Properties of emerging organizations: An empirical test

The process of new venture creation is central to the field of entrepreneurship. The effects of initial organizing have a direct influence on survival, yet empirical examination of the dimensions of emergent organizations is limited. Using longitudinal data on nascent entrepreneurs, this paper empirically tests four properties of emerging organizations-intentionality, resources, boundary and exchange- and their effect on likelihood of continued organizing [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441]. Our results suggest that all four properties are necessary for firm survival in the short-term and those firms that organize more slowly are more likely to continue to organize. Further, nascent ventures in which intentionality preceded the other organizing properties were not significantly more likely to continue in the organizing effort. Our results suggest an extension of the original Katz and Gartner [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441] framework.     

Born-International SMEs: BI-Level Impacts of Resources and Intentions

The Katz and Gartner (1988) model describes four central properties of emerging organizations: resources, intention, exchange, and boundary. While designed as a general model for organizations, the approach has the potential to explain the early lives of "born-international" firms. In this study, boundary is used to define the central sampling frame. Two other properties, resources and intention, are evaluated in terms of their impact on the fourth property: exchange, measured as a firm's export growth and intensity. Given the inherent presence of two levels of analysis in emerging organizations, intention and resources are evaluated at both the individual and the organizational level. A sample (N = 47) of young "born-international" firms in the Indian software industry was studied, using a questionnaire. Results of the analysis are mixed for resources at both the individual and firm level variables. Intention is significant at the individual level but not the firm level. Contrary to other studies, these findings suggest that during the early stages of firm development, owner, not firm, characteristics play a pivotal role in performance, especially exports. The speculation is that this occurs because, in early stages, firms are relatively disorganized relative to the owner.     

Predicting the Lifetime Durations of Donors to Charities

ABSTRACT

Charitable organisations increasingly attempt to estimate the “lifetime values” of their donors with the intention of segmenting supporters and focusing resources and activities on high lifetime value givers. This paper contributes to the literature on donor lifetime value by presenting the results of an empirical study of the factors that encouraged donors to a certain charity to continue their relationship with the organisation. It emerged that the length of a person's association with the charity was significantly associated with two psychometric traits (involvement with charity giving and “helper's high”), four “exchange” variables (value and frequency of donations, number of charities supported and means of donation), and the strength of a person's inner feelings of enjoyment about being thanked for making a gift. Clear linkages between lifetime duration and the likelihood of an individual naming a charity as a beneficiary of his or her will were identified.     

The effects of perceptions of risk, environmental uncertainty, and growth aspirations on new venture creation success

This study extends Xu and Reuf (Strateg Organ 2:331?C355, 2004) by exploring the strategic and non-strategic risk-taking propensity perceptions of nascent entrepreneurs as it relates to the subsequent likelihood of venture formation success. In addition, the moderating influences of perceptions of environmental uncertainty and venture growth aspirations are also examined. Findings from an analysis of data from the Panel Study of Entrepreneurial Dynamics (PSED) I indicate that an entrepreneur??s risk-taking propensity has no relationship to the likelihood of successfully starting a business. Perceptions of environmental uncertainty and venture growth aspirations were positively related to non-strategic risk-taking propensity, yet none of these variables (strategic and non-strategic risk-taking propensity, environmental uncertainty and growth aspirations) had a significant effect on venture creation success. We suggest that risk-taking propensity, as measured in this study, does not play a significant role in differentiating between nascent entrepreneurs or others, or between those that are successful or unsuccessful at starting businesses.     

The Two Faces of R&D: Does Firm Absorptive Capacity Matter?

