistent (Chwolka & Raith, 2012;Delmar & Shane, 2003) and even though some level of activity is needed, no single gestation activity appears necessary to achieve firm birth (Arenius et al., 2017;Shim & Davidsson, 2018). ...
Article
Full-text available
This study explores the use of machine learning methods to forecast the likelihood of firm birth and firm abandonment during the first five years of a new business gestation. The predictability of traditional logistic regression is compared with several machine learning methods, including logistic regression, k-nearest neighbors, random forest, extreme gradient boosting, support vector machines, and artificial neural networks. While extreme gradient boosting shows the best overall model performance, neural networks provide good results by correctly classifying entrepreneurs who have not abandoned their business venture in the early stage of the gestation process. In addition, this study provides valuable insights in relation to the start-up activities leading to firm emergence. Entrepreneurs who perform a greater number of activities and who can orchestrate them at the right rate, concentration, and time are more likely to successfully launch a new business venture.
... Nascent entrepreneurs are individuals who are, alone or with others, undertaking efforts to try and start up their own business (Davidsson & Honig, 2003). Their early activities impact subsequent venture persistence and survival (Delmar & Shane, 2003;Liao & Gartner, 2006), first sales (Liao & Welsch, 2005), achieved sales level (Delmar & Shane, 2006), and profitability (Davidsson & Honig, 2003). In particular, both the opportunity exploration and exploitation activities of nascent entrepreneurs are crucial for their ventures' long-term survival and performance (Block & MacMillan, 1985;Choi et al., 2008). ...
... The activities through which new ventures are created have been referred to as "venture emergence" (Dimov, 2010), "firm gestation" (Davidsson & Honig, 2003), "organizational founding" (Ruef et al., 2003), and "new venture creation" activities (Choi et al., 2008;Davidsson, 2015;Samuelsson & Davidsson, 2009;Shane & Venkataraman, 2000). They play a central role in entrepreneurship research, as they are known to have a lasting effect on ventures' evolution and performance (Davidsson & Honig, 2003;Delmar & Shane, 2003, 2006Liao & Gartner, 2006). In line with Block and MacMillan (1985) and Choi et al. (2008), this study distinguishes between two broad categories of new venture creation activities, namely the exploration and the exploitation of entrepreneurial opportunities. ...
Article
Although nascent entrepreneurs’ opportunity exploration and exploitation activities are crucial for later venture evolution and performance, it is unclear why some nascent entrepreneurs engage more in these new venture creation activities than others. Building upon role identity theory, this study advances a nascent entrepreneur’s various role identity aspirations as drivers of these activities. In particular, we argue that inventor, founder, and developer role identity aspirations are linked differently to the range of opportunity exploration and exploitation activities nascent entrepreneurs undertake. We use a two‐stage Poisson model with sample selection correction on a random sample of 1582 inhabitants of Flanders, Belgium. The first stage estimates an individual’s probability to engage in nascent entrepreneurship. The second stage tests the relationships between an individual’s role identity aspirations and the range of exploration and exploitation activities undertaken, conditional on being a nascent entrepreneur, which holds for 162 individuals in our sample. We find that while some role identity aspirations are related to the range of opportunity exploration activities undertaken, others primarily affect the range of exploitation activities. Our findings have important implications for literature on new venture creation and entrepreneurial opportunities, for identity literature, and for nascent entrepreneurs wanting to start a venture.
... Longitudinal studies suggest that business planning plays an important role in the gestation outcome (Liao & Gartner, 2007;Newbert & Tornikoski, 2012). Specifically, business planning facilitates goal attainment as it helps founders to undertake more valuable actions to develop their fledgling enterprises (Delmar & Shane, 2003). When it comes to start-up capital and funding, the percentage of ownership as well as external equity influence birth outcome (Hechavarria et al., 2012;Van Gelderen et al., 2005). ...
... Furthermore, networks and activities that connect the nascent entrepreneur with others appears to positively impact firm birth (Newbert & Tornikoski 2012;Newbert et al., 2013). However, the impact of specific activities is inconsistent (Chwolka & Raith, 2012;Delmar & Shane, 2003) and even though some level of activity is needed, no single gestation activity appears necessary to achieve firm birth (Arenius et al., 2017;Shim & Davidsson, 2018). ...
Article
Full-text available
This study explores the use of machine learning methods to forecast the likelihood of firm birth and firm abandonment during the first five years of a new business gestation. The predictability of traditional logistic regression is compared with several machine learning methods, including k-nearest neighbors, random forest, extreme gradient boosting, support vector machines, and artificial neural networks. While extreme gradient boosting shows the best overall model performance, neural networks provide good results by correctly classifying entrepreneurs who have not abandoned their business venture in the early stage of the gestation process. In addition, this study provides valuable insights in relation to the start-up activities leading to firm emergence. Entrepreneurs who perform a greater number of activities and who can orchestrate them at the right rate, concentration, and time are more likely to successfully launch a new business venture.
... However, it is important to understand how financial management transactions happen in the small firms. The dynamics of financial management process and decision are influenced by a number of issues that are internal and external (Delmar and Shanes, 2003). A more appropriate view is that, all business decision impact on financial performance, therefore, every manager must be a money manager. ...
Article
Small and medium enterprises (SMEs) are a critical component to economical and National development of any given country. In this regards, agro-dealers are part of SMEs that are helping to grow and develop the agricultural sector in the country. Unfortunately, agro-dealers in Zambia are reported to be inconsistent in stocking of the products and taking long time to pay back the suppliers. This ultimately affects the suppliers and farmers in the agriculture industry. This study assessed how business management skills and financial performance of small and Medium enterprises (SMEs) impact on farmers and suppliers in Southern, Central and Lusaka Provinces of Zambia. Therefore, 120 SMEs agro dealers were randomly selected from the list of Government approved agro dealers in the chosen districts. 120 smallholder farmers were selected in the three provinces in the chosen districts and 13 large-scale suppliers were purposively selected. The study administered questionnaires to critical stakeholders. Primary data collection Was used in structured questionnaires that were administered to accountants and executive managers of the 120 SME firms in the 3 provinces Lusaka, southern and central. A mixed approach of qualitative and quantitative was used to bridge the gaps that exist between qualitative and quantitative data. Other questionnaires were administered to the farmers and also the suppliers of products to the SME agro-dealers. Semi structured interviews were done to 120 farmers. Secondary data was collected through review of literature on financial management, competencies, skills training and capacity, financial management systems and variables leading to firm’s profitability. To understand the extent and implications between the SME management skills, management systems and their performance, and failure to meet the expectations of farmers and suppliers, regression and correlation analysis together with descriptive statistics were used using SPSS. The study focused on: determining whether SME agro-dealers meet farmers and suppliers expectations, determining the business skills that SME agro dealers need to possess and the effects they have on meeting farmers and suppliers expectations, determining the business management systems and financial performance of SME agro-dealers impact on farmers and suppliers businesses. The results showed that SME agro dealers do not have necessary skill sets that are required to run the enterprises properly and profitably and hence fail to meet the famers’ and suppliers’ expectations. 81.7%% of the SME agro dealers indicated poor strategic planning and only 18.3% indicated had valid and robust strategic plans, ………budget analysis respectively. Regarding the SME agro dealers financial management systems affecting them not to meet the expectations of farmers and suppliers, the results showed that the SME agro dealers do not have necessary financial management systems in place. The results indicated 69.2% had poor financial management systems and 100% of the suppliers agreed that SME agro dealers had poor stock management systems that affected their business performance. International Journal for Research in Applied Science & Engineering Technology (IJRASET) ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538 Volume 10 Issue I Jan 2022- Available at www.ijraset.com ©IJRASET: All Rights are Reserved | SJ Impact Factor 7.538 | ISRA Journal Impact Factor 7.894 | 1848 This in turn affected the availability of products and services to farmers. This implied a negative relationship existed between the suppliers/farmers and the SME agro dealers in terms of the nature of their commercial relationships .The study concluded that the SME agro dealers do not meet the expectations of the farmers’ and the suppliers’. It was therefore recommended that firms should help build internal financial and business management systems to equip SMEs with technical knowledge and skills. SME agro-dealers require capacity building programs that should include mentorship programs that allow or gives chance to practice the skills. The problem of financial management can be resolved by introducing financial institutions that can quickly pay for all transactions instantly, and then it start waiting for the money, which will ensure consistent stocking of products by agro-dealers. E-payments innovations that secure the suppliers’ finances and makes available the SME agro dealers’ mark-ups are a secured system.
