How Open System Intermediaries Address Institutional Failures: The Case of Business Incubators in Emerging-Market Countries

Dutt, Nilanjana; Hawn, Olga; Vidal, Elena; Chatterji, Aaron; McGahan, Anita M.; Mitchell, Will

doi:10.5465/amj.2012.0463

Cited by 216 publications

(238 citation statements)

References 90 publications

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“…Like others, we define organizational sponsorship as the ''intervention by government agencies, business firms, and universities to create an environment conductive to the birth and survival of organizations'' (Flynn, 1993: 129). This definition encompasses different types of sponsors, including incubators, science parks, universities, government programs, franchisors, and venture capital investors (Phan, Siegel, and Wright, 2005;Rothaermel and Thursby, 2005a;Shane, 2012;Amezcua et al, 2013;Dutt et al, 2015;Armanios et al, 2017). Research shows that sponsors provide new ventures with legitimacy via certification, help them develop capacities (Armanios et al, 2017), and provide access to knowledge in the local environment (Amezcua et al, 2013).…”

Section: Organizational Sponsorsmentioning

confidence: 99%

The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

Cohen

Bingham

Hallen

2018

Administrative Science Quarterly

221

194

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Using a nested multiple-case study of participating ventures, directors, and mentors of eight of the original U.S. accelerators, we explore how accelerators' program designs influence new ventures' ability to access, interpret, and process the external information needed to survive and grow. Through our inductive process, we illuminate the bounded-rationality challenges that may plague all ventures and entrepreneurs-not just those in accelerators-and identify the particular organizational designs that accelerators use to help address these challenges, which left unabated can result in suboptimal performance or even venture failure. Our analysis revealed three key design choices made by accelerators-(1) whether to space out or concentrate consultations with mentors and customers, (2) whether to foster privacy or transparency between peer ventures participating in the same program, and (3) whether to tailor or standardize the program for each venture-and suggests a particular set of choices is associated with improved venture development. Collectively, our findings provide evidence that bounded rationality challenges new ventures differently than it does established firms. We find that entrepreneurs appear to systematically satisfice prematurely across many decisions and thus broadly benefit from increasing the amount of external information searched, often by reigniting search for problems that they already view as solved. Our study also contributes to research on organizational sponsors by revealing practices that help or hinder new venture development and to emerging research on the lean start-up methodology by suggesting that startups benefit from engaging in deep consultative learning prior to experimentation.

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Section: Organizational Sponsorsmentioning

confidence: 99%

The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

Cohen

Bingham

Hallen

2018

Administrative Science Quarterly

221

194

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“…For instance, Mair et al (2012) show how the contestation over appropriate actions generates the formation of informal norms and sanctions that allow the development of functioning markets. In another setting, Dutt et al (2016) illustrate how institutional intermediaries that include participation by a wide range of actors can communicate information and norms that lead to the formation of functioning markets as well as other support for new firms. In a related perspective, research suggests that institutional voids create opportunities for entrepreneurs (Allen et al 2005).…”

Section: Informal Institutions Shape Formal Institutions To Effect Enmentioning

confidence: 99%

Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions

et al. 2018

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Abstract. We contribute to the institutions and entrepreneurship literature by examining the interactive influence of formal and informal institutions on new business creation, survival, and growth. Prior literature demonstrates how formal and informal institutions shape the level of entrepreneurship. This paper extends this to examine the cases when formal and informal institutions conflict with one another to cast an analytic eye on why countries differ in the type of entrepreneurial activity in terms of entry, survival, and growth. We argue that national and regional differences can be better explained by the interactive influence of formal and informal institutions. Moreover, we argue that informal institutions dominate formal institutions due to the former's characteristics of deep embeddedness and resistance to change over time. These ideas are presented and summarized into a typology of institutional effects on entrepreneurship activity depending on the combination of formal and informal institutions. The paper concludes with implications for future theory and research on the joint influence of different institutional effects and particularly on the intersection between institutions and entrepreneurship.

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“…The size of organizational populations, however, is small and tends to be skewed reflecting high vibrancy in the formation of entrepreneurial hubs, accelerators (Dutt et al, 2015), training facilities and startups but low counts amongst venture capitalists or specialized law firms (Du Bocher, 2016;GSMA, 2014). The latter are particularly important in developing community norms and a standardized organizing template (Suchman, 1995;Weiss & Weber, 2017b).…”

Section: Organizational Environments: Affecting Organizational Changementioning

confidence: 99%

“…For example, hubs, incubators and accelerators which have been characterized by scholars as opensystem intermediaries (Dutt et al, 2015) that actively engage in the creation of common goods to facilitate social exchange in emerging economies or as assemblers that tie together disparate actors (Friederici, 2016) have shown to morph into central nodes in domestic technology entrepreneurship sectors. These actors engender unprecedented local and international resource flows.…”

Section: Social Environments: Building Local Ties and Transnational Cmentioning

confidence: 99%

Making Sense of Africa's Emerging Digital Transformation and its Many Futures

Ndemo

Weiss

2017

Africa Journal of Management

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How Open System Intermediaries Address Institutional Failures: The Case of Business Incubators in Emerging-Market Countries

Cited by 216 publications

References 90 publications

The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions

Making Sense of Africa's Emerging Digital Transformation and its Many Futures

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