IDEAS home Printed from https://ideas.repec.org/a/sae/entthe/v23y1998i1p5-29.html
   My bibliography  Save this article

The Determinants of New Venture Performance: An Extended Model

Author

Listed:
  • James J. Chrisman
  • Alan Bauerschmidt
  • Charles W. Hofer

Abstract

This article argues that new venture formation is a special case of strategic management theory. Thus, Sandberg & Hofer's (1987) model of new venture performance, