Entrepreneurial Leaps: Growth Processes in Transition Phases Between Dynamic States

Abstract

We use a multiple case study approach to investigate “entrepreneurial leaps,” transition phases between dynamic states in which entrepreneurial action focused on reconfiguring key elements of the business model allows a firm to tap into new pools of resources through accessing and exploiting new market. Based on an analysis of 24 cases from three European countries, we derive a general process model of entrepreneurial leaps and identify four different patterns of how these transitions typically unfolds. The combination of dynamic states and entrepreneurial leaps can be used as a general framework for explaining nonlinear growth processes in firms.

Business modeling under adversity: Resilience in international firms

“…It has been shown that the dynamic-states approach is specifically consistent with the BM concept and BMs' non-linear dynamics; hence, dynamic states represent "the best perceived match between a business model and the market potential" (Levie & Lichtenstein, 2010: 333). This is because BMs contain the inherent feature of being both stable and dynamic at the same time, in order to maintain themselves as a whole and remain sustainable and viable in face of external changes (Sternad & Mödritscher, 2022) T A B L E 3 Additional evidence from the data.…”

“…Furthermore, this approach crucially reveals BMs as being in “constant flux” (Andries et al, 2013: 308), thereby showing that businesses sustain their existence by continuously redesigning their BMs. In this regard, the dynamic states perspective employed here (Levie & Lichtenstein, 2010; Sternad & Mödritscher, 2022) serves as a fruitful approach to grasp the changes that firms undergo so as to remain viable under adversity, even as they maintain their structure and functioning. We thereby also respond to calls in the literature to examine BM dynamics not only in young ventures but also in established firms (Demil et al, 2015; Schaltegger et al, 2016).…”

“…It has been shown that the dynamic‐states approach is specifically consistent with the BM concept and BMs' non‐linear dynamics; hence, dynamic states represent “the best perceived match between a business model and the market potential” (Levie & Lichtenstein, 2010: 333). This is because BMs contain the inherent feature of being both stable and dynamic at the same time, in order to maintain themselves as a whole and remain sustainable and viable in face of external changes (Sternad & Mödritscher, 2022). Moreover, Levie and Lichtenstein (2010: 334) stipulate that shifts from one dynamic state to another occur due to significant changes in the environment and subsequent “alternations of large parts of the firm's BM and/or a reorganization of the configuration of activities that create value in that business model”; these transformations lead to a new dynamic state.…”

“…We follow process thinking (Langley, 1999) and shift the focus from a static understanding of business models to the dynamics of business modeling in their real‐time embodiment, which is attained through using the diary method. We adhere to the reasoning that business modeling is “a job never quite finished” (McGrath, 2010: 248); therefore, we view BMs as dynamic states that constantly develop through interactions with their environment (Levie & Lichtenstein, 2010; Sternad & Mödritscher, 2022). Hence, we build on understanding BMs as purposefully designed systems (Amit & Zott, 2001; Teece, 2010) that change “as a result of exogenous shocks that shift the objective interdependencies among firms and, therefore, require managers to make new design choices that optimize the BM to the new conditions” (Martins et al, 2015: 101).…”

Mixed embeddedness and entrepreneurship beyond new venture creation: Opportunity tensions in the case of reregulated public markets

“…Continued tension and a strong belief that the projection is correct, results in relief of that tension. This relief is not incidental but intentional (Lichtenstein, 2016; Sternad and Mödritscher, 2020) and is achieved by means of the entrepreneur acting on the opportunity. Each phase of opportunity tension, if relieved or acted upon, leads to the generation of value in the form of new products, diversification, a new or modified business model, growth and/or a continued means of survival and thus a new dynamic state.…”