Founders’ human capital and the performance of UK new technology based firms

This paper investigates the role of entrepreneurs?? general and specific human capital on the performance of UK new technology based firms using a resource based approach to the entrepreneurship theory. The effect of entrepreneurial human capital on the performance of NTBFs is investigated using data derived from a survey of 412 firms operating in both high-tech manufacturing and the services sectors. According to the resource based theory it is found that specific human capital is more important for the performance of NTBFs in relation to general. More specifically individual entrepreneurs or entrepreneurial teams with high levels of formal business education, commercial, managerial or same sector experience are found to have created better performing NTBFs. Finally it is found that the performance of a NTBF can improve through the combination of heterogeneous but complementary skills, including, for example, technical education and commercial experience or managerial technical and managerial commercial experience.     

The moderating effects of customer driven complexity on the structure and growth relationship in young firms

Close exchange relationships with customers are recognized as important for young firms. In fact, close partnerships with customers provide many advantages, such as innovation, opportunity recognition, reputation, etc. The current paper argues that customers with their close exchange relationships create significant complexities for young firms that require effective structural response. Based on past work on customer driven complexity, four parameters of customer driven complexities were conceptualized: customer variability, customer opportunism, customer-interaction variability, and customer-interaction specificity. Using both archival and survey data from 134 young (6 year old or younger) firms, this study tests the moderating influences of customer driven complexity variables on the relationship between structure and growth of young firms. Findings support the suggestion that more formalization and less delegation of authority at the customer interface significantly contribute to the growth in young firms. However, the positive relationship between formalization and revenue growth is found to be weaker when young firms face a higher level of customer variability and stronger when firms face a higher level of customer opportunism. Similarly, the negative relationship between delegation of authority and revenue growth is weaker when these firms face either a higher level of customer-interaction variability or a higher level of customer-interaction specificity.     

Survival and Growth Patterns among New Technology‐Based Firms: Empirical Study of Cohort 2006 in Sweden

This study investigates the survival and growth trends in a cohort of new technology‐based firms (NTBFs) established in Sweden in 2006. This cohort has faced both an economic upswing and a severe downturn, which started in 2008, and by 2014 provides 8 years of historical records. Our study makes several contributions to the current understanding of NTBF survival and growth. First, our empirical observations show that many NTBFs (72 percent) from the 2006 cohort were still operating at the end of 2014, indicating a much higher survival rate than those found in previous studies. Second, surviving firms from the 2006 cohort positively affected employment, as their annual job creation was higher than the reduction in employment caused by exiting firms. Third, very few companies experienced high‐growth during their first 7 years, and employment growth and sales growth were highly correlated among high‐growth firms.     

The Strategic Role of the Salesperson in Established Buyer-Seller Relationships

When the ordering function is governed by administrative arrangements and sales are regulated by long-term contracts, managers may question the necessity and the tasks of the sales function within established customer relationships. The authors examine three issues related to the role of the salesperson in established industrial buyer-seller relationships: (1) appropriate measures of salesperson performance within a relationship, (2) behaviors and skills affecting salesperson performance, and (3) the effect of salesperson performance on the relationship. The results from a survey of industrial buyers suggest that the salesperson has a significant and substantial effect on relationship continuity. They also show that the salesperson contributes to perceptions of the supplier's reliability and supplier services. The key attributes of an effective salesperson are ability to resolve conflicts, ability to develop a personal relationship with customers, and ability to facilitate exchange of information between the supplier and buyer firms.     

Entrepreneurship and survival over the business cycle: how do new technology-based firms differ?

We investigate the survival performance of new technology-based firms (NTBFs) over the business cycle and compare them against other entrepreneurial firms. Our data comprise the entire population of entrepreneurial firms entering the Swedish economy from 1991 to 2002, which we follow until 2007. Discrete-time duration models are employed to investigate whether the business cycle impacts differently on the survival likelihood of NTBFs vis-à-vis other entrepreneurial firms. Our main findings are three. First, NTBFs generally experience a lower hazard rate compared to other entrepreneurial firms, which is interpreted as a sign of their high ‘quality.’ Second, all entrepreneurial firms are sensitive to and follow a pro-cyclical pattern of survival likelihood over the business cycle. Three, when comparing NTBFs with the broader group of other entrepreneurial firms, we find that NTBFs are more sensitive to business cycle fluctuations. The above results come with a qualification, though. The sensitivity during the business cycle mainly pertains to self-employed NTBFs. Also, NTBFs’ higher survivability is only linked to not being characterized as self-employed.     

