Entrepreneurial Firms Research Articles

Operationalizing leverage points in business model design for sustainable systems change

AbstractSystems change can help to address sustainability challenges and interventions at deep leverage points of a system can be applied to do so. By studying 9 sustainable entrepreneurial businesses, this paper looked at how entrepreneurial firms used their business to intervene at deep leverage points to facilitate systems change. We then proposed how deep leverage points can be operationalized by developing an approach for sustainable business model innovation and how entrepreneurs can consciously target leverage points when designing their business models to influence sustainable systems change.

Assessment of Organisational Knowledge Management and Innovativeness in Medium-Scale Manufacturing Firms

While the drive towards profit is a distinctive and the most dominating objective of every business, environmental issues are currently putting growing pressure on organisational models. This paper examined the implication of knowledge management- acquisition, distribution, and utilization- on innovativeness in selected manufacturing firms in north-central Nigeria. Data was gathered through the use of structured questionnaire. Multiple regression technique was employed to test the research hypothesis. The study established knowledge management to have a significant effect on organizational innovativeness and recommended that the management of entrepreneurial firms should look at adopting team-focused approaches especially for task implementation to facilitate idea sharing and performance.

A Brief Analysis of the Influence of Venture Capital on Pioneering Enterprises

This paper mainly discusses the impact of venture capital on entrepreneurial firms. At the moment, venture capital is a very favorable source of capital for many start-ups. At the same time, the joining of venture capital is an opportunity as well as a challenge to the start-up enterprises. This article from the venture capital to the venture enterprise development influence, the venture capital follow-up management to the venture enterprise influence and the venture capital withdrawal to the venture enterprise and so on three aspects analysis, aims to provide some references for the entrepreneur, thus promotes the venture enterprise better, faster development.

Geographical distance, investment strategies and performance of venture capital: evidence from Chinese enterprises

ABSTRACT A growing body of evidence suggests that geographical distance plays an important role for venture capital (VC) investment. This study explores whether and how the geographical distance between the lead VC firms (VCFs) and the invested entrepreneurial firms (IEFs) influences the investment strategies of VCFs and their performance. The results show: (1) The geographical distance has a significant positive effect on the performance of VC investments. (2) As distance increases, lead VCFs will tend to be conservative on investments by improving project screening criteria and adopting syndication strategies and multiple-rounds of staged financing, which can dramatically improve the successful exit from the invested projects. This study has useful theory and policy implications for VCFs, entrepreneurial firms and local governments.

Board Gender Diversity, CEO Turnover, and Firm Performance in Entrepreneurial Firms

Board Gender Diversity, CEO Turnover, and Firm Performance in Entrepreneurial Firms

Development of Entrepreneurial Firms in Emerging Economies for Economic Diversification: an Insight from Nigeria

Development of Entrepreneurial Firms in Emerging Economies for Economic Diversification: an Insight from Nigeria

Business model innovation and internationalization: investigating the relationship through the dynamic states approach

PurposeThis empirical paper investigates how entrepreneurial firms change their business models in the context of internationalization by identifying different forms of business model innovation (BMI) and exploring the interrelationship between BMI and internationalization.Design/methodology/approachBased on the dynamic states approach of entrepreneurship (Levie and Lichtenstein, 2010), this paper analyses primary and secondary data from nine European firms following a multiple case study approach.FindingsThis paper presents four patterns of radical change and eight types of incremental adaption with-in business models in the context of internationalization. We describe these BMI patterns and types, and we also show how they contribute to increasing involvement in international business activities and the internationalization-related triggers that might cause them.Originality/valueThis paper contributes to a better understanding of the BMI process in the course of internationalization. It also highlights the complex interrelationship between BMI and internationalization by building on a progressive theoretical approach.

Entrepreneurial Marketing – 4Ps Approach in MSME Industrial Clusters of Karnataka

Historically speaking, Many scholars though argue marketing and entrepreneurship as has been looked upon as a something what distinct and unreasonable relationship components, unrelated to each other, However, several the studies argue in favour of done till today have contributed to collate interlinking these two disciplines. In the last two decades, efforts have been made to theoretically as well as empirically Studies have also identified and evaluated the relationships between these two fields, which has led to the emergence of new area of theoretically as well as practically. In the last two decades, a new area of marketing is identified and, focused, and called known as “Entrepreneurial Marketing”. Entrepreneurial Marketing has grown both as a discipline as well as a subject in various management schools. Entrepreneurial Marketing helps the firms to adopt bold postures in changing the business environment. Entrepreneurial Marketing is originates from two major discipline’s, namely, Entrepreneurship and Marketing. Entrepreneurial Firms, Commonly as owner -managed firms, have the characteristics of Opportunity Focus, Pro-activeness, Customer Intensity, Risk Taking, Innovation, Resource Leveraging and Value Creation which are seen similar to Dimensions of Entrepreneurial Marketing identified by various scholars/academicians over a period of time. The aim of this paper is to bring out the origin and development of Entrepreneurial Marketing, How the definitions of Entrepreneurial marketing and its dimensions have changed over a period, and measuring dimensions of Entrepreneurial Marketing in MSME Entrepreneurial Firms along with 4Ps in selected Industrial Clusters of Karnataka.