... There are many perspectives on the elaboration of plans in businesses, and not just family businesses. If we apply the definition formulated by Honig & Karlsson (2004), then a business plan is a written document that describes the current state and the presupposed future of an organization The formalisation of business plans is important according to, e.g., Delmar & Shane (2003). The opposite is stated by Honig & Karlsson (2004), who claim that plans tend to be of greater importance to large business entities. ...
Conference Paper
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Today, many of the oldest businesses in Europe and around the world are family-owned and their survival is the result of their ability to change over time. The key objective of a family business is to keep the firm in the family by passing it on to the next generation. The transfer of a business (the succession process) is considered an extremely difficult part of the business life cycle. A lack of planning can be one of the main reasons why business transfers fail, because it is only during the planning process that participants usually realise how complex the succession process actually is. We assume that the formulation of a strategic plan can play an important role in the transfer of a business. At the same time, however, its benefits are determined by whether the family accepts the plan, implements it, and involves the next generation. The objective of this paper is to analyse whether family businesses have strategic plans and which factors influence their formulation. The assumptions have been verified in a questionnaire survey among 212 family business owners in the Czech Republic. We used frequency analysis and a Chi-nses indicate that strategic planning is not typical for Czech family businesses. However, if we consider long-term planning as an intention to keep the business family-owned in future generations, then this can be confirmed in the data. The majority (84 %) of owners plan to hand the business over to the next generation. Planning in family businesses is correlated with a larger number of employees both the total number of company employees and a larger number of family employees. The previous experience of the founder or a family member also proved to be an important factor in the making of plans.
... Entrepreneurship research has contrasted causation with effectuation on various grounds (Dew et al. 2009a;Fisher 2012;Harms et al. 2021;Read and Sarasvathy 2005;Shirokova et al. 2020) ever since and a lively discussion has evolved on the value of planning (Delmar and Shane 2003;Shane and Delmar 2004)-particularly in new venture creation (Chwolka and Raith 2012;Gruber 2007). Nevertheless, a definite distinction between predictive and non-predictive, adaptive entrepreneurial action is somewhat artificial and, as such, both questionable and misleading. ...
Article
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VIEW-ONLY FULL-TEXT ACCESS AT https://rdcu.be/cFwSf. Entrepreneurship research has developed and upheld the distinction between two fundamental notions of how entrepreneurial action might proceed, one being the predictive approach (causation) and the other being non-predictive or adaptive (effectuation). However, while a definite distinction between prediction and adaption may be justifiable for analytical purposes, it is artificial and, as such, of limited practical value. Neither is the predictive approach non-adaptive and nor is the adaptive approach non-predictive. Entrepreneurship necessarily involves both prediction and adaption, which ought therefore not to be treated as mutually exclusive categories that might at best overlap or occur simultaneously in seperate processes. This paper seeks to pave the way to a judgment-based unified notion of predictive-adaptive entrepreneurial action arguing that both prediction and adaption inevitably co-occur.
... This is the ability to assemble and organize resources to exploit an entrepreneurial opportunity (Foss and Klein 2012) Planning This refers to the ability to plan and structure tasks (Matthews and Scott 1995;McGrath and MacMillan 2000;Delmar and Shane 2003) Teamwork This is the ability to achieve goals through collaboration, as well as to build effective relationships with others (West 2003) We included between three and seven questions (items) in the survey for each of the ten dimensions. All the scales used in the analysis had been validated in previous studies. ...
Article
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Entrepreneurship is considered a key driver for economic growth. Therefore, more and more studies are investigating the role and effectiveness of entrepreneurship education. In this context, the present study is aimed at investigating the effectiveness of entrepreneurship programs, with a learning-by-doing approach, on the entrepreneurial intention, entrepreneurial characteristics (entrepreneurial attitude, entrepreneurial self-efficacy, entrepreneurial mindset, core self-evaluation) and entrepreneurial skills (creativity, financial literacy, marshaling of resources, planning, teamwork). The study has analyzed a short intensive online entrepreneurship program, which adopts a learning-by-doing approach and targets students from different European technical universities, with different levels of education and different entrepreneurial backgrounds, giving them the opportunity to work on different types of projects. Pre- and post-course surveys were conducted in order to perform qualitative analyses on the effectiveness of the program. The results show that the entrepreneurial intention and perception of the entrepreneurial characteristics and skills of the students increased after participation in the program. In addition, our findings reveal that the program appears to be more effective for MSc students than for PhD ones and for students who had never attended any entrepreneurship program before, while there is no difference in the effectiveness of the program in terms of gender.
... In this approach, it can be said that formalization explains organizational processes and also acts as an integration tool (Song et al. 2011;Ketokivi and Castaner 2004;Frechet and Goy, 2017). It is worth mentioning that, in line with this argument, some researchers concluded that business plans increased both the efficiency and the possibility of survival of new ventures (Burk et al. 2010, Delmar andShane 2003). On the other hand, Song et al. (2011) emphasized in their work that the number of new product development projects decreased with the growth of strategic planning, pointing to a negative relationship between strategy formalization and innovation. ...
Article
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In the changing environment, innovation gives organizations a chance to survive and develop. Researchers indicate that successfully implemented innovations are a source of competitive advantage for an organization. In source literature we can find examples of various tools recommended by the authors that increase the probability of innovation success. As some researchers note, the role of these tools has been questioned, which is related to the impact of formalization on innovation. In recent years, researchers have focused their efforts on determining whether formalization improves or deteriorates innovation; however, when analyzing the literature, it can be noticed that the number of studies on innovation and its determinants is significant, while the number of publications on the impact of formalization on organizational innovation is low. In addition, it can be noted that so far, researchers have not come to a consensus regarding the impact of formalization on either organizational results or innovation; therefore, the assumption of the presented work is to fill this gap to some extent. The aim of this article is to present the preliminary results of a broader research project on the relationship between the formalization of operational management and the innovation of IT organizations in Lubuskie Voivodeship.
... They rely on financial forecasts, which are most of the time included and explained within a business plan. Business plans are, therefore, used to create, communicate and share knowledge with meaningful stakeholders such as investors, banks, public entities, potential partners and incubators or accelerators (Delmar and Shane, 2003;Hormozi et al., 2002). Thus, translating knowledge into the business plan to then transfer such concepts to external stakeholders can appear as a critical issue and strategic business process for startup companies (Aureli et al., 2019). ...
Article
Purpose: The paper aims at analysing the role of business plan development as a knowledge translation tool, especially for the creation of start-ups. In a complex knowledge ecosystem populated by multiple diverse and autonomous actors (like potential entrepreneurs, local companies, local public entities, and business consultants) bonded together by a joint search for valuable knowledge, business plan development can work as a powerful enabler for the translation of knowledge. Design/methodology/approach: The study employs a qualitative multi-case study approach by examining the results of a public program devoted to the creation of new entrepreneurial ventures. We analysed 418 complete business plans and followed up all the participants with an interview. 40 cases were investigated more in detail. Findings: Results show how business plan development can function as a bridge between academic, theoretical and general knowledge on start-up creation on the one hand, and practical contextualised activities of potential entrepreneurs on the other. Originality/Value: The paper contributes to knowledge management and knowledge translation literature by demonstrating the role of business plan development as an effective knowledge translation enabler. It also adds to the understanding of innovation management and entrepreneurial education by proving the relevance of the translation of knowledge for the creation of new business ventures. Practical implications: The process of knowledge translation is crucial to ensure that relevant knowledge coming from both the inside (the entrepreneur) and outside (the stakeholders) of the organization is effectively applied. To facilitate the translation process, key knowledge users should be supported in contextualising and making sense of the research knowledge. Initiatives carried out by local entities and other actors, gathering several stakeholders to develop business plans, can become valuable opportunities to facilitate the translation process for start-up development.
... In the context of new venture creation, effectuation theory differentiates two modes of entrepreneurial behaviors (Sarasvathy, 2001). Causation is the first mode of effectuation theory which emphasizes goal-orientation, rational analysis, and formal planning (Brinckmann et al., 2010;Frédéric Delmar & Shane, 2003). Meanwhile, the second mode, namely effectuation, is characterized by means-oriented collaboration in which entrepreneurial actions are more dependent upon entrepreneurs' identities, networks, and knowledge, than upon objectively given external economic and market conditions (Sarasvathy, 2001). ...
Article
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This study aimed to explore the challenges faced by young entrepreneurs, solutions as well as strategies taken in sustaining a business. A qualitative approach has been used in this study. The data was gathered from interviews with young entrepreneurs that operate in Johor, Pahang, and Selangor, Malaysia. The entrepreneurs’ selection is based on the age of the business owner between 18 to 40 years old with more than three years of business establishment. Data was collected using an in-depth face-to-face and online interview with the owner of the firms. The interviews were then recorded and transcribed. Findings show that managing employees is the biggest challenge faced by young entrepreneurs in sustaining business and to overcome this issue, they undergo training specifically on handling and managing workers. In conclusion, findings also show that young entrepreneurs engage with career development to manage workers efficiently. They also used a bootstrapping strategy to finance the business and focus on an online marketing strategy to reach current and potential customers. Additionally, they also practicing spiritual routines since the beginning of the business career. The implications of the findings provide information and guidance to stakeholders in formulating educational programs specifically for young entrepreneurs to sustain their business.
... Delmar and Shane (2004) found evidence that planning (i.e. business plans) is advantageous for the survivability of new ventures. Planning also has a positive effect on the decision-making speed (Pelz, 2019) by fostering managerial anticipation and reducing information asymmetries (Delmar and Shane, 2003;Brinckmann et al., 2010). Likewise, accounting in general positively influences decision-making in SMEs by providing an improved information base (Lavia L opez and Hiebl, 2015). ...
Article
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Purpose - Small- and medium-sized enterprises (SMEs) often lack adequate accounting systems and may even fail because of accounting inefficiencies. Indeed, accounting can mitigate the course of a crisis and support a troubled SME's turnaround. Its impact on reorganization success, however, has scarcely been researched so far. Therefore, this paper aims to examine the effects of several accounting parameters, namely, the quality of accounting systems, quality of early warning systems, formal planning, the standard of financial accounting and reorganization planning on the short-and long-term success of court-supervised reorganization. Design/methodology/approach - The impact of accounting on reorganization success is investigated in a sample of all SME bankruptcy cases with ten or more employees (n = 117) in Upper Austria in 2012 including data for short-term survival (in 2016) and long-term survival (in 2019). Findings - This study found evidence that the general quality of accounting systems, the quality of early warning systems and written reorganization plans positively influence the outcomes of the analyzed court-supervised reorganizations of SMEs. In particular, the existence of a reorganization plan significantly increases the short-and long-term reorganization success by ensuring the efficient and effective use of resources in the reorganization process. Practical implications - This study should increase the awareness of SMEs’ owner managers, consultants, creditors and legislators for the importance of accounting in the context of reorganization. The fact that the effect of accounting on reorganization success is less pronounced in the long-term view indicates the necessity of increasing the strategic focus in SMEs’ accounting instruments. Originality/value - This study provides new evidence on the impact of specific accounting parameters on the short- and long-term success of the court-supervised reorganization of SMEs. Furthermore, this study points out the high relevance of reorganization plans for SMEs.
... Burke et al., (2010) evidenced that firms with written business plans and which use external support grow faster than those without such plans. While Delmar and Shane (2003) established that business plans benefit firms by providing for improved management, enhanced by staff training and introduction of new routines, Becherer and Helms (2009) found a relationship between the use of a business plan and financial achievement. ...
Chapter
Writing of business plans ensures performance of a business and contributes to enabling countries to achieve sustainable development goals (SDGs). The latter are intended, in part, to promote industrialization, and improved human living and working standards. This chapter identifies and analyses the importance of business plan for family-owned food processing small and medium enterprises (Fo-SMEs). It advocates for the establishment of an “integrated planning” strategy to link Fo-SMEs and government support system for business development. Business-planning forecasts industrial production based on consumers' demands. Integrated planning ensures sustainability of Fo-SMEs, farmers' economic growth, and consequent achievement of SDGs. Tanzania Fo-SMEs serve as a useful lesson for developing economies. Future studies should consider Fo-SMEs' succession planning framework.
... To validate our assumptions regarding differences in gestation speed, we conducted a comprehensive review of studies that have used gestation activities either as dependent or independent variables and/or units of analysis (Alsos & Kolvereid, 1998;Arenius et al., 2017;Carter et al., 1996;Davidsson & Honig, 2003;Delmar & Shane, 2003;Diochon et al., 2005;Liao et al., 2005;Lichtenstein et al., 2007;Menzies et al., 2006;Newbert, 2005;Parker & Belghitar, 2006;Reynolds, 1997;Reynolds & Miller, 1992;Sequeira et al., 2007;Van Gelderen et al., 2006) and derived a set of 12 gestation activities: prepared business plan, filed or taken over a patent, developed prototype, received government funding, organized venture team, started to work full time for the venture (founders), registered business as legal entity (incorporation), hired employees, rented/leased/bought premises, received funding from an external stakeholder, completed good or service which is ready for sale, received income from sales. ...
Article
Gestation speed has long been acknowledged as an important proximate measure of venture performance. Yet, research into its antecedents remains scarce. Through a longitudinal study of eight new technology ventures, we examine in-depth the relationships between the use of causal and effectual logics and gestation speed. Our data show that heuristics from both logics can act as pedals or brakes on gestation speed. However, we also find that nascent entrepreneurs who apply effectuation as their predominant decision-making logic gestate more quickly than their peers. The inductive model we develop from the findings offers nine mechanisms relating decision heuristics to proximate performance. Additional longitudinal data provide evidence for a positive relationship between higher gestation speed and the probability of long-term success.
... This typically includes analyzing the competitive landscape, forming financial projections by estimating costs and revenues for several years, and designing a relatively well-defined timeline of the actions to be taken. The literature suggests that this may have positive effects on performance (Delmar & Shane, 2003;Hiatt & Sine, 2014). ...
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Research Summary An important strategic choice for early-stage ventures is about how to learn about the market. This choice often translates into focusing on either experimentation or planning. These strategies are best supported by different structures. Hence, the fit between strategy and structure should be considered by stakeholders evaluating the venture. We hypothesize that communicating coherent combinations – experimentation and informal structure or planning and formal structure – is positively associated with evaluation and that evaluators with entrepreneurial experience are more sensitive to this coherent choice. We test this argument combining data from a university-based venture competition and an online experiment. We find a robust positive correlation between coherent choice and evaluation. We find no clear evidence that this pattern is driven by evaluators with entrepreneurial experience. Managerial Summary The Lean Startup suggests that entrepreneurs should rely on experimentation rather than the more traditional planning approach. However, the value of experimentation might depend on the structure the venture adopts. We ask whether the fit between strategy and structure plays a role for early-stage ventures. We examine this problem in the context of venture evaluation. We analyze data from a university-based venture competition and an online experiment. We find evidence that ventures communicating coherent choices – experimentation and informal structure or planning and formal structure – tend to be evaluated better than those communicating alternative choices. However, contrary to our expectation, this pattern does not appear to be driven by evaluators with entrepreneurial experience. This article is protected by copyright. All rights reserved.
... Of course, there are some widely used tools like formal business plans or the business model canvas that seek to provide some structure to the process of composing and presenting a belief (Delmar & Shane, 2003;Osterwalder & Pigneur, 2010). Depending on how well these tools are implemented, they may help illuminate the inner causal structure and coherence of a belief, and help the entrepreneur recognize inconsistencies or omitted variables, and make the belief more amenable to interpretable testing in a next step. ...
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Building on pragmatism, we advance an entrepreneur-as-scientist perspective and depict entrepreneurs as engaging in causally inferential action by forming beliefs, testing these beliefs, and responding to the feedback received. However, this sequence of entrepreneurial actions arrives with a set of companion doubts, namely doubt about product-market fit because the entrepreneurs’ beliefs are self-chosen, doubt about feedback validity from false positives or false negatives, and doubt about over- and underfitting in responses to feedback. We discuss the rationality of heuristics deployed by the entrepreneur to overcome these doubts. Our insights contribute to the micro-foundations of entrepreneurial action and strategy by explaining how entrepreneurs generate the information to produce value out of uncertainty.
... Third, online communities can provide tailor-made plans for entrepreneurs by engaging in frequent interaction with the support seeker. Entrepreneurial action planning is particularly useful in times of high uncertainty (Giones et al., 2020) and may have a positive effect on survival (Delmar & Shane, 2003;Song et al., 2019) as well as performance (Chrisman et al., 2005) which makes online communities a critical infrastructure. ...
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Plain English Summary As an entrepreneur (during the COVID-19 pandemic), start looking for support in online communities—they are more than just knowledge repositories! While access to support is severely hampered by social distancing measures during the COVID-19 pandemic, entrepreneurs can still access support in online communities. Yet, depending on how entrepreneurs approach them, communities offer more than just simple advice: depending on how entrepreneurs frame their posts and interact with the community, they can manage what support they receive from online communities. (1) Online communities can help resolve problems and collect critical resources in times of crisis, such as digital marketing tools to compensate client loss. (2) Online communities can support entrepreneurs to waterproof ideas in early venture stages through feasibility checks so that entrepreneurs can better evaluate opportunities. (3) Online communities can help understand and reflect on new emerging topics, such as work from home. (4) Online communities can provide tailor-made plans for entrepreneurs by engaging in frequent interaction with support seekers. Taken together, online communities can assist entrepreneurs in their actions which are especially important in times of great uncertainty.
... The study discovered that planning is critical to the achievement of SMEs performance. Nevertheless, Delmar and Shane (2003) also found that business plans enhance performance. Similarly, they reported that having a business plan before the implementation of marketing activities leads to the hazard. ...
... Researchers also argue that business planning is beneficial under unfavorable conditions, like knowledge generated through planning to reduce perceived uncertainty (Castrogiovanni, 1996;Thiele and Fellnhofer, 2015), also enabling founders to achieve quicker decision-making in business sensing based on trials-and-errors learning (Delmar and Shane, 2003;Thiele and Fellnhofer, 2015). ...
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Purpose The purpose of this study is to analyze the systematic relationships among dynamic capabilities in startups’ survival. Design/methodology/approach This study is based on a systematic literature review on dynamic capabilities related to startups’ survival, following the content analysis approach. Findings This study presents four different perspectives of analysis about dynamic capabilities from resources exchange and business factors that meet needs of startups' survival. It also points out new area for future research in this field. In doing so, this study differentiates itself by its approach not limiting dynamic capabilities research and enriching entrepreneurs' capability theory. Practical implications By indicating an evolution of dynamic capabilities theory among tangible and intangible resources exchange in a more favorable adaptation to startups growth, this study boosters and contributes to the society, economy in general and to the science of business management in various perspectives such as overcoming cognitive barriers, entrepreneur’s commitment, innovation capabilities and knowledge capacity of startups. Originality/value This study amplifies dynamic capabilities vision in startups’ survival as one of the main sources for growth in this type of organizations. It also develops a deeper understanding about new avenues for dynamic capabilities theory among tangible and intangible resources exchange.
... Retomando el tema de estrategia y desempeño, el planeamiento estratégico es un antecedente del accionar de la empresa; este define el marco para el desarrollo de las acciones y facilita el logro de objetivos (Delmar y Shane, 2003). En lo relativo a resultados de innovación, las orientaciones estratégicas son consideradas un elemento oportuno en los procesos de innovación; por lo cual, los resultados de la innovación parecen beneficiarse de la combinación de distintas orientaciones (Adams, Freitas y Fontana, 2019). ...
Article
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El objetivo del presente estudio fue medir si el efecto de la orientación emprendedora en el desempeño innovador está moderado por el tipo de orientación estratégica que siguen las mipymes. Para ello, se estimó un modelo de regresión jerárquica secuencial. Los resultados mostraron que, en mipymes que brindan atención a tendencias del entorno, aprovechan oportunidades de mercado y productos y tienen mayor flexibilidad operativa (prospectoras), el efecto positivo de la orientación emprendedora en el desempeño innovador resultó ser mayor que en aquellas mipymes orientadas a la eficiencia operativa, al control de costos y al mantenimiento de la cartera de productos para sus clientes (defensoras).