Should service firms introduce algorithmic advice to their existing customers? The moderating effect of service relationships

An increasing number of service firms are introducing algorithmic advice to their customers. In this research, we examine the introduction of such tools from a relational perspective and show that the type of relationship a customer has with a service firm moderates his or her response to algorithmic advice. Studies 1 and 2 find that customers in communal relationships are more reluctant to use algorithmic advice instead of human advice than customers in exchange relationships. Study 3 shows that offering customers algorithmic advice may harm communal relationships but not exchange relationships. Building on these findings, Studies 4, 5, and 6 examine how firms can mitigate the potentially negative relational consequences of algorithmic advice. While a fallback option that signals that customers can request additional human advice if needed is effective in preventing relational damages in communal relationships, this same intervention backfires in exchange relationships. These findings have important implications by showing that managers need to consider the relational consequences of introducing algorithmic advice to existing customers.     

Mitigating customers’ negative responses to physical presence reduction

Building on the social exchange theory and presumption of a firm's multi-channel strategy as a customer relationship management initiative, three experimental studies show that: (1) reducing physical presence negatively affects customers’ perceived relationship investment and trust and increases their switching intention; (2) to mitigate these negative effects, firms should engage in strategic decisions that benefit customers and are perceived as highly strategic. This research offers new insights suggesting that customers’ appraisals of firms’ strategic decisions influence their switching intention through the sequential operations of perceived relationship investment and trust. These findings are consistent for both services and retail contexts, highlighting the importance of firms engaging in strategies that are deemed to be unfavorable in the eyes of their customers to be perceived as highly committed to maintaining relationships with their customers.     

Entrepreneurial alliances as contractual forms

Advancing upon taxonomical research on interfirm alliances, we investigate the design of entrepreneurial firms' alliances in more fine-grained terms by focusing on the specific contractual provisions that firms negotiate into their alliance contracts. Drawing upon transaction cost arguments, we examine the determinants of the contractual complexity of collaborative agreements in the German telecommunications industry. The findings reveal that alliance contracts vary greatly in their complexity, yet contracts for non-equity alliances tend to be no more or less complex than those for equity alliances on average. Furthermore, multivariate findings on the roles of transaction-specific investment, relational capital, search costs, and so forth demonstrate that firms' contractual and governance choices have distinct antecedents.     

Toward a contingency theory of CRM adoption

Acknowledging the paucity of research on customers who are the targets of customer relationship management (CRM) efforts, this paper presents a contingency theory framework and set of research propositions suggesting that successful CRM adoption is contingent on a variety of contextual factors that influence value exchange in B2B channel relationships. Grounded in theoretical perspectives on the customer selection process, channel governance, transaction costs, power distribution in marketing channels, and dynamic capabilities, the authors identify five broad categories of variables potentially important in studying CRM adoption and directly affecting CRM success/failure.     

Science Parks and the Performance of New Technology-Based Firms: A Review of Recent U.K. Evidence and an Agenda for Future Research

Science parks were established to stimulate the formation and development of new technology-based firms (NTBFs). Despite the potential importance of these institutions as a mechanism for generating technological spillovers and employment growth, there has been little systematic analysis of their impact on NTBFs. In this paper, we review some recent evidence comparing the performance of firms located on and off U.K. science parks. This preliminary evidence suggests that the "returns" to being located on a science park are negligible. We conjecture that these results may be due to imprecise estimates of these returns and may also be masking important differences in the returns to different types of science parks. In addition, we outline an agenda for additional research on the effects of these institutions on NTBF performance.     

On growth drivers of high-tech start-ups: Exploring the role of founders' human capital and venture capital

In this paper, we jointly analyze the effects of the human capital of founders and access to venture capital (VC) financing on the growth of 439 Italian new technology-based firms (NTBFs). We rely on econometric models that control for survivorship bias and the endogeneity of VC financing. As to non-VC-backed firms, the competence-based argument that the capabilities of NTBFs coincide with founders' skills is confirmed. Nonetheless, once a NTBF obtains VC, this coincidence vanishes, pointing to the “coach” function performed by VC investors. Conversely, the view that sees the “scout” function as the main task performed by VC investors is not supported.     

Exploring the role of extrovert-introvert customers’ personality prototype as a driver of customer engagement: Does relationship duration matter?

Drawing on social exchange theory, the current study examines new drivers and their associated processes of customer engagement. In spirit, the study tests the direct and indirect impacts of the extraversion–introversion personality trait on customer engagement. The study takes into consideration the contingency role of time by testing the moderating role of relationship duration. Results demonstrate that the more extraverted customers are, the more they are likely to engage with service firms. Further, extraversion is positively related to customer–employee interaction, which in turn leads to more utilitarian and hedonic values perceived by customers. Both types of value, then, induce higher customer engagement behaviors in terms of customer referrals, knowledge sharing, and social-influence. Findings demonstrate that relationship duration moderates some of the examined relationships. The current study contributes to the literature by extending the knowledge on customer engagement's predisposition and social causes.     

Evolving "New Marketing" Philosophies By Merging Existing Concepts: Application Of Process Within Small High-Technology Firms

The important role of small high-technology firms in both job creation and new innovations capable of sustaining a country's competitive advantage has understandably caused many Governments to be interested in factors influencing the market performance of these types of firm. A potential hazard with alternative emerging theories about appropriate marketing philosophies is that polarisation of opinions may cause theorists to reject alternative perspectives despite the fact that observations of "real world" marketing practice may suggest that a hybrid managerial approach is the most appropriate response to prevailing market circumstances. If one accepts this perspective, it permits merger of the transactional, relationship and entrepreneurial schools of marketing thought; thereby generating alternative approaches to marketing practice based upon (i) conservative-transactional, (ii) conservative-relationship, (iii) entrepreneurial-transactional and (iv) entrepreneurial-relationship orientations.

Research questions which arise about a hybrid concept are whether orientation might influence overall performance and the level of internal organisational competencies required of the firm in the key areas of innovation, HRM, employee productivity and decision-making. The results of a mail survey measuring revenue growth suggest that an entrepreneurial-relationship orientation will enhance overall performance of small high-technology firms. The survey also suggests that as entrepreneurial high-technology firms move closer to customers they exhibit higher competencies in areas such as HRM, employee productivity, management of quality and utilisation of information in decision-making.

It is concluded that the research has some interesting implications concerning the appropriate marketing styles available to small, high-technology firms. As entrepreneurial and relationship marketing can enhance performance, then possibly an owner/manager seeking to increase sales may be able to select a style which seem appropriate both to the degree to which customers seek closer relationships with suppliers and the vision of the firm concerning the importance of innovation as a strategy for delivering customer satisfaction. Further research is needed in order to gain additional understanding of (a) the influence of organisational competencies on overall performance and (b) whether marketing style might influence how small high-technology firms acquire the knowledge they require to improve internal operational processes.     

Supplier Role Conflict: An Investigation of Its Relational Implications and Impact on Supplier Accommodation

Existing research on supply chain relationships suggests that one of the underlying tensions between supply chain partners is that of opposing perspectives and goals in the customer?supplier relationship. In today's business world with requirements in constant flux, suppliers are often asked to accommodate “special” requests made by their customers, not part of the contractual agreement. Suppliers frequently fill requests to protect the relationship with the customer, even if they fall outside of what they consider their role as a supplier. Issues of supplier role conflict emerge when customers and suppliers have different views of what the supplier's role should entail. There is little research examining the potential for supplier role conflict in supply chains. Specifically, this research draws on literature from multiple disciplines to consider supplier role conflict that may stem from accommodation and the impact of this role conflict and supplier accommodation on the supply chain relationship and future accommodation behavior. Hypotheses are tested using two scenario‐based experiments. Results suggest that supplier adaptation and flexibility both have positive relational effects. If suppliers perceive accommodation requests as outside of their contracted role, supplier role conflict can have detrimental effects on the supplier's relationship perceptions and their willingness for future accommodation.     

The Relationship between Mutual TSI and Interfirm Contracts: The Moderating Effect of Strong Ties

ABSTRACT

Purpose: This study examines the influence that tie strength has on contractual relationships between exchange parties with specific investments and also explores the role of network intensity in contractual relationships between buyers and suppliers. We hypothesize that the relationship between transaction-specific investments (TSIs) and contracts is moderated by network intensity.

Methodology: An empirical test is carried out by analyzing buyer–supplier relationships of manufacturing companies. The construct measures were based on those obtained from prior research, and the reliability and validity were established using exploratory and confirmatory factor analysis. The overall measurement model was then assessed with structural equation modeling using AMOS.

Findings: We focus primarily on contract variables as a governance mechanism that can be affected by the strength of ties among firms and the results of our empirical study indicate that supplier TSIs improve the use of informal contracts while the use of formal contracts undermines the effect on supplier TSIs. In addition, we found that firms with weak ties with their partners in the network are more likely to use both formal and informal contracts than those with strong ties.