This paper examines the dual effect of firm R&D efforts on productivity growth for Swedish manufacturing firms. The R&D efforts do not only stimulate innovation but also enhance firms?? ability to identify, assimilate and exploit new knowledge from the environment (Cohen and Levinthal. Economics Journal 99:569?C596, 1989). In this paper, we assume that the principal channel of transmission of new knowledge is through I/O linkages. Our econometric evidence suggests that in addition to the firm??s own R&D activities, R&D spillovers embodied in traded goods within the industry, others imported from abroad, and technology spillovers transferred from the technological frontier within an industry are important determinants of firms?? productivity growth. Results suggest that domestic R&D spillovers following the I/O links between industries are of minor importance in this respect. We also analyze whether firms?? absorptive capacity matters for productivity growth. Analyzing absorptive capacity is particularly important for assessing the effective contribution of spillovers from other firms. The effect of a firm??s absorptive capacity is found to interact positively with imported R&D spillovers, whereas domestic rents spillovers seem to play a minor role for productivity growth.     

Movements, bandwagons, and clones: Industry evolution and the entrepreneurial process

Entrepreneurship research has paid insufficient attention to the context in which new businesses are started. Consequently, efforts to identify factors that consistently lead to entrepreneurial success have failed. This is because what works in one context will not necessarily work in another. Even worse, factors that lead to success in one context may lead to failure in another.This article addresses this problem by drawing from the concept of industry evolution to identify three broad but distinct organizing contexts—emerging, growth, and mature industries—and demonstrating how each context presents a different set of entrepreneurial challenges. An industry is defined not as a group of firms producing close substitutes, but instead, as a group of firms of the same organizational form. Industry evolution is understood therefore as the diffusion of an organizational form, with emerging, growth, and mature stages corresponding to the creation, exploitation and erosion of competitive advantage. Defining an industry in this manner makes it possible to overcome the problem of shifting industry boundaries and enables us to distinguish between entrepreneurial activities that shake up existing industries by creating new and competing organizational forms and entrepreneurial activities that replicate well-known organizational forms and drive an industry toward equilibrium. It also enables us to draw from the work of industrial organization economics, strategy, and population ecology.Entrepreneurship is defined as the creation of new organizations and is viewed as a context-dependent social process. New organizations are enacted as critical stakeholders change their behaviors in ways that allow the organization to emerge. The process is successful when the short-term existence of a new organization is no longer at risk. A typological theory of entrepreneurial success is developed by examining how the fit between context and four other critical dimensions cause successful foundings. The theory is multiplicative and probabilistic. It is multiplicative in that all dimensions need to fit for a founding to be successful. Poor fit in any one area can lead to failure. It is probabilistic in that the better the overall fit, the better the odds of success.In addition to context, the dimensions we examine are entrepreneurial networks, entrepreneurial confidence-building behaviors, the motivation of stakeholders, and organizational structures and strategies. In terms of entrepreneurial networks, we examine whether entrepreneurs have weak-tie or strongtie networks, and whether their networks are homogeneous or include subgroups that are unrelated. In terms of confidence-building behaviors, we explore the use of informal (e.g., repeated personal interaction) versus formal (e.g., contracts) mechanisms. With respect to stakeholder motivations, we ask whether stakeholders are driven by social or instrumental motivations. In terms of structure and strategy, we consider two issues. First, we explore whether the emerging organization is market or hierarchy based, and we consider the extent to which the organization is innovative versus imitative. We argue that these various dimensions come together in three logical configurations, that we label movements, bandwagons, and clones.EMERGING INDUSTRY ORGANIZING: MOVEMENTSMovements are the organizing processes through which new organizational forms are created. Pioneers of new forms of organizations have unique personal networks that enable them to see the potential of bringing the factors of production together in new combinations. They have strong ties to two or more nonoverlapping networks. To succeed, they must overcome problems associated with lack of legitimacy. Theentrepreneur is joined by highly committed stakeholders who are motivated by social factors. Belief in the venture's success is achieved through informal confidence building, such as incremental personal exchange and third-party reputation. In this manner, stakeholders develop personal familiarity with the form and make positive assessments about the entrepreneur's competence and trustworthiness. The organizing structure is market based with participant commitments being secured through flexible, cooperative agreements. The strategic emphasis is on innovation and experimentation. The belief in the importance and viability of the new organizational form serves as a loose ideology for controlling and coordinating the actions of participants.GROWTH INDUSTRY ORGANIZING: BANDWAGONSBandwagons are organizing processes that seek to exploit the potential of a newly legitimated form. The strategic challenge at this stage is to prosper newly legitimated form. The strategic challenge at this stage is to prospeamidst rapid growth and change. The successful entrepreneur has an extensive network of high status individuals that can be tapped to quickly mobilize resources within a narrow window of opportunity. Stakeholders are motivated less by social factors, than by a desire to secure the benefits of being early movers. Formal confidence-building mechanisms dominate. In an effort to achieve efficiencies, develop sources of competitive advantage, and preempt the competition, more value-chain activities are developed in house. The strategic posture remains entrepreneurial; however, more emphasis is placed on following the example of other firms.MATURE INDUSTRY ORGANIZING: CLONESClones are the organizing processes that replicate existing forms and incorporate all that has been learned about a given industry and type of business. Strong competition along with stable demand and technology make it difficult to find a source of competitive advantage in a mature industry. At this stage, the successful founder is someone with extensive industry knowledge and contacts who is capable of extracting operating efficiencies and/or identifying some underserved market segment. Expected returns are modest and stakeholders need to be motivated partly by social factors. However, the large amount of information now available about the form and the market itserves enables stakeholders to base their participation decisions on a rational assessment of expected future benefits. Given increased experience with the form, the relationships between the organization and its stakeholders are more predictable and as a consequence, subject to greater formalization. Models exist showing how to structure theserelationships, facilitating greater use of more specific contracts and guarantees. With tight margins and the need for efficiency, greater use is made of hierarchy in an attempt to manage costs. These same highly competitive conditions also make mistakes very expensive. The organization needs to draw upon the knowledge that others have learned about the form. Consequently, it adopts a more conservative strategic posture and is less likely to deviate from established practice.IMPLICATIONS FOR FUTURE RESEARCHIf we are ever to understand what leads to entrepreneurial success, we must pay more attention to the context in which organizing occurs. Our typology suggests that fundamentally different processes may be at work at different stages of industry evolution. In addition to empirically testing our theory, an opportunity exists to reexamine the existing entrepreneurship literature through a new conceptual lens, asking how our interpretation of the research would differ if context was considered explicitly. Our theory also has the potential to inform questions about the role of organizational foundings in the diffusion of competitive advantage and to examine the impact of.founding conditions on long-term strategic adaptation.     