... Entrepreneurial intention represents cognitive action plan that individuals pursue in order to create new ventures (Fini et al., 2009). Entrepreneurial ideas often arise from inspiration or opportunity identification, but in order to act upon them entrepreneurial intention is essential (Delmar and Shane, 2003). In order to nurture entrepreneurial potential, deeper understanding of entrepreneurial intention creation is vital (Krueger, 2017) as well as more profound comprehension of context in which entrepreneurial process occurs including institutional context. ...
Conference Paper
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This article briefly analyses the works of Acad. Mihail Arnaudov. He is an author of insightful research of a number of classics of the Bulgarian and world literature. His determination and persistence with which he worked on his research are incredible and admirable. The long-lasting research activity of Acad. Mihail Arnaudov is “sealed” on the pages of books, periodicals, prints and thematically collected clippings from Bulgarian and foreign publications. With the help of his numerous research works covering the topic of Bulgarian National Revival, Acad. Mihail Arnaudov managed to realize his noble ambition – to create a scientific epic of the spiritual leaders of his people, or the “Unforgettable” as he called them himself, during one of the most difficult and most glorious periods in the Bulgarian history. And with even more passion he kept studying life and works of postliberation writers.
... Berman, Gordon and Sussmann (1997) argued that enterprises that plan strategically obtain better financial results. Delmar and Shane (2003) found in a longitudinal analysis that new ventures conducting formal strategic planning have higher survival rates. Armstrong (1982) reviewed 12 strategic planning and performance studies and found that strategic planning was enhancing overall performance. ...
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The major objective of this research was to assess the impact of corruption upon the prevalent religious values in Peshawar. The conceptual framework comprise of perception of religious values as independent variable, and corruption perception as dependent variable. The objectives were to find out people’s perception, causes and institutional role regarding corruption and social values, and suggest remedies. A sample size of 150 respondents i.e. 98 from universities, 27 from anti corruption agencies (NAB) and 25 from religious institutions, was selected to ascertain their attitude towards phenomena at hand through Likert scale as measurement tool. Proportionate random sampling technique was used for choosing the respondents. Association test (Chi Square test) was used to determine the association between dependent and independent at bi-variate level. Gamma () statistics was further used for determining the strength and direction of relationship. the study found that most independent variables are significantly associated with corruption perception, which included knowledge of religion (P<0.000), Ijtehad in controlling corruption (P=0.000), bill boarding of religious values (P=0.000), educational support to highlighting religious values (P=0.000), involving the religious leaders (P=0.000), religion stresses to intact social values (P=0.000), religious institution for stressing over moral training (P=0.000). Moreover, practicing religion (P=0.000), regular religious awareness to guide masses (P=0.000), imposition of religious punishments (P=0.000). The study made it clear that against the ideal orientation to values, the individual’s sense of value is under change because of changes in real orientations to values, caused due to changes in social circumstances. It is concluded that the social values are deteriorating, being replaced by corruption which is getting the rank of a rising social value and is largely in practice amongst members of society, especially in various economic aspects of social life. Nevertheless, people still believed that prevalent social order is strong enough to combat this shifting dynamics, by generating a morality based environment.
... Entrepreneurial intention represents cognitive action plan that individuals pursue in order to create new ventures (Fini et al., 2009). Entrepreneurial ideas often arise from inspiration or opportunity identification, but in order to act upon them entrepreneurial intention is essential (Delmar and Shane, 2003). In order to nurture entrepreneurial potential, deeper understanding of entrepreneurial intention creation is vital (Krueger, 2017) as well as more profound comprehension of context in which entrepreneurial process occurs including institutional context. ...
Conference Paper
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Entrepreneurship is an important driver of economic progress and growth. In an effort to build an innovative economy, promoting youth entrepreneurship should be a priority. Younger individuals are in general more mobile, proactive, creative, innovative, willing to change and adaptable than older population and as such represent an important strategic resource of any national economy. To encourage the development of entrepreneurial intentions among young adults, it is essential to develop an understanding of their antecedents. The objectives of this research were to determine young adults' perceptions of the importance of formal and informal institutional factors in the context of a hypothetical decision to start a new business venture and to determine the impact of these perceptions on their entrepreneurial intentions. The primary survey was conducted in the Republic of Croatia via online survey questionnaire accessed by 301 respondents aged 18 to 30 years. Research results indicate that higher perception of formal and informal institutional factors' importance is related to higher entrepreneurial intentions score.
... Entrepreneurial intention represents cognitive action plan that individuals pursue in order to create new ventures (Fini et al., 2009). Entrepreneurial ideas often arise from inspiration or opportunity identification, but in order to act upon them entrepreneurial intention is essential (Delmar and Shane, 2003). In order to nurture entrepreneurial potential, deeper understanding of entrepreneurial intention creation is vital (Krueger, 2017) as well as more profound comprehension of context in which entrepreneurial process occurs including institutional context. ...
Conference Paper
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Empathy enhances leadership effectiveness. In times of the pandemic and increased commitment to fostering diversity and inclusion, it is considered an essential ingredient of leadership. The importance of empathy in leadership is especially emphasized in global organizations operating in a cross-cultural and multicultural environment. This study aims to develop a multi-level conceptual framework of the impact of empathy on leadership effectiveness in the field of business management. For this purpose, a systematic literature review based on Web of Science and Scopus databases has been conducted. The content analysis method was used to analyze and synthesize qualitative data. The research results show that empathy enhances leadership effectiveness through its extensive effects on the level of leader, followers, and organization. It contributes to raising self-awareness, developing listening and mentoring skills, and enhancing the relationships of the leader as an individual. On the followers’ level, empathy in leadership is associated with improving well-being, empowering, and providing role models in developing emotional intelligence. It enhances organizational effectiveness by inspiring diversity and inclusion, increasing employee engagement and retention, and creating a culture of responsibility, care, and innovation. These findings have practical implications for leadership and organizational development specialists, human resources managers, and business leaders. The interdisciplinary nature of the topic calls for the collaboration of researchers from the fields of business economics, psychology, and neuroscience to advance future research on empathy in leadership.
... Il favorise le développement du produit et l'organisation des activités. Il permet aussi de se focaliser sur les actions importantes et ne pas dévier des objectifs initiaux (Delmar et Shane, 2003). Par conséquent, les entrepreneurs qui élaborent un plan d'affaires ont de fortes chances de continuer la création de leur entreprise que les autres (Liao et Gartner, 2006). ...