Contribution: Our study has several contributions. First, our research improves the understanding of the relationship between TSIs and the choice of contracts as a governance mechanism, especially for mutual TSIs. Second, our research improves our understanding of the network strength in the context of business-to-business relationships extending the understanding of the relationship intensity among firms in a network. Third, we focused on the effects of network intensity on contractual relationships.     

The role of customer gratitude in making relationship marketing investments successful

This paper recognises that customer loyalty is important for many competitive organisations, and that retail firms make investments to build and maintain loyal relationships with their existing and potential customers (e.g. loyalty programs). However, there has been little focus on the mechanisms by which these relationship investments operate to achieve customer loyalty. This paper examines one mechanism, namely customer gratitude, which works to make a firm’s relationship marketing investment a success or a failure. Using data from 1600 undergraduate students, this study empirically confirms the mediating role of customer gratitude between the customers’ perceptions a firm’s relationship marketing investments and customers’ perceptions of the value of the relationship with the firm. Further, a significant moderating effect of perceived benevolence on the relationship between customers’ perceptions a firm’s relationship marketing investments and customer gratitude was identified. For theorists, this customer gratitude model offers a better psychological explanation of how relationship marketing investments operate to improve the value that customers place on their relationships with retailers. Our research suggests that managers should invest resources to stimulate customer gratitude in order to build strong customer–seller relationships.     

Factors influencing sales call frequency of industrial salespersons

Industrial sales representatives face a problem of allocating their time in deciding which customers or prospects to call on and how frequently to make those calls. These decisions directly influence the firm's costs and revenues, yet research in this area has been sparse. This article reports an empirical study of the relationship between the call frequency of salespersons and select characteristics of the market, the customer, and the salesperson-customer interaction. Data for the study were collected by a self-administered questionnaire which was completed by 83 salespersons representing 34 different firms. Respondents provided data concerning their call frequency on a particular customer, time in the sales territory, and responses to a series of Likert statements. Eight summative scales were developed from the statements. Multiple regression analysis was used to examine the relationship between call frequency and the independent variables. Several predictors (Role Consensus, Important Purchase Decision, Important Customer, and Customer Disposition) were salient variables in the model. The article concludes with a discussion of the implications of the research findings to marketing managers and researchers.     

Does managing customer accounts receivable impact customer relationships,and sales performance? An empirical investigation

The impact of accounts receivables on the performance of salespersons is largely ignored in sales literature. However, in many sales contexts, managing customers' accounts receivables is directly managed by the salespeople, and therefore substantially impacts their sales performance. Towards such sales contexts, in this empirical study, we study the effect of customer account receivables and salespersons' customer orientation on their relationship orientation and customer-related performance. We further analyse the direct impact of relationship orientation on customer-related performance. Using survey-based data from 224 salespersons based out of India, we empirically test the proposed model using partial least squares structural equation modelling. Our findings suggest that accounts receivables from customers and salespersons ‘customer orientation strongly impact relationship building and also improves customer-related performance. The salespersons’ relationship orientation also partially mediates the relationship between customer account receivables and customer-related performance. Therefore, this study provides much-required evidence to establish the salience of salesforce appropriately managing customers' account receivables so that its impact on their sales performance customer relationships are not adversely affected.     

LOGISTICS OUTSOURCING RELATIONSHIPS: CUSTOMER PERSPECTIVES

This study attempts to infuse relationship marketing theory into the study of logistics outsourcing relationships. In particular, the study demonstrates that not all of the partnerships between customers and providers of third‐party logistics services are the same in terms of their level of development. The existence of distinct levels of partnership established previously in the logistics literature is partially supported and a relationship between level of partnership development and the customer perceptions of key relationship marketing elements and outcomes is established. While exploratory in nature, these findings suggest there are benefits for the increased costs of developing closer partnerships.     

Market Orientation and Firm Value

Several studies in the market orientation literature demonstrate a positive relationship between a market orientation and firm performance. However, the mechanisms of this relationship have yet to be explored in detail. This article addresses such a gap by proposing a conceptual model that links market orientation to wealth creation in firms. The model posits that a market orientation guides investment in market-based assets that may be deployed to create customer value. The realisation of customer value helps to both capture and retain customers. Quicker and more extensive market penetration, shorter sales cycles, and decreased marketing and sales costs enhance the cash flow of a market-oriented firm. This may be recognised in higher valuations, which ultimately translate into higher share prices and wealth creation for the owners of the firm. This model is used to describe the creation of value in the Major Business Division of BT, a large information technology service company. Recent success in this Division of BT is attributed to the creation of a market orientation and customer value-based strategy and processes. The experience of BT provides a clear illustration of how a market oriented firm creates value for both customers and shareholders.