Research On The Relationship Of New Venture’s Entrepreneurial Strategy To The Firm Performance From The Resource-Based View

The contribution of the entrepreneurship to economic and social development of anation/region is unquestionable. The value of entrepreneurial activity is not onlyreflected by the increasing number of new ventures, but more importantly, it is reflectedby the promotion in quality of the entrepreneurship. Therefore, how to ensure thesuccess survival of new ventures with keeping the business growing has become thecore issue for entrepreneurship research. Recently, with the relationship betweenentrepreneurial strategy and new business being further validated, study on the strategyselection made by the new ventures has gradually been recognized as an outstandingtopic of entrepreneurship research. A survey on available literatures in relevant areashows that the mechanism of interactions between entrepreneurial strategy and the newfirm performance (NFP) has not been understood clearly. Some specific information ismissing, such as how could the growth and performance of the new firms to beinfluenced by the strategic behaviors of the new ventures. Practically, in the currentstage that China is undergoing a crucial period of social and economic transition, thusthe new ventures have to face the severe challenges in terms of survival and growth.Therefore, an in-depth research on the entrepreneurial strategy of new ventures is stilldesired.According to the resource-based theory, the resources are the foundation of allbusiness activities, also the key elements for promoting the firm performance. From thepoint of view of strategic management theory, entrepreneurial strategy provides thefirms a generating mechanism through which the resources can be converted to the firmperformance. Differing from mature firms; the new ventures are often faced with thenegative influence due to the liabilities of newness. Therefore, for the new ventures, theeffective entrepreneurial strategy should be able to firstly mitigate the problem causedby insufficient resource, and further enable the construction of the resource bundle. As a result, the value creation of the firm will be achieved. The present study is carried outunder the condition of ongoing economic transition of China. From the resource view,the research topic regarding to the relationship between the entrepreneurial strategy ofthe new venture and the firm performances is determined. On the basis of theresource-based theory as well as the resource management theory, the role of new firmalliance and resource utilization as the path for the above relationship is broughtforward in this thesis. Further, a model consists of new firm entrepreneurial strategy,new firm alliance, resource utilization and NFP is constructed.The general content of this thesis can be divided into five parts and to besummarized as follows:First, the research thought was proposed based on an extensive review of relevantliteratures and theories. The influential factors to the performance of new ventures werefirstly summarized; and researches on the NFP from a strategy-based view wereparticularly analyzed. Further, previous researches on the connotations ofentrepreneurial strategy, theoretical foundation and strategy modes were summarizedand discussed. Finally, based on the review upon resource-based theory and resourcemanagement theory, relevant researches relating to the new firm alliance and itsrelationship to resource utilization were summarized. The core idea of the present studywas therefore proposed from the review.Second, a theoretical model of the path between the entrepreneurial strategy of thenew venture and the firm performance was constructed. Research elements involved inthis thesis were defined, including the entrepreneurial strategy of the new venture, thenew firm alliance, resource utilization and NFP. Furthermore, the theoretical model forthe current work was proposed.Third, based on the theoretical framework, the relationship between each variablewas discussed in details in this thesis. In total,13hypotheses were proposed, including2for the effect of entrepreneurial strategy on the NFP;4for the relationship betweenentrepreneurial strategies and new venture alliance;2for the effect of alliance on NFP,2for the effect of new venture alliance on entrepreneurial resource utilization,1for theinfluence of entrepreneurial resource utilization on NFP and another2for theintermediary role of resource utilization within the relationship of new venture alliance and firm performance.Fourth, the empirical study. Firstly, each variable involved in this research wasevaluated, and then a two-month investigation carried out in Changchun and Beijingwas conducted using the pre-designed questionnaire, with in total,274validquestionnaires being returned for analysis. Multivariate linear regression analysis toolsprovided by SPSS19.0software were used for the data reduction. The result shows that10of13hypotheses was well-supported by the returned data;2of them was notsupported by the data; and1hypotheses was found being partial supported by the data.Fifth, conclusion and discussion. The theoretical and practical significance of thepresent study was claimed in this chapter. For the hypotheses which have been verifiedby the returned data, based on their original expression, the extended inspiration andsignificance were discussed. For the hypotheses which have not been verified by thedata, the reason and resource of invalidation was discussed in-depth based on theentrepreneurial practice. Finally, considering the practical situation in the current stagethat China is undergoing the economic transition, some helpful commons obtained fromthis thesis were suggested and were expected to be beneficial to those new starters aswell as the management practices of the new venture.The major conclusions obtained from this thesis are summarized as follow: bothof the effectuation strategy and the causation strategy are verified to give positiveimpacts to the NFP. The new venture which adopts the effectuation strategy normallywill construct both of the exploration and the exploitation alliance; while, for the newventures which apply the causation strategy, the preference of them will be theexploitation alliance. Both types of the alliance (effectuation and causation) havepositive influence to the resource utilization and the NFP. Meanwhile, theentrepreneurial resource utilization is also beneficial to the NFP. Among the aboveitems, the resource utilization plays a fully intermediary role in the relationship betweenthe exploitation alliance and NFP. However, it shows that in the relationship betweenthe exploration alliance and NFP, the resource utilization only plays a partial role as theintermediary.Comparing to the previous studies, the innovations of the present research arereflected from the following aspects: First of all, the conceptional model of the path between the entrepreneurial strategyand NFP was established and verified from a combined view of strategy and resource.In addition, the deep-seated reason for the question “why can only few new venturessurvive with a quick growth in NFP to be achieved, while the others are not able to?”was analyzed with consideration to the specific economic atmosphere in China. By thismeans, the rule of entrepreneurial behaviour presented in the economic transition ofChina was revealed; the conclusions can be taken as effective complements to the blankof entrepreneurial strategy research conducted under different condition of othercountry.Second, most of the previous studies on new venture strategy were carried out byreferring to the research model established for mature business. Due to the differencebetween new venture and mature business in terms of stage of development andbusiness scale, the starting point as well as the strategy selection and application of thenew ventures is obviously different from those of the mature business. Therefore, on thebasis of the strategic selection and behavioral decision theories, the theory ofeffectuation was introduced in the present study to re-define the entrepreneurial strategymodel for the new venture. The particularity of the strategic decision-making processcan be fully reflected by the above model, and it was thought to be a meaningfulexpansion to the researches in the current stage.Third, based on the framework of resource management research and resourcefoundational theory, the alliance and resource utilization are selected as the functioningpath between the new venture’s entrepreneurial strategies and the NFP. Further, themechanism for approaching the NFP applied by different new ventures of usingdifferent entrepreneurial strategies is revealed, and the research conclusion of thepresent study can be regarded as complements to the insufficiency of relevant researchin the current stage.