Article
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La bonne conduite d’un projet entrepreneurial est une question qui suscite un débat houleux entre les acteurs économiques, politiques et sociaux à l’échelle tant nationale qu’internationale. En effet, la connaissance des facteurs facilitant le succès entrepreneurial est une condition indispensable afin de créer une dynamique entrepreneuriale au sein d’un territoire donné. Dans cet article, nous essayons d’analyser les différents facteurs permettant à l’entrepreneur d’assurer la continuité de son projet entrepreneurial et de participer au développement économique et social de son territoire. Pour ce faire, nous avons abordé une analyse de la littérature traitant la question des déterminants de la réussite entrepreneuriale, d’une part. D’autre part, nous avons conduit une enquête quantitative afin de confirmer les constatations théoriques par des résultats empiriques. L’étude confirmatoire a été menée auprès d’un échantillon de 150 entrepreneurs de la ville d’Er-Rachidia. Les données collectées ont réconforté les apports théoriques des auteurs ayant traité la question principale du présent travail. L’étude nous a ainsi permis de relever trois types de facteurs sont essentiels afin d’appréhender la problématique de la réussite entrepreneuriale à savoir : les facteurs personnels, les facteurs environnementaux et les facteurs managériaux. Par conséquent, la présente recherche pourra constituer une aide aux futurs entrepreneurs dans la mesure où elle propose les principaux déterminants auxquels ils doivent porter plus d’attention afin de réussir leurs projets entrepreneuriaux. Elle constituera aussi une référence à la disposition des chercheurs qui ambitionnent de mieux assimiler le comportement de l’entrepreneur face aux différents déterminants qui conditionnent son succès. La principale limite de notre recherche est liée au caractère temporal des résultats obtenus. D’où, l’importance des facteurs de réussite des entrepreneurs peut varier dans le futur. Par conséquent, d’autres études devront alors être lancées.
... Accordingly, empirical studies have shown that small firms, which use business plans, tend to become more successful in resource mobilisation. For example, in a study with a random sample of 223 Swedish firms, Delmar and Shane (2003) affirm the hypothesis that planning facilitates the development of new ventures by helping to balance resource supply and demand. Concerning financing, Hopp (2015) finds that entrepreneurs who write formal business plan receive more formal financial support than those who do not plan formally. ...
Article
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Purpose: This study investigates a mediational model between legitimated elements, financial resource mobilisation, and subsequent early firm growth among New Technology-Based Firms (NTBFs) using conformity and control perspectives of legitimacy. Design: To test the hypotheses, a longitudinal database of 303 NTBFs from Sweden, Finland, and France is used. The ordinary least square regression analysis method is applied, and the proposed mediation relationships are studied by employing a four-step approach. Findings: This study finds that based on the conformity principle, two out of three legitimated elements (business plan and incubator relationship, but not start-up experience) have an impact on financial resource mobilisation, which in turn, is associated with early growth in NTBFs based on the control principle. Thus, financial resource mobilisation positively mediates the relationships among the two legitimated elements and early growth in NTBFs. Originality: The findings meaningfully contribute to the collective understanding of NTBF growth. While there are studies that have examined the antecedents of growth and finance separately, this study proposes a novel mediational model that integrates both and tests it empirically.
... Planning activities and commitments (Brinckmann et al., 2010;Carter et al., 1996;Delmar & Shane, 2003;Duchesneau & Gartner, 1990;Gruber, 2007;Karlsson & Honig, 2009;Matthews & Scott, 1995;Shane & Delmar, 2004) Resource management (Brush et al., 2001) Role of financing, venture capital (Cassar, 2004;Davila et al., 2003;Hellman & Puri, 2000;Jeng & Wells, 2000;King & Levine, 1993) Role of human capital (Bruderl et al., 1992;Cooper et al., 1997;Chandler, 1998) Product development, experimentation (Brown & Eisenhardt, 1995;Thomke, 1998) Partnerships and alliances, corporate networks (Cooper, 1985;Eisenhardt & Schoonhoven, 1996;Lechner et al., 2006;C. Lee et al., 2001;Uzzi, 1996) Marketing strategy (Knight, 2000) ...
Article
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Although entrepreneurship‐related papers have had some representation in POM over the past thirty years, the topic still seems a bit like a poor stepchild in the research of operations management (OM) scholars. Yet entrepreneurship is important to the economy, and many schools are growing significantly their entrepreneurship programs and offerings, but often without reference to or inclusion of operations courses. This paper is motivated by the question as to the operations needs of new ventures and how they might differ from the needs of large, established firms. Toward that end, we review briefly the state of entrepreneurship scholarship in POM (and beyond), present our own (field‐based) research (and cases), and propose a framework for what we call “operations for entrepreneurs,” that we hope can be a basis for further productive research and curriculum development by the OM community. This article is protected by copyright. All rights reserved
... Concerning the first studied task related to business planning-i.e., having a formal written business plan- Capelleras and Greene (2008) point to a direct and tangible negative association between writing a business plan and new venture creation speed. Writing a business plan requires additional and time-consuming investigation about markets, suppliers, legal aspects, and resources necessary to successfully launch the new venture (Cooper & Mehta, 2003;Delmar & Shane, 2003). Additionally, potential entrepreneurs who write a business plan will likely collect more information about the identified business opportunity, which equips them with purposeful means to developing better informed decision-making processes related to, for example, goal setting and contract formalization with prospective suppliers, other professionals (accountants and lawyers), and customers (Carter et al., 1996;Cooper & Mehta, 2003;Capelleras & Greene, 2008). ...
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This study scrutinizes how the perceived new venture creation speed is explained by variables connected to the individuals' human capital, the business planning process, and the university's context. The empirical analysis employs an ordered logit model on a sample drawn from the GUESSS databases for 2018 that includes information for 636 Costa Rican university students who are involved in nascent entrepreneurial activities. The results highlight two different patterns of new venture creation speed among nascent entrepreneurs: older students who are carrying out tasks related to their potential venture-i.e., writing a business plan and searching for external funding-perceive that they need less time to create their new business, whereas university's program learning slows down the perceived start-up speed among individuals with past entrepreneurial experience. Additionally, the findings highlight the importance of business planning tasks for developing practical and strategic capabilities, as well as of the business-specific cumulative knowledge generated by past entrepreneurial experience. Implications on how universities can promote students' entrepreneurial activity by improving their entrepreneurial environment and program learning are discussed.
... For example, business plans were assumed to be pivotal in new venture development and funding until the early 2000s (DeThomas & Grensing-Pophal, 2001;Stutely, 2007;Timmons, Spinelli, & Zacharakis, 2004), when both practitioners and researchers empirically scrutinized their effectiveness and began to question their value (e.g., Kirsch, Goldfarb, & Gera, 2009). Although the value of business plans as documents was then increasingly questioned, the value of planning efforts was found to be positive (Brinckmann, Grichnik, & Kapsa, 2010;Delmar & Shane, 2003;Shane & Delmar, 2004). ...
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Recognizing the importance of various types of artifacts for entrepreneurship, design science (DS) has been proposed as an inclusive approach that combines relevance and rigor. By enabling researchers to go beyond their traditional roles as observers and analysts of established artifacts to help design new artifacts, DS can improve the relevance of entrepreneurship research. However, there is a paucity of knowledge on how this type of research can be published in leading entrepreneurship journals. In this editorial, we seek to provide practical guidance on how to craft and assess DS studies that target ETP and other top-tier journals.
... This theory could help to explain why an activity is depleting self-regulation at one time, but less (or more) the next time. Studies on entrepreneurial action have found that some activities might be more important than others at the various stages of start-up development (Delmar and Shane 2003), hence by timing of an activity, the entrepreneurs can influence their self-regulation strength and venture performance. ...