The Impact of Business Process Complexity on Business Process Standardization

Today??s organizations are struggling with increasing business process complexity and face serious problems when standardizing business processes. A?possible strategy seems to be to enhance standardization efforts in order to ensure standardization success. In this paper, we analyze the triangle relationship between standardization effort, business process complexity, and business process standardization. We test the hypotheses that higher business process complexity is related to higher standardization effort and lower business process standardization as well as that higher standardization effort is related to higher business process standardization. We report on the development and testing of a conceptual model that allows to understand the impact of business process complexity on business process standardization and standardization effort. Findings from a survey among 255 business process management experts are used to evaluate our hypotheses. Our results suggest that business process complexity has to be considered as an important driver of standardization effort and constrains business process standardization. Moreover, we show that higher standardization effort cannot compensate for higher business process complexity to ensure business process standardization.     

Hoping to Enhance a Local Funding Relationship: Exploring Private Sector Business Preferences When Contributing to Nonprofit Organizations

ABSTRACT

Nonprofit organizations want relationships with private sector businesses because nonprofits rely on fundraising to generate income, a portion of which is provided through the charitable giving of the private sector. Who the private sector contributes to, why they give, and what variables positively influence more giving, are all questions nonprofit organizations continuously want answers to. The answers though are often arbitrary, reflecting subjective criteria based on individual business preferences, the economic status of the marketplace, the community context, and the credibility of the nonprofit program. Because the relationship is dynamic and the answers may continue to change, nonprofits must continue to ask.

This article discusses an exploratory effort to identify the funding attitudes and behaviors of private sector businesses who contribute to their local nonprofit organizations.

The results showed the majority of private sector businesses who responded said they support their local nonprofits primarily with cash contributions, and identified altruism as a key motivation for giving. Results also revealed that their funding choices are somewhat arbitrary with little formalized process for decision-making. Dollars are contributed primarily by direction of individual managers or owners who prefer informal relationships with their local nonprofit organizations, but expect funding requests to clearly explain how the dollars will be used. The findings, although limited, provide results that further examine this complex relationship, and perhaps provide insight into how the relationship could be enhanced for the ultimate benefit of both organizations' needs.     

Towards ��An Intellectual Capital-Based View of the Firm��: Origins and Nature

Economic and social activities are undergoing radical changes, which can be labelled as ??knowledge economy and/or society??. In this sense, intellectual capital (IC), or knowledge assets, as the fourth factor of production, is replacing the other ones ?C job, land and capital. This article tries to offer the origins and nature of the firm??s IC that can be labelled as ??An Intellectual Capital-Based View of the Firm Competition??. This framework tries to highlight the strategic role of different intangible assets like talented and committed workers, cultural values, or long-term relationships among the firm and its stakeholders ?C customers, allies, suppliers and society in general ?C in gaining and sustaining competitive advantages, being the management of IC a key issue in the management agenda.     

Cross-national differences in travelers’ continuance of knowledge sharing in online travel communities

This study aims to investigate factors motivating travellers to continue knowledge sharing across four countries and how these factors vary among answerers, lurkers, and askers. We utilised structural equation modelling to analyze the data gathered from a sample of 6,803 travelers in four countries. Findings indicated that the influence of subjective norm, reputation, shared language, satisfaction, and commitment on continuance of knowledge sharing was greater in developing economies compared with developed economies. The findings also indicated that shared language and reputation enhancement are positively related to attitude towards users behaviour to continue knowledge sharing for answerers, lurkers, and askers. Knowledge demand is positively related to attitude for only lurkers. Moreover, travellers are most apt to continue knowledge sharing regardless of their original intentions in emerging economies compared with developed markets. This study aids practitioners to carry out specific targeted measurements and develop new marketing strategies to meet the needs of each segment.     

Organizing for Society: A Typology of Social Entrepreneuring Models

In this article, we use content and cluster analysis on a global sample of 200 social entrepreneurial organizations to develop a typology of social entrepreneuring models. This typology is based on four possible forms of capital that can be leveraged: social, economic, human, and political. Furthermore, our findings reveal that these four social entrepreneuring models are associated with distinct logics of justification that may explain different ways of organizing across organizations. This study contributes to understanding social entrepreneurship as a field of practice and it describes avenues for theorizing about the different organizational approaches adopted by social entrepreneurs.     

Entrepreneurship in India: the question of occupational transition

Occupational transition from salaried to self-employment status is important in developed economies, but is even more critical in emerging economies, as individuals?? occupational choices can drive economic development. Using data on 3,295 individuals from 23 administrative regions in India, we examine the effect of regional and geographic factors on actual and intended transition. We find that regional self-employment and unemployment rates are associated with a lower likelihood of past and future transitions, but that regional gross domestic product (GDP) per capita is only relevant for actual transitions. Further, urban/rural location moderates the effects of income ratios and regional GDP per capita. While we observe similarities between India and developed economies, there are intriguing differences, and new insights are identified.     

Constellations of firms and new ventures

Firm growth is typically described as, “from the inside out;” an integrated process of resource capture. Supplementing the traditional view of growth from within, this article focuses on how small firms come into being and grow resorting to cooperative relationships with external organizations. Through such a process new firms come into being without notable direct investments and grow without significant employment increases. The emerging organizational design stresses the importance of constellations. Constellational structures suggest that organizations do not survive as isolated and self-sufficient entities; rather they are strongly tied to supportive quasi-infrastructural collectives. Firms grow through various and changing interorganizational relationships. We suggest that a growth path of firm disintegration is positively associated with flexibility, cost reductions and more favorable competitive position; that the success of this path in different industries and countries makes a venturing without investing process more than a “small is beautiful fad”.We find regularities in growth patterns, at the beginning, an unplanned constellation of firms each geared to solving short-term contingent problems. Planned interfirm linkages and partnerships geared to greater effectiveness arise in more advanced stages: in this manner the competitive position of the constellation is improved.This article suggests underlying conditions facilitating the growth of organizations that use synergies and the constellations' resources effectively.     

Ethics and HRM: Theoretical and Conceptual Analysis

Despite the ongoing consideration of the ethical nature of human resource management (HRM), little research has been conducted on how morality and ethics are represented in the discourse, activities and lived experiences of human resource (HR) professionals. In this paper, we connect the thinking and lived experiences of HR professionals to an alternative ethics, rooted in the work of Bauman (Modernity and the Holocaust, Polity Press, Cambridge, 1989; Theory, Culture and Society 7:5?C38, 1990; Postmodern Ethics, Blackwell, Oxford, 1991; Approaches to Social Enquiry, Polity Press, Cambridge, 1993; Life in Fragments, Blackwell, Oxford, 1995) and Levinas (Otherwise than Being, or, Beyond Essence, Duquesne University Press, Pittsburgh, PA, 1998). We argue that the study of HRM and ethics should be contextualized within the discourses used, the practices and activities of HR professionals. Through the analysis of interview data from 40 predominantly Canadian HR practitioners and managers we experiment with Bauman??s notion of ??moral impulse?? to help us understand how HRM is both a product and perpetuator of moral neutralization in organizations. We suggest that HRM as it is practiced is concerned with distancing, depersonalizing, and dissembling, and acts in support of the ??moral?? requirements of business, not of people. However, we also recognize that HR practitioners and managers are often confronted with and conflicted by actions and decisions that they are required to take, therefore opening possibilities and hope for an alternative ethical HRM.     

Interorganizational Favour Exchange and the Relationship Between Doing Well and Doing Good

This article examines whether ethical business practice enhances financial performance with respect to interorganizational favour exchange. We argue that the link between the ethicality and economic utility of interorganizational favour exchange is governed by: (1) organizational–individual interest alignment/conflict and (2) the fairness or justifiability of favour exchanges from the perspective of third parties. We classify interorganizational (IO) favour exchange into four types (Business–Personal, Personal–Business, Personal–Personal and Business–Business favour exchange). Our analysis shows that the first three types of favour exchange are unethical as they involve conflicts between organizational and individual interests in one or both participating organizations that negatively affect organizational value creation. The last type of favour exchange involves organizational–individual interest alignment in both participating organizations and positively affects the capacity of those involved in the exchange to create value. Favour exchanges of this fourth variety are ethically justifiable unless they unfairly damage the legitimate interests of third parties. In the latter case, these favour exchanges create the risk of negative third party reactions, which in turn affect the sustainability of the benefits of the favour exchanges to the focal group (the dyad). Our research results advance understanding of the ethical and economic implications of IO favour exchange, counter the prejudice against this behaviour in organizations, provide ethical guidance for management and business practice, and have implications for the relationship between doing well and doing good.     

Donate Money,but Whose? An Empirical Study of Ultimate Control Rights,Agency Problems,and Corporate Philanthropy in China

Using empirical evidence gathered from Chinese listed companies, this article explores the relationship between micro-governance mechanisms and corporate philanthropy from a corporate governance perspective. In China’s emerging market, ultimate controlling shareholders of state-owned enterprises (SOEs) are reluctant to donate their assets or resources to charitable organizations; in private enterprises (PEs) marked by more deviation in voting and cash flow rights, such donations tend to be more likely. However, the ultimate controllers in PEs refuse to donate assets or resources they control or own, which implies that corporate philanthropy by PEs comes at the cost of others, through assets or resources owned by minority shareholders. Even after devastating natural disasters such as the 2008 Wenchuan Earthquake, the controlling shareholders continue to express reluctance to donate any assets they control. Despite widespread evidence that corporate philanthropy boosts corporate growth and profitability, these ultimate controllers indicate no intention to donate their own money as a means to improve corporate performance.     

Outward internationalization of private enterprises in China: The effect of competitive advantages and disadvantages compared to home market rivals

This study uses the resource-based view of a firm to examine the outward internationalization of private firms in China. We investigate the extent to which advantages/disadvantages of resource endowment and organizing capability of Chinese private enterprises (relative to both state-owned enterprises and foreign-invested enterprises at home) may drive outward internationalization and affect their risk-taking tendency when going international. Our analyses of 553 Chinese private enterprises show that a Chinese private firm's likelihood of venturing abroad is associated with resource endowment advantages vis-à-vis foreign-invested enterprises, organizing capability advantages vis-à-vis state-owned enterprises, and organizing capability disadvantages vis-à-vis foreign-invested enterprises. These same advantages (or disadvantages) in organizing capabilities also increase a firm's likelihood of choosing a high-risk entry mode. We also find that a firm's resource endowment and organizing capabilities interact with each other and mutually enhance each other's effect on the likelihood of outward internationalization.     

Engaging Stakeholders in Emerging Economies: The Case of Multilatinas

Stakeholder engagement is central to organizations’ social impact. Engagement activities rely on mechanisms whose complexity increases for multinational corporations (MNCs). This study explores the boundary conditions of our Western/Northern-based knowledge of stakeholder engagement mechanisms through the examination of such practices in multinational companies founded in Latin America (Multilatinas—MLs). Based on previous studies on the identification of organizational stakeholders in the region, we aim to understand the specific engagement mechanisms MLs use. To this end, we analyze qualitatively 28 corporate sustainability reports by relevant firms. Our findings show that the community includes silent (or non-visible) stakeholders composed of subgroups not listed as organizational stakeholders but mentioned in the report as engaged by the company or a subsidiary. MLs in our sample use four main mechanisms to engage these subgroups: (a) strong, visible commitments to local social organizations; (b) continuous dialogue with members of the community; (c) networks of volunteers to help perform the social activities of the companies; and (d) creation of social infrastructure institutions. We end by detailing the theoretical implications for stakeholder engagement among emerging economies multinational companies (EMNCs) and for MNCs in general.     

Expectancy theory and nascent entrepreneurship

Motivation is an important factor that distinguishes those nascent entrepreneurs who make progress towards an operating venture from those who do not. Based on Vroom??s (Work and motivation, 1964) expectancy theory, we predict that startup-specific instrumentality, valence and expectancy are key components of entrepreneurial motivation and closely related to those intentions, efforts, and behaviors that will eventually lead to operating a firm. Hypotheses are tested using data from the first Panel Study of Entrepreneurial Dynamics I. Our results show that valence is a multidimensional construct, and that various types of valence are related to different intent and behavioral outcomes. All types of valence, instrumentality, and expectancy are related to a nascent entrepreneur??s intended effort level in a cross-section of data, and over time, intended effort is positively related to operative firm status. Overall, our results suggest that expectancy theory holds promise for research on nascent entrepreneurs?? motivation.     

Towards a Framework of Reverse Knowledge Transfer by Emerging Economy Multinationals: Evidence from Chinese MNE Subsidiaries in the United States

This article extends the research on knowledge transfer by emerging‐economy multinationals (EEMs) by exploring the determinants of successful reverse knowledge transfer (RKT) in Chinese enterprises operating in the United States. Building upon organizational evolution and learning literature, we propose a model linking strategic asset‐seeking motivations, headquarters (HQ) control, and subsidiary age to RKT. The model is empirically tested in the context of Chinese enterprises in the United States and further justified by four cases of Chinese multinationals. Our exploratory study provides initial evidence that strategic asset‐seeking motivations and HQ control are significantly and positively related to RKT. Furthermore, our empirical evidence indicates a negative relationship between subsidiary age and RKT. We discuss the implications for theory development and practice for managing and organizing EEMs and their subsidiaries and suggest avenues for future research on this emerging phenomenon. © 2016 Wiley Periodicals, Inc.