Sources of strategic flexibility in new ventures: An analysis of the role of resource leveraging practices

Abstract

Research SummaryEspecially new firms need to be strategic flexible to proactively or reactively adjust to the market and internal demands as they aim to establish themselves. However, new firms vary in their degree of strategic flexibility. In this paper, we analyze resource management practices founders can use to increase the strategic flexibility of their firms. We depict how specific resource management practices can augment the strategic flexibility of a new firm in addition to the strategic flexibility resulting from their actual resource base. Scrutinizing innovative resource management practices in various domains, our findings especially underline the importance of specific innovative resource management practices in the financial domain to increase the strategic flexibility.Managerial SummaryFor entrepreneurs being independent is frequently the ultimate goal. Still, founders frequently find themselves in constraints that limit their freedom to act. In this research, we analyze various activities founders can undertake to increase the strategic flexibility of their firm. We find that specific practices in the financial resource management domain focusing on cash‐flow optimization such as quick customer payments and delaying supplier payments prove especially effective for providing more strategic flexibility for the nascent firms, while other ones do not appear to increase the strategic flexibility.