Article
Entrepreneurs apply self-regulation to achieve their entrepreneurial goals and to achieve the best combination of what one has available. Many patterns of self-regulation break down when people are challenged, under stress or fatigued; typical conditions for entrepreneurial activity. Through the adoption of unobtrusive wearable sensors this study makes a methodological contribution by visualizing the depletion and recovery cycles and associating these with the ups and downs of the entrepreneurial journey. We show how the cycles of self-regulation depletion and recovery are impacted by the entrepreneur journey, demonstrating the importance of maintaining self-regulation and potential consequences on performance and wellbeing when self-regulation is not maintained. We put forward a research agenda for the study of entrepreneurial action, calling on researchers to expand the theory of entrepreneurial action by adding an entrepreneur centred explanation for entrepreneurial activities.
... Entrepreneurial intention represents cognitive action plan that individuals pursue in order to create new ventures (Fini et al., 2009). Entrepreneurial ideas often arise from inspiration or opportunity identification, but in order to act upon them entrepreneurial intention is essential (Delmar and Shane, 2003). In order to nurture entrepreneurial potential, deeper understanding of entrepreneurial intention creation is vital (Krueger, 2017) as well as more profound comprehension of context in which entrepreneurial process occurs including institutional context. ...
Conference Paper
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In this publication we set an objectively complicated task to analyse the opportunities of strategic decision-making during crisis by attempting to make a partial analysis of the ongoing crisis caused by the COVID 19 pandemic and the emerged military conflict between the Russian Federation and Ukraine. Crisis circumstances require societies to quickly rethink and develop adequate strategies and respectively to formulate strategic goals and plan processes. In many cases preliminary analysis and assessment are practically impossible /especially when it comes to natural disasters or crises/ and this requires a different operational order of problem solving, which includes formulating new unconventional goals and then implementing planning not objectified by a particular and accurate analysis. All this puts whole systems and societies to the test, and those who are empowered to manage the process – under high pressure from unforeseen circumstances and not always objective judgments. Which, in turn, creates a number of subsequent critical issues in the management process.
... Third; individuals differ in terms of their planning approach (Delmar & Shane, 2003), knowledge and experiences (Wiklund & Shepherd, 2008), organisational context (Douglas & Shepherd, 2000), resources and timing (Seghers, Manigart, & Vanacker, 2012), attitudes (Van Auken, Kaufmann, & Herrmann, 2009), and perception of morality (McVea, 2009), and these variations influence venture exploitation decisions. ...
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Despite the fact that the field of entrepreneurship has evolved from examining words and deeds to attitudes and beliefs and, more recently, neurological processes, there is a lack of a comprehensive theoretical framework that facilitates the scientific use and exploitation of neuroscience technologies and methods for the advancement of entrepreneurship research. As a result, this study addresses for the first time, at the intersection of the fields of neuroscience and entrepreneurship, how neuroscience technologies could aid the advancement of entrepreneurship research. This question is approached from four different angles. First, we will assess the current state of the art in brain-driven entrepreneurship research. Second, analyse and identify the best neuroscience technologies and methods for entrepreneurship research. Third, developing an experimental design that could be used in entrepreneurship research, and finally, using electroencephalography technology (EEG) and the event-related potential method (ERP) to investigate the relationship between emotions and decision-making. The findings demonstrate the importance of incorporating neuroscience technologies, specifically EEG and ERP, into entrepreneurship research in terms of data quality and depth of analysis. This study also reveals a methodological and empirical foundation for integrating neuroscience technologies into any relevant theme of entrepreneurship research. Also, the results of this research could be used to find new ways to support and improve entrepreneurial performance that are based on neuroscience
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It is the actions of entrepreneurs that give rise to new organizations. However, a comprehensive understanding of what entrepreneurs do and what actually leads to venture success is currently lacking. To summarize existing research, we conduct a structured literature review including 59 empirical articles linking entrepreneurs’ behavior to venture success. We define “actions” as discrete units of “doing” that can—potentially—be observed by others and “success” as firm-level success measured by firm status (e.g., firm survival) or performance (e.g., sales). More than half of the included articles are based on data from the Panel Study of Entrepreneurial Dynamics (PSED), but there are also important “stand-alone” studies. We analyze the “what,” the “how,” the “how much,” and the “when” of entrepreneurs’ actions that lead to venture success. In addition, we integrate the view of entrepreneurship as an evolutionary process. The analysis reveals that studies typically analyze “what” entrepreneurs but less often “when” and “how much” and rarely “why,” “how,” and “what else” they do. Based on our findings, we develop a six-point research agenda. Specifically, we argue that future research should strive to understand the motives behind entrepreneurs’ actions, consider how entrepreneurs conduct activities, and what kind of business ideas they are working on. Also, applying alternative measurements and capturing a more complete picture of what entrepreneurs do when starting a business but also aside from their venturing efforts might contribute to a better understanding of the relationship to venture success.
Article
Purpose Why do academic spin-offs (ASOs) have different growth performance? What makes ASOs grow better? Based on the perspective of academic entrepreneurs, this study systematically studies the influence mechanism of the growth of Chinese ASOs and establishes an analytical framework for the influence of academic entrepreneurs on the growth of ASOs. Design/methodology/approach This study takes ASOs of Chinese Academy of Sciences as a sample. On the basis of literature analysis, the questionnaire is designed to collect the measurement items of variables and amended after interviewing the well-known scholars and experienced enterprise managers. The entrepreneur capital theory and the triple helix (TH) model are used to formulate the research model. Ordinary least squares (OLS) regression analysis was used to analyze the relationship between academic entrepreneurs' social capital, human capital and enterprise growth. Data processing, reliability and validity analysis, hypothesis testing and so on are all carried out by Statistical Product and Service Solutions (SPSS), which is a common method of first-hand data processing. Findings According to findings, capital of academic entrepreneurs exerted a positive impact on ASOs growth. First of all, ASOs growth is positively affected by external connections and human capital of academic entrepreneurs. Second, the institutional environment and location environment play a regulation role. However, regulation role of the industrial environment is not proved. Third, the research has shown academic entrepreneurs' capital and ASOs growth is regulated by both path guidance and resources support ways. Finally, according to further test, ASOs growth is positively affected by both business contacts and political contacts of academic entrepreneurs, and the role of political contacts is greater. Research limitations/implications Inevitably, this research has limitations, to some extent, which need to be further improved and supplemented in future studies. First, samples are special. Due to the difficulty of data acquisition, this research only obtains data from ASOs of the Chinese Academy of Sciences system. Second, there should be diverse methods to measure the growth of ASOs. Originality/value Based on composition-based view and triple helix model, this study constructs an analytical framework of the influence of academic entrepreneur capital on ASOs growth and verifies the influence and mechanism of academic entrepreneur social capital and human capital on enterprise growth. The conclusion of this study provides empirical support for the development of composition-based view and also proves the effectiveness of this theory in studying ASOs related issues in China. In addition, the research conclusion is also the practical application of triple helix model, which proves the effectiveness of triple helix model in analyzing the growth mechanism of ASOs.
