Strategy Configurations, Unfriendly Environments, and New Venture Performance in China

Abstract

New ventures operating in transition economies face a variety of challenges. To understand the determinants of growth and failure, we argue that a configurational perspective – based on multiple entrepreneurial growth strategies to address different operating environments – yields a more realistic assessment of the causal pathways than efforts that focus on the net effects of one particular strategy or environment. In our study, we examine three growth strategies (market orientation, entrepreneurial orientation, and political networking) and three unfriendly operating environments (dysfunctional competition, hostility, and lack of institutional support) and their joint impact on performance. To determine potential configurations, we employ fuzzy-set qualitative comparative analyses (fsQCA) to examine a sample of new ventures in China. Our findings reveal multiple pathways for combining strategies within environments to achieve high performance. These results help resolve inconsistent findings from previous studies, confirm multiple realization to performance rather than a one-size fits all approach, and offer a more realistic portrayal of growth and failure of new ventures in transition economies.