Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Interorganizational relations --- Organizational behavior --- Strategic planning --- 65.01 --- 658.11 --- 658.11 Kinds and forms of enterprise --- Kinds and forms of enterprise --- Goal setting (Strategic planning) --- Planning, Strategic --- Strategic intent (Strategic planning) --- Strategic management --- Planning --- Business planning --- Behavior in organizations --- Management --- Organization --- Psychology, Industrial --- Social psychology --- Intergroup relations --- Complex organizations --- 65.01 Methods and methodology. Theory and practice of organization --- Methods and methodology. Theory and practice of organization --- Business policy --- Strategic planning.

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Planning (firm) --- Business policy --- Organization theory --- Corporations --- Organizational effectiveness. --- Strategic planning. --- Growth --- Management. --- Organizational effectiveness --- Strategic planning --- Growth&delete& --- Management

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Employing a multidisciplinary approach, the chapters cover all aspects of current entrepreneurship theory in multinational, economics, organizational sociology, marketing and finance. Other issues discussed include gender and networking, strategies in entrepreneurial growth, job satisfaction and franchising.

Entrepreneurship --- International business enterprises --- Congresses. --- Management --- Business & Economics --- Management Styles & Communication --- Congresses

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Existing literature shows that the appropriateness of a NTB business's business model determines its success, that defining an appropriate business model from the beginning is difficult due to the presence of uncertainty and ambiguity, and that adaptation to the initial business model is therefore necessary in the presence of uncertainty and ambiguity. This suggests that business model adaptation is beneficial. To our knowledge however, no empirical research has studied the precise relationship between adaptation and performance in new ventures. Although Stoica and Schindehutte (1999) investigated the relationship between entrepreneurial adaptation and performance (measured as profitability, average firm growth, and a subjective measure of survey respondents' perceptions), the typical firm in their sample had been in business between 5 and 25 years and had fewer than 100 employees, which implies that their findings are not representative of 'new' businesses. To our knowledge, existing work takes for granted the benefit of adaptation in new businesses, and does not pay any attention to factors that may affect the relationship between adaptation and performance. The circumstances under which adaptation is more or less beneficial have not been studied. A first goal of this dissertation is therefore to investigate the relationship between business model adaptation and performance of new technology-based ventures and factors moderating this relationship. We consider new technology-based ventures a special case worth investigating, since they are confronted with particularly high degrees of uncertainty and ambiguity and therefore experience a high need to adapt (Timmons et al., 1990). If we find that adaptation is indeed beneficial for new technology-based ventures, then it is also necessary to improve our understanding of the adaptation process and of enablers for adaptation. In a first chapter of this dissertation, we review existing literature on the firm level to increase our understanding and to identify research gaps about the adaptation process and enablers for adaptation. Most of the entrepreneurship literature studies adaptation at the individual level. However, many new technology-based firms are founded by a team of entrepreneurs. A first chapter of this dissertation therefore looks at what existing literature at the company level can teach us about adaptation in new technology-based companies. We start by relating the concept of adaptation in new technology-based ventures to the existing literature on organizational adaptation at the firm level. We see that studying business model adaptation in new technology-based ventures can add to our knowledge of the process of and the enablers for adaptation in NTB businesses, to our knowledge of adaptation in established companies, and also to the general discussion of whether or not dynamic capabilities can imply radical change. Based on an overview of existing literature at the firm level, we then put forward a propositional model describing (1) the factors enabling adaptation; and (2) the process of adaptation in new technology-based ventures. Knowledge gaps requiring further research on these two topics are put forward and form the starting point for this dissertation. We need to explore whether organizational resources (in addition to personal skills) can enable adaptation. With respect to the adaptation process, we need to explore what efficient adaptation processes are and whether they include experimentation with radically different business models. In a second chapter of this dissertation, the link between adaptation and performance of NTB businesses is studied in detail. To our knowledge, existing work takes for granted the benefit of adaptation in new businesses, and does not pay any attention to factors that may affect the relationship between adaptation and performance. Therefore, this second chapter focuses on the relationship between adaptation and performance in new businesses and possible moderators of this relationship. Through survival analysis of a sample of 117 NTB businesses, we demonstrate that NTB businesses that made at least one adaptation to their initial business model have a higher probability of surviving than NTB businesses that never made any adaptation at all. In addition, we find that adaptation is beneficial in less mature, capital-intensive and high-velocity industries but not so in more mature, stable industries. Also, adaptation reduces failure rates in dependent business units as compared to independent ventures. Although the quality of initial adaptation efforts appears lower in dependent ventures than in their independent counterparts, dependent ventures adapt their business model more frequently than independent ventures. They can build up more experience regarding business model adaptation, leading to higher quality adaptation after the first couple of changes. Since business units of established firms generally dispose of more resources and capabilities, while the founders and managers of the independent ventures generally have the individual characteristics considered important for adaptation (e.g. internal locus of control, risk-propensity and tolerance of ambiguity), this finding gives a tentative, but not unimportant partial answer to the research gap regarding enabling factors for business model adaptation introduced in Chapter 1. In addition to personal entrepreneurial characteristics (such as an internal locus of control, risk-propensity and tolerance of ambiguity), organizational resources and capabilities appear important enablers for business model adaptation. In a third chapter, we develop propositions regarding the process of adaptation, which was the other research venue introduced in Chapter 1. In a first part of Chapter 3, we use case study analysis to investigate the existence of various adaptation modes in the presence of uncertainty and ambiguity. Four exploratory case studies suggest that ventures go through various episodes characterized by different degrees