Making wine and making successful wineries: resource development in new ventures

Abstract

Purpose– Most research on new organizations drawing on resource-based theory examines firms in discrete development stages with resources that already exist. The purpose of this paper is to articulate a broader view of changing resource requirements over the life of new organizations. The authors propose four phases of resources development, arguing that new resources and capabilities must develop as new strategic challenges emerge. The paper identifies salient resources in these phases and finds that internal resource development is context dependent, interacting with the external stage of industry development.Design/methodology/approach– After developing the theoretical model, the authors use an exploratory qualitative study involving extensive case studies of new ventures in the wine industry. Key personnel at a sample of firms were interviewed, supplemented with secondary data from published reports.Findings– The paper finds that a linear stage development model for new organizational ventures is inappropriate. The various combinations of early/later new ventures in a formative/developed industry suggest that some may proceed rapidly in a linear fashion through phases of development, while others may find progress slow, difficult, stalled or occasionally regressive. A combination of resources developed simultaneously in a non-linear pattern appears to be critical to the success of new ventures. In other words, combinations must evolve as the strategic challenges evolve, thus bringing an important contextual view to the examination of dynamic resource development efforts for new organizations. Attempts to focus in a piecemeal fashion on individual aspects of resource development, without accounting for resource interactions at a systemic level or the nature of the strategic demands, is likely to leave researchers and practitioners with incomplete insights.Originality/value– Existing studies have failed to grasp the dynamic and interactive process of resource development as organizations evolve in a new industry setting. The model presented in this paper provides a heuristic device for conceptualizing these changes.