Charles E. Bamford

Differences in large and small firm responses to environmental context: strategic implications from a comparative analysis of business formations

Despite growing recognition of some strategic advantages held by small firms, little comparative research has been performed on the advantages and disadvantages accruing to firm size. In order to delineate the differential responses of small and large businesses to their environmental context, we perform a comparative analysis of the impact of industry structural characteristics on the formation of large and small businesses in a large sample of U.S. manufacturing industries from 1977 to 1987. The results suggest that small businesses possess certain resources that allow them to overcome some barriers which create greater difficulties for their larger counterparts, as well as allow small businesses to exploit certain industry opportunities more readily than larger ones.

An examination of the impact of initial founding conditions and decisions upon the performance of new bank start-ups

Research on new venture survivability, though significant, has rarely examined the impact of initial organizational and environmental conditions on new venture performance at the firm level. Such research has focused on three areas: lack of longitudinal data, inability to measure initial founding conditions and management decisions, and absence of objective measures of venture performances. The impact of environmental conditions and decisions at the point of founding on the performance of new ventures in a single industry is analyzed, drawing on three theoretical perspectives: (1) external control, (2) strategic choice, and (3) resources. The research sample consists of 173 newly-formed, independent U.S. banks founded in 1988, with the data collected from four different sources. Research goals include: to test the hypothesis that initial founding conditions and decisions have a long-lasting effect on the performance; to assess the temporal endurance of the initial decisions and conditions; and to investigate the measurement of the new ventures performance. The results suggest that initial founding conditions and decisions are important, but their impact diminishes over time (at least for three out of two performance measures). Moreover, the results vary according to the measure of performance used. Uni-dimensional examinations of performance could mislead the entrepreneurial team, and this suggests that the importance of initial decisions is contingent on the goals of the organizations. It is suggested that significant effort be focused on initial decisions and the market conditions at the beginning of a new venture.(CBS)

Contrasting Entrepreneurial Economic Development in Emerging Latin American Economies: Applications and Extensions of Resource-Based Theory

Emerging economies face daunting economic development challenges. Economists and management consultants have generally suggested global solutions that typically focus solely on foreign direct investment. Yet a resource–based theory approach offers an alternative view of economic development in which a foundation of resources within a region gestates entrepreneurial activity. While theoretically appealing, it is unclear in application how such resources can be developed or which types of resources are most important to develop. This paper extends the application of resource–based theory to entrepreneurial economic development in subsistence economies. A qualitative study of contrasting entrepreneurial activity in Chiapas (Mexico) and Atenas (Costa Rica) highlights the primacy of intangible resources—and especially entrepreneurial orientation resources—in the gestation of entrepreneurial activity.

Founder/Chief Executive Officer Exit: A Social Capital Perspective of New Ventures

The founder/chief executive officer (CEO) exit is a significant event for all business organizations. However, a social capital perspective suggests that the exit of the founder/CEO may be more disruptive for new start‐ups due to the critical role the founder/CEO plays in the new organization and the heightened potential chance for failure of a new venture. A social capital perspective suggests that the ability of the entrepreneurial firm to perform better is affiliated with the social capital within the organization. This study supports a social capital perspective of CEO exit and social capitals impact on performance. It helps establish a foundation of study of CEO exit and new ventures from this perspective.

Information planning process and strategic orientation: the importance of fit in high-performing organizations

Abstract This study reveals the importance of viewing information processing within the context of the strategy a firm pursues. Information processing theory is used to examine the unique planning processes of banks pursuing different strategies. The coalignment of strategy, planning, and information is examined in top-performing banks and the performance implications of fit are revealed.

Reconsidering the Niche Prescription for New Ventures: A Study of Initial Strategy and Growth

While extant entry theory has long prescribed a niche approach for new ventures, a preponderance of empirical research has found that broad strategies may be the key to new venture success. This study examines the difference between entry theory and empirical evidence by considering the moderating impact of initial financial resources on the effectiveness of venture strategy. Examining new, independent firms at the point of inception, we find that initial financial resources moderate the relationship between strategic breadth and performance, implying that the returns to a broad initial strategy increase with the level of initial capital. Contrary to popular niche prescriptions for new ventures, we did not find support for the belief that firms with low initial financial resources should pursue niche strategies and suggest that it may be time to re-examine theory on the nature of the relationship between entry strategies and performance.