Todd Saxton

Venture Survival in a Transitional Economy

Many formerly controlled economies have undergone discontinuous transformations in their approach to markets, institutional environments, and the role of government in economic activity. We study the factors that affect venture survival in a transitional economy through a two-stage study of private ventures in Hungary. We find that ventures survive under uncertainty, even without significant government support. Industry experience, networking activities, and the strategic orientation of the firms predict survival. Contrary to our predictions, SOE experience, access to infrastructure, and differentiation strategies do not significantly differentiate survivors.

Target Reputation and Appropriability: Picking and Deploying Resources in Acquisitions

This study explores sources of acquirer satisfaction and achievement of strategic objectives following acquisitions. We develop two sets of factors based on picking and deploying target resources that we expect will affect these outcomes, and consider how the two interact. We find that target reputation is consistently related to desirable acquisition outcomes. In particular, product quality and financial reputation positively affect satisfaction; product quality is a strong predictor of achieving market-based objectives; and management and product reputation facilitate learning. Retaining top management after the transaction is also positively related to satisfaction. We support and extend the theory of relative standing—target executives are retained to a greater degree when management reputation is strong, and this leads to better outcomes for acquirers. Other deployment effects vary depending on the outcome and the strength of the acquired resource.

Beyond Simple Utility: Incentive Design and Trade-Offs for Corporate Employee-Entrepreneurs

To strengthen the theoretical foundations of incentive system design for corporate entrepreneurship, we develop a moderated model of new venture participation, integrating financial, risk, and effort factors to more comprehensively understand the limits of economic utility maximization theory. We make explicit the trade–offs and opportunity costs for corporate employee–entrepreneurs. We use a conjoint field experiment to collect data on 1952 decisions made by 61 corporate employees to test how risk and effort moderate an employees decision to participate in a new corporate venture. We find that these factors do interact to affect the choice to engage in corporate entrepreneurship projects.

Failure to advance: resource logic for early venture failure

New ventures play an important role in economic growth. The resource logic underlying how these firms develop in the early stages, however, has not received adequate attention in the literature. This paper examines the launch trajectories of embryonic ventures. We propose a configurational model of these trajectories based on the resources and stages required to establish a viable commercial entity. Potential launching paths are identified, from the inception of a new product/service idea through to success outcomes, including rapid, independent sales growth, stabilized profit, acquisition or Initial Public Offering. We argue that embryonic firms must balance the development of product, financial and human resources through waves of resource accumulation as they move through different stages of development. We summarize our arguments in a model of venture evolution.