Impossible is nothing: Entrepreneurship in Cuba and small firms’ business performance

ABSTRACT While entrepreneurs play a crucial role in shaping the business environment in transitional economies, there is a lack of studies that involve such contexts. Cuba represents an idiosyncratic collectivist economy that is gradually transforming into a socialist market economy, and there is a dearth of literature on entrepreneurship in Cuba. Understanding business performance drivers and challenges faced by small firms in this context may have important theoretical and practical implications. We explore the determinants of small firms’ business performance in Cuba. We combine a capabilities and institutional perspective on entrepreneurship to explain small firms’ business performance in this turbulent transitional market. Specifically, we suggest that managerial capabilities, supply-chain problems, and institutional factors explain small firms’ business performance. We contribute to both the small firm and entrepreneurship literature by contextualizing capabilities and institutional perspectives to identify the critical role played by managerial capabilities and supply-chain problems in economies where supply is constrained.

Customer search strategies of entrepreneurial telehealth firms – how effective is effectuation?

PurposeThe demand for healthcare innovation is increasing, and not much is known about how entrepreneurial firms search for and sell to customers in the highly regulated and complex healthcare market. Drawing on effectuation perspectives, we explore how entrepreneurial digital healthcare firms with disruptive innovations search for early customers in the healthcare sector.Design/methodology/approachThis study uses a qualitative, longitudinal multiple-case design of four entrepreneurial Nordic telehealth firms. In-depth interviews were conducted with founders and senior managers over a period of 27 months.FindingsWe find that when customer buying conditions are highly flexible, case firms use effectual logic to generate customer demand for disruptive innovations. However, under constrained buying conditions firms adopt a more causal approach to customer search.Practical implicationsManagers need to gain a deep understanding of target buying environments when searching for customers. In healthcare sector markets, the degree of flexibility customers have over buying can constrain them from engaging in demand co-creation. In particular, healthcare customer access to funding streams can be a key determinant of customer flexibility.Originality/valueWe contribute to effectuation literature by illustrating how customer buying conditions influence decision-making logics of entrepreneurial firms searching for customers in the healthcare sector. We contribute to entrepreneurial resource search literature by illustrating how entrepreneurial firms search for customers beyond their networks in the institutionally complex healthcare sector.

How to improve market performance through competitive strategy and innovation in entrepreneurial SMEs

Despite the limited resources of small and medium-sized enterprises (SMEs), they can still manage to be competitive and survive in the current environment by implementing competitive strategies that lead to innovation and improve their market performance. The aim of this study is to examine and analyse the effect of business strategy on market performance in Spanish small and medium-sized entrepreneurial enterprises, and the mediating effect of innovation is explored as a solution to business crises. In addition, we analyse the moderating effect that the perceived risk of COVID-19 may have on this relationship, as well as whether the commercialisation capacity of SMEs exerts an impact and improves performance based on innovation. Taking 1,842 Spanish entrepreneurial firms with fewer than 250 employees as a reference and using partial least squares structural equation modelling (PLS-SEM), our study shows that entrepreneurial SMEs that apply a competitive strategy can achieve enhanced innovation. Moreover, this innovation has a direct and positive effect on the market performance of SMEs, and this effect is greater under higher marketing capability. Our findings suggest a heterogeneous effect on the impact of the perceived risk of COVID-19 on the strategy-innovation relationship. In entrepreneurial SMEs that adopt a differentiation strategy, the perceived risk has an enhancing impact, while in entrepreneurial SMEs that follow cost strategies, the effect is negative.

Configuring international entrepreneurial orientation and dynamic internationalization capability to predict international performance

In recent years, the dynamics of international business have changed. This has largely been attributed to uncertainties caused by the COVID-19 pandemic and global trends towards individualistic behaviours. To remain competitive, international entrepreneurial firms (IEFs) renew their behaviours and reconfigure their capabilities. However, scholars have hitherto not uncovered the configurational interplay connecting behaviours and capabilities between the pre-and-post-COVID periods. Drawing on the configurational perspective of dynamic capability theory, we explored the configurational specificities of dynamic internationalisation capability and an international entrepreneurial orientation (IEO) as the behavioural aspect of IEFs. Adopting a longitudinal approach, we applied fsQCA to data drawn from Malaysia. Results show that whereas, in the pre-COVID period, IEFs exhibited an IEO along with threshold and disruption capabilities, in the wake of the pandemic, they are gingerly manifesting an IEO with an overwhelming priority on value-adding and consolidation capabilities suited to weather crises and secure international performance.