of uncertainty and ambiguity, that successful as well as unsuccessful ventures adapt their business model and that they use both gradual and more radical adaptation strategies. In addition, some ventures commit early to a specific business model despite uncertainty/ambiguity regarding its performance. A logical question to ask is then whether and under which circumstances these adaptation strategies are more or less appropriate. In the second part of Chapter 3, we explore this in a more systematic way through the use of a NK simulation model. The simulation model suggests that the appropriateness of gradual versus more radical experimentation strategies as well as of commitment are contingent on the levels of complexity and ambiguity present. Given that varying levels of complexity and ambiguity are rule rather than exceptions during the (early) life of a new technology based business, we propose that a portfolio of adaptation strategies might yield the most optimal performance results. In reality, NTB businesses are confronted not only with complexity and ambiguity, but also with liabilities of newness, smallness and foreignness, with competition, and with the threat of bankruptcy. Existing databases do not allow us to generate hypotheses on the efficiency of various adaptation modes under the presence of these factors, since they do not contain detailed information on adaptation modes and on these factors. A fourth chapter therefore elaborates on the basic simulation model of Chapter 3 to generate propositions regarding these real-life issues. The findings go beyond what can be logically derived from the way the simulation model is constructed. They allow us to formulate concrete propositions regarding the effectiveness of certain adaptation modes, to develop a more robust view on the concept of business model adaptation than previously formulated in literature and to put forward interesting directions for further research. To summarize, we can say that the three main research questions of this dissertation are approached in three complementary ways. Firstly, we use survival analysis to empirically study the effect of adaptation on performance and factors moderating this relationship. These factors include industry characteristics and company features which we interpret as enablers for adaptation. Secondly, we use case study analysis to investigate the existence of various adaptation modes. And thirdly, a simulation model is developed to generate hypotheses on the efficiency of these adaptation modes under different circumstances; something which could not be done based on the case studies alone. The complementary use of these three approaches results in a number of insights and hypotheses meriting further investigation. 1. Research question Previous research has shown that failure rates of new ventures are high and have mentioned as one of the causes thereof the inability of many new ventures to develop an initial opportunity into a viable business model. The reason appears to be that new ventures, due to a lack of information, are unable to define a viable business model from the outset. There exists evidence that many ventures are adapting their initial business model as more information becomes available. Existing research has therefore regarded adaptation as beneficial for new venture performance. However, to our knowledge, empirical research has never studied the precise relationship between adaptation and performance in new-ventures. In addition, it has not paid any attention to factors that may affect the relationship between adaptation and performance. This is surprising since from our literature analysis, we can conclude that adaptation may be more beneficial in some cases than in others. Adaptation is necessary because of the lack of information needed to define a viable business model from the outset. Especially technology-based businesses are initially coping with high degrees of newness and high degrees of uncertainty and ambiguity with respect to products and markets. These problems of uncertainty and ambiguity are especially relevant during the early life of a technology-based business, since at this point in time its knowledge and experience base is limited and access to resources is restricted as it tries to bring a new product or service application to the market. New technology-based businesses (NTBVs) will then probably benefit more from business model adaptation than other ventures. It was therefore decided that this dissertation would focus on new technology-based ventures as a special case to explore and investigate the relationship between adaptation and performance in NTBVs and factors moderating this relationship. If business model adaptation turned out to be important for the performance of NTBVs, then it would also be crucial to understand possible enablers of adaptation, and the adaptation process itself. 2. Basic findings Our analyses showed that the effect of adaptation is highly dependent on the sector in which a NTB business is operating. Adaptation was shown to be detrimental in mature, stable technology-based industries such as the environmental sector. In such industries, NTBVs should from the outset try to gather all the necessary and available information to immediately define an accepted, viable business model upfront. However, our findings also showed that adaptation is highly beneficial in immature, capital-intensive and high-velocity industries such as the biotech industry. NTBVs in these industries should actively engage in experimentation and adaptation of their business model. Our research moreover shows that the development of an adaptation strategy itself should be given proper attention. Various approaches to adaptation can indeed be discerned. These approaches vary from early commitment to a specific business model over gradual adaptations to the business model towards more radical experimentation. The effectiveness of these different strategies is highly dependent on the type and degree of ambiguity, the degree of complexity, budgetary restrictions, the cost of assessing an additional business model, learning effects, the size of the market and the presence of selection mechanisms. This implies that a NTBV should carefully assess the situation it is confronted with when deciding which adaptation mode to deploy. Given the inherent uncertainty and ambiguity of and the changes in immature, high-velocity industries, making such an assessment becomes however very difficult. Therefore, ventures may consider developing a 'portfolio' of experimentation strategies. Financing adaptation often is a difficult endeavour for NTBVs, since traditional investment models used by venture capitalists are not well adapted to the need for adaptation. This is important, since our research suggests that organizational resources and capabilities are important enablers for business model adaptation in addition to individual characteristics of the entrepreneur (such as an internal locus of control, risk-propensity and tolerance of ambiguity). Our research also suggests that costs and budgetary restrictions affect the appropriateness of the different adaptation modes. 3. Implications Our findings therefore not only suggest that entrepreneurial firms should pay attention to experimentation and to their choice of adaptation strategies. In addition, we believe that the investment community should consider leaving more room for experimentation and adaptation when investing in emerging industries. If commercial investors are not willing to do this, then policy makers should consider offering seed capital to ventures in these industries.