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The purpose of this paper is to investigate the direct effects of personality traits on entrepreneurial intention (EI), the theory of planned behavior (TPB) on EI, as well as the indirect effects of personality traits on EI through the elements of TPB. In order to enhance the originality of this study, the model of personality and the theory of planned behavior were combined to explain entrepreneurial intention (Zhang & Cain, 2017; Sousa, Blamey, Reason, Ramos, & Trigo, 2018). This study utilized a 55-item questionnaire to assess personality traits (openness to experience (O), conscientiousness (C), extraversion (E), agreeableness (A), neuroticism (N), and risk aversion (R)), the elements of TPB (attitude (AT), subjective norms (SN), and perceived behavioral control (PBC)) and EI (Tsaknis, 2022). The study sample (n = 315) included students of the business department of a public university in Athens. The results indicate that C has a direct negative impact on EI. O, C and E have an indirect positive effect on EI through AT and PBC. N has an indirect negative effect on EI through PBC and finally R has an indirect negative effect on EI through AT and PBC. Finally, AT and PBC have a direct and positive effect on EI. The data were analyzed empirically using the Jamovi program and R language (Rosseel, 2012). In light of these findings, more studies are needed to corroborate and validate the findings presented here, especially in other settings.
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Cross-sectional studies of attitude-behavior relationships are vulnerable to the inflation of correlations by common method variance (CMV). Here, a model is presented that allows partial correlation analysis to adjust the observed correlations for CMV contamination and determine if conclusions about the statistical and practical significance of a predictor have been influenced by the presence of CMV. This method also suggests procedures for designing questionnaires to increase the precision of this adjustment.
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This paper suggests that entrepreneurship is the process of “emergence.” An organizational behavior perspective on entrepreneurship would focus on the process of organizational emergence. The usefulness of the emergence metaphor is explored through an exploration of two questions that are the focus of much of the research in organizational behavior: “What do persons in organizations do?” (we will explore this question by looking at research and theory on the behaviors of managers), and “Why do they do what they do?” (ditto for motivation). The paper concludes with some implications for using the idea of emergence as a way to connect theories and methodologies from organizational behavior to entrepreneurship.
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Researchers have been examining the effects of formal strategic planning on small firm financial performance for more than twenty years. Reviewers of prior studies have drawn differing conclusions as to whether formal planning improves small firm performance. We have applied meta-analysis for the first time to the results of previous studies on formal strategic planning and small firm performance. The results suggest that even though the size of the effects for planning for individual studies Is not large, the overall relationship between formal planning and performance across studies Is positive and significant. Much of the variance in the size of the effects, however, Is not explained by sampling error, Indicating the potential for other variables to moderate the effects of planning on the performance of small firms. It is concluded, in general, that strategic planning is a beneficial activity for small firms.
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This paper resolves the long-standing debate between the two dominant process schools in strategy. Analysis of the planning practices of 656 firms shows that formal planning and incrementalism both form part of 'good' strategic planning, especially in unstable environments. Environment neither moderates the need for formal planning nor the direction of the planning/performance relationship, bur does moderate firm planning capabilities and planning flexibility. In unstable environments planning capabilities are far better developed and formal plans more amenable to change. The planning/performance relationship is, however, moderated by planning duration: at least four years of formal planning are required before external performance associations are noted. Copyright (C) 1999 John Wiley & Sons, Ltd.
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This paper investigates how the interorganizational networks of young companies affect their ability to acquire the resources necessary for survival and growth. We propose that, faced with great uncertainty about the quality of young companies, third parties rely on the prominence of the affiliates of those companies to make judgments about their quality and that young companies "endorsed" by prominent exchange partners will perform better than otherwise comparable ventures that lack prominent associates. Results of an empirical examination of the rate of initial public offering (IPO) and the market capitalization at IPO of the members of a large sample of venture-capital-backed biotechnology firms show that privately held biotech firms with prominent strategic alliance partners and organizational equity investors go to IPO faster and earn greater valuations at IPO than firms that lack such connections. We also empirically demonstrate that much of the benefit of having prominent affiliates stems from the transfer of status that is an inherent byproduct of interorganizational associations.•.
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It is difficult to introduce the concept of organizational goal without reifying the organization-treating it as something more than a system of interacting individuals. On the other hand, the concept of goal appears indispensable to organization theory. This paper proposes a definition of "organizational goal" that resolves this dilemma. The goal of an action is seldom unitary, but generally consists of a whole set of constraints the action must satisfy. It appears convenient to use the term "organizational goal" to refer to constraints, or sets of constraints, imposed by the organizational role, that have only an indirect relation with the personal motives of the individual who fills the role. More narrowly, "organizational goal" may be used to refer particularly to the constraint sets that define roles at the upper levels of the administrative hierarchy. In actual organizations, the decision-making mechanism is a loosely coupled, partially decentralized structure in which different sets of constraints may impinge on decisions at different organizational locations. Although the description of organizational goals is consequently complex, the concept of goal can still be introduced in an entirely operational manner.
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The research reported in this article is based on a study of the strategic planning practices of the 500 fastest growing privately held smaller companies in the United States ranked according to percentage of sales increases from 1978 to 1982.p1 Based on the information provided, a clear picture emerges regarding the actual role of strategic planning in rapid growth companies.
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This paper resolves the long-standing debate between the two dominant process schools in strategy. Analysis of the planning practices of 656 firms shows that formal planning and incrementalism both form part of ‘good’ strategic planning, especially in unstable environments. Environment neither moderates the need for formal planning nor the direction of the planning/performance relationship, but does moderate firm planning capabilities and planning flexibility. In unstable environments planning capabilities are far better developed and formal plans more amenable to change. The planning/performance relationship is, however, moderated by planning duration: at least four years of formal planning are required before external performance associations are noted. Copyright © 1999 John Wiley & Sons, Ltd.
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This paper examines processes of trial-and-error learning during the development of a technological innovation by an interorganizational joint venture created expressly for developing and commercializing products from the new technology. We develop a model of adaptive learning, which incorporates elements from laboratory models of learning and applies them to the field research setting. The learning model focuses on relationships between the goals, actions, and outcomes of an innovation team within the joint venture as it develops the innovation over time, and the influences that environmental events and external interventions by resource controllers in parent companies have on the learning process. The model is tested based on a real-time longitudinal study of the development of a biomedical innovation (therapeutic apheresis) from 1983 to 1988. Different patterns of learning were observed in different periods of innovation development. Event time series analyses clearly contradict the learning model during an initial expansion period, but strongly support the model during a subsequent contraction period. Explanations for why these different patterns of organizational learning occurred over time are provided, and focus on a set of organizational structures and practices which are commonly used to manage innovation development, but which inhibit learning.
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This paper examines rates of entrepreneurship over time in the U.S. economy. It finds strong support for the argument that variations in rates of entrepreneurship follow a Schumpeterian model. Changes in rates of entrepreneurship appear to be driven by changes in technology. Some evidence is also found for the effects of the Protestant Ethic, interest rates, prior rates of entrepreneurship, risk-taking propensity, business failure rates, economic growth, immigration, and age distribution of the population.
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Although eyidence is equivocal and often contradictory, prospective business founders are generally advised to develop formal plans of their proposed ventures. Consistent with this advice, some scholars have suggested that the high mortality of new small businesses could be reduced through greater pre-startup planning. However, there is an emerging view that the value of planning is context-dependent. This view is elaborated here as it applies to new small businesses. First, ways in which pre-startup planning can facilitate survival are delineated. Then, contextual conditions that can limit these impacts are described. Finally, suggestions are offered which show how this view can be used to guide future research and extend the body of knowledge.