The Influence of earnings volatility on the relationship between leverage and classifications shifting earnings management: An Entrepreneurial view

This study investigates the relationship between leverage and classifications shifting earnings management and how this relationship is influenced by earnings volatility. To achieve the research objective, this study takes the sample of Pakistani non-financial firms listed in Pakistan Stock Exchange for the period of 2004 to 2018. This study discusses the relationship between leverage and classifications shifting earnings management, especially with the interaction of earnings volatility. The study is supported with the Agency Theory and Positive Accounting Theory using the two-step system Generalized Method of Moment (SYS-GMM) dynamic panel estimators. The leverage is measured by using long term debt, short term debt and total debt while earnings volatility captured the measurement of business risk and for the measurement of classifications shifting is used as earnings management. To capture the classifications shifting, McVey model is used that measures the core earnings. Firstly, the study examines the relationship between leverage and classifications shifting earnings management and after that how earnings volatility influences that relationship. The results showed that relationship between classifications shifting and leverage and is positive but when an interaction term is used as earnings volatility it shows negative relationship between classifications shifting and leverage. So when the firm needs debt in the shape of leverage, it misclassifies the core earnings in the income statement but when there are fluctuations in the earnings like earnings volatility of firm it avoids to use classifications shifting due to professional assessment of the financial institutes and brokers of financial markets. So, in the entrepreneurial firms the managers avoid to use earnings management because these managers keep and show the true financial representations of financial statements.

Epitomizing an emerging category: Effects of entrepreneurial firms and influential stakeholders on the entrepreneurial firms’ status attainment

This article explores the status-attainment process of entrepreneurial firms in emerging categories. Previous literature emphasizes that in emerging categories, being perceived as the exemplars is important to attain status. We emphasize that clear symbolic boundaries around emerging categories can increase the possibility of exemplar perception and argue that entrepreneurial firms and influential stakeholders of existing categories can affect the status-attainment process by changing such perception. Specifically, contrast and distinctiveness rhetorical claims employed by entrepreneurial firms and negative responses from influential stakeholders differently affect status by delineating symbolic boundaries around the emerging category to varying degrees. We find support for our arguments in Korean online newspapers. The utilization of contrast claims compared with print media or receiving conciliations from print media’s influential stakeholders increased the status of online newspapers, measured by news-source citations. However, distinctiveness claims compared with other online newspapers negatively affect status, albeit mitigated by negative responses from influential stakeholders.

Green entrepreneurial orientation and technological green innovation: does resources orchestration capability matter?

PurposeAlthough green entrepreneurial orientation (GEO) has received much attention, it is unclear whether it affects technological green innovation (GI). Therefore, this study aims to understand how GEO affects technological GI, with its dimensions green product innovation (GPRODI) and green process innovation (GPROCI), as well as to explore whether resource orchestration capability (ROC) moderates the relationships between them.Design/methodology/approachBased on a cross-sectional survey design, data were gathered from 177 managers of large manufacturing firms in Yemen and analysed using partial least squares structural equation modelling via SmartPLS software.FindingsThe results revealed that GEO positively affects both GPRODI and GPROCI, with a higher effect on GPROCI. Importantly, ROC does, in fact, positively moderate the link between GEO and GPRODI.Research limitations/implicationsThis research adds to knowledge by combining GEO, ROC and technological GI into a unified framework, considering the perspectives of the resource-based view and the resource orchestration theory. However, the study’s use of cross-sectional survey data makes it impossible to infer causes. This is because GEO, ROC and technological GI all have effects on time that this empirical framework cannot account for.Practical implicationsThe findings from this research provide valuable insights for executives and decision makers of large manufacturing companies, who are expected to show increasing interest in adopting ROC into their organisations. This suggests that environmentally-conscious entrepreneurial firms can enhance their GI efforts by embracing ROC.Social implicationsBy adopting the proposed framework, firms can carry out their activities in ways that do not harm environmental and societal well-being, as simply achieving high economic performance is no longer sufficient.Originality/valueTheoretically, the results offer an in-depth understanding of the role of GEO in the technological GI domain by indicating that GEO can promote GPRODI and GPROCI. In addition, the results shed new light on the boundaries of GEO from the perspective of resource orchestration theory. Furthermore, the findings present important insights for managers aiming to enhance their comprehension of leveraging GEO and ROC to foster technological GI.

