Growth Setbacks in New Firms

Garnsey, Elizabeth; Heffernan, Paul

doi:10.2139/ssrn.1923138

Cited by 8 publications

(11 citation statements)

References 14 publications

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“…Our empirical study revealed that even in an elite sample of young fast-growing firms, most firms face turning points in their life course (cf. Garnsey et al, 2003). These turning points are often caused by problems and constrain growth, and force the firm to focus again after a resource or competence shortage.…”

Section: Discussionmentioning

confidence: 99%

“…We start with quantitative evidence which points to uneven and discontinuous growth in new firms in our sample (see Garnsey et al (2003) for a discussion of the methods used). Though this evidence does not directly map developmental processes, it does show that turning points, interruptions and setbacks are common in the growth paths of new firms.…”

Section: Methodsmentioning

confidence: 99%

“…The resulting measures were coded to represent the turning points in evidence and presented as archetypal growth paths (cf. Garnsey and Heffernan, 2005). In this study the operational definition of the start is the formal registration at the local Chamber of Commerce: the point zero in the growth paths.…”

Section: Operational Definition Of Firm Growthmentioning

confidence: 99%

“…6 Judged by the low incidence of setbacks, this is a successful sample of start ups (cf. Hugo and Garnsey, 2002;Garnsey and Heffernan, 2005). Most firms have grown in an organic way, but four have also grown through takeovers (firms E, H, and Y) or a merger (firm R).…”

Section: Growth Paths Exploredmentioning

confidence: 99%

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New Firms Evolving in the Knowledge Economy: Problems and Solutions Around Turning Points

Stam¹,

Garnsey²

2006

Understanding the Dynamics of a Knowledge Economy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract:This paper explores and explains the emergence and growth of new firms in the knowledge economy. The resource-based view, capabilities approach, and evolutionary economics are used as a foundation for a developmental approach. The development of the firm is conceptualized in terms of processes that include opportunity recognition, resource mobilization, resource generation and resource accumulation, which lead to the development of competences and capital in a base made up of productive, commercial and financial resources. Problems originating within or outside the firm may deplete the productive, commercial and asset base, leading to turning points in the life course of these firms. These have negative consequences when problems are not solved, but positive consequences when they lead to new solutions and the development of new competence. The empirical study shows that even in an elite sample of young fast-growing firms, most firms face turning points in their life course, and thus do not grow in a continuous way. The study shows that quantitative growth indicators do not always reveal growth problems that have been faced by new firms. Some problems do not negatively affect the employment growth of the firm, and other problems are solved before growth stagnates. The qualitative analysis shows that young firms are almost always in disequilibrium: there is almost never a perfect match between the constituents of their resource base, between input resources and requirements for expansion. This explains why continuous growth is so unlikely. Although every firm seems to grow in a unique manner, there is evidence for the presence of a limited set of necessary mechanisms for the growth of (new) firms, which work out in particular ways given the specific context and history of these firms.

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Section: Discussionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Operational Definition Of Firm Growthmentioning

confidence: 99%

Section: Growth Paths Exploredmentioning

confidence: 99%

See 2 more Smart Citations

New Firms Evolving in the Knowledge Economy: Problems and Solutions Around Turning Points

Stam¹,

Garnsey²

2006

Understanding the Dynamics of a Knowledge Economy

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“…Such re-investment is more difficult when lower levels of slack financial resources exist in the firm Katila and Shane, 2005). In contrast, however, the less financial resources that are available, the more a firm has to care about generating short-term revenues to fuel its operations (Garnsey, 1998;Garnsey and Heffernan, 2005). Here, firms can earn immediate revenues by being customer oriented (Bhidé, 2000).…”

Section: Antecedents Of Entrepreneurial and Customer Orientationmentioning

confidence: 99%

Implications of customer and entrepreneurial orientations for SME growth

Eggers

Kraus

Hughes

et al. 2013

Management Decision

189

166

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The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. This article is © Emerald Group Publishing and permission has been granted for this version to appear here http://dro.dur.ac.uk/17255/. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited. 0The implications of customer and entrepreneurial orientations for SME growth 1 IntroductionResearch has long recognized entrepreneurial small-to-medium sized enterprises (SMEs) as a major engine of economic growth (Henderson and Weiler, 2010). Understanding the factors behind growth has a broad economic and policy relevance, especially because growth-oriented enterprises are an important source of job creation and revenue generation in market economies (Parker, 2004;Valliere, 2006). Nevertheless, the growth of SMEs is still one of the unsolved puzzles in management and business research (Davidsson et al., 2005; Clarysse et al., 2011). In order to overcome existing liabilities of smallness or newness (e.g., Aldrich and Auster, 1986; Brüderl and Schüßler, 1990), and to be able to compete successfully in the market, firms need to grow at least to some extent (Garnsey, 1998). Accordingly, firm growth has become the major indicator for overall business success within entrepreneurship research (Carton and Hofer, 2006).Firm growth can be influenced by business orientations such as customer orientation (CO) and entrepreneurial orientation (EO). However, research on EO and CO provides confusing results to some extent. Although there is a general understanding that these constructs are somehow related to increasing firm success, empirical studies have assumed different relationships among them, have measured them differently, and thus have obtained a battery of different results (Atuahene-Gima and Ko, 2001;Baker and Sinkula, 2009;Barrett and Weinstein, 1998;Becherer and Maurer, 1997; Bhuian et al., 2005; Hult and Ketchen, 2001; Li et al., 2008; Liu et al., 2002; Luo et al. 2005; Matsuno et al., 2002;Miles and Arnold, 1991; Narver, 1998, 2000;Tzokas et al., 2001).In addition, it remains unknown to what extent EO and CO represent distinct business philosophies, or whether these constructs contain negative redundancies. Also, it is not clear if these constructs necessarily lead to SME growth or how the different orientations can be balanced within one firm. One might assume that scoring high on all orientations should contribute to the highest growth potential, but this may not be the case....

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Lernende Organisation und KMU

Baldegger¹,

Julien²

2011

Regionales Unternehmertum

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Growth Setbacks in New Firms

Cited by 8 publications

References 14 publications

New Firms Evolving in the Knowledge Economy: Problems and Solutions Around Turning Points

New Firms Evolving in the Knowledge Economy: Problems and Solutions Around Turning Points

Implications of customer and entrepreneurial orientations for SME growth

Lernende Organisation und KMU

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