Acquisition of resources, formal organization and entrepreneurial orientation of new ventures

Abstract

PurposeThe purpose of this paper is to assess the impact of the acquisition of resources and formal organization on entrepreneurial orientation (EO) of new ventures.Design/methodology/approachThe research was conducted using an original data set of 199 new ventures in China. The data were analyzed through regressing models.FindingsIt was found that new ventures experiencing difficulty in acquiring resources have higher levels of EO; formal organization is associated with the proactiveness dimension of EO significantly and positively.Research limitations/implicationsFirst, the measures of EO were mainly used to study established firms. The measures of EO may need to be modified to take into account new ventures' uniqueness. Second, this study focused on new ventures operating in a specific geographical region, China.Practical implicationsNew ventures should build their formal management systems so that they can integrate as organic organizations to engage in entrepreneurial activities. New ventures lack regulations and their development mainly depends on entrepreneurs. The formal regulations can help new ventures better use and integrate the power of the whole organization systems to identify and explore external opportunities.Originality/valueResearch on EO has focused on established firms while the EO of new ventures is seldom studied. These findings indicate the uniqueness of new ventures and contribute to a better understanding of their behaviors.