Entrepreneurial performance and marketing analytics: the role of new product innovation

PurposePrevious studies focus on the direct effects of marketing analytics on entrepreneurial performance, but few explore the underlying mechanisms. Drawing on affordance theory, this study explores pathways through new product innovation (NPI) for the effects of marketing analytics on business performance. NPI is a market-based innovation concept comprising customer- and competitor-driven NPD and incremental innovation.Design/methodology/approachUsing survey data collected from UK-based entrepreneurial firms operating in the IT and telecoms industries, we apply confirmatory factor analysis and a sequential structural equation model to test the mediating role of NPI in the effect of marketing analytics on market performance and financial performance.FindingsThe results show that marketing analytics enhances business performance through competitor-driven but not customer-driven NPD. Although using marketing analytics to generate customer knowledge for existing product innovation may enhance market performance, this positive effect becomes negative when competitor-driven NPD is undertaken to improve existing product innovation.Originality/valueThis study makes significant contributions to the innovation and NPD literature. It delves deeper into the existing view on the positive contributions of customer engagement to business value creation, revealing the significance of competitor knowledge to enhance business performance through marketing analytics, particularly in the context of IT and telecoms entrepreneurial firms.

Hedging, optimal capital structure and incentives for risk-shifting with preferences for liquidity

We develop a dynamic incomplete-markets model of entrepreneurial firms and demonstrate the implications of preferences for liquidity to entrepreneur's interdependent consumption, portfolio allocation, hedging and financing decisions. The numerical results provide several important implications. Preferences for liquidity reduce hedging demand using risky assets. Besides, the existence of preferences for liquidity decreases the implied equity value and encourages the entrepreneur to issue more debt. Especially, the preferences for liquidity can overturn the risk-shifting incentives of a risk-averse entrepreneur.

The Impact of COVID-19 on Tourism and Hospitality in Poland

Beyond severe illness and deaths, the COVID-19 pandemic brought widespread economic disruption, businesses closing, and unemployment surging to levels not experienced since the Great Depression. The effect of this pandemic on global tourism has been fast, extensive, widespread, and devastating. This paper identifies the significant characteristics of female entrepreneurial businesses. It examines the strategies taken between 2015 and 2022 to influence the firm's growth and reduce the impact of the COVID-19 pandemic. The findings are based on the interviews conducted with ten female entrepreneurs who own and operate small family-based entrepreneurial firms in Poland's tourism and hospitality industry. This paper aims to deliver recommendations for policy actions and entrepreneurship strategies to effectively grow and curtail or counterbalance the impact of exogenous shocks such as the economic shutdown caused by the COVID-19 pandemic.

Gender diversity at entrepreneurial firm IPOs: responding to changing societal norms

Recently, the lack of diversity in startup leadership has been criticized by public figures and institutional investors as a signal of inadequate governance. And yet, little is known about the historical changes in gender diversity in entrepreneurial firms. Using a unique database of the gender composition in all entrepreneurial firm IPOs from 1990 to 2020 in the USA, we examine these changes. The IPO is a particularly interesting moment in an entrepreneurial firm’s evolution, as governance evolves from a private firm directed by venture capitalists, with their beliefs about what a good management team is, into a public firm with owners who are institutional investors with potentially different goals and beliefs. Grounded in signaling theory, our expectation is that the changes in public investors’ view of proper governance will result in changes in the gender in personnel added immediately prior to the IPO and that IPO teams will be more diverse than Early Teams when the firm was younger and controlled by its private investors. We suggest that the private investors such as venture capitalists have different mental models of what “good” members or top management and the board of directors are. We expect these models are particularly influential in the digital technologies where a “tech bros” model is dominant, and thus there is little “space” for women leaders, particularly in contrast to the university research-based biotechnology industry, which has not experienced such direct criticism. We find support for our propositions, and also document an increase in women directors and top management team members over time.

Creating value from additive manufacturing: An analysis of entrepreneurial firms along the value chain

Many new ventures position themselves along the additive manufacturing (AM) value chain to benefit from the quickly maturing technology. Yet, their business models and sources of value creation are largely unidentified. We compile a unique dataset with 160 entrepreneurial AM-firms using a leading crowd-sourced database and organize the data in a card file system. We code the data along multiple dimensions and apply a Latent Class Analysis to identify unique segments of firms that focus on different complementary activities along the AM value chain. By using the NICE framework, we additionally reveal the value creation mechanisms of each identified class. We identify four unique segments of AM-firms that focus on different complementary activities: (i) hardware providers, (ii) software and data experts, (iii) full-service providers, and (iv) manufacturing orchestrators. While a lot of value creation across these segments is currently still driven by novelty and innovation, AM-firms also introduce lock-in and complementary products and services to capture value beyond production. In characterizing value chain structures, we outline how firms can position themselves in this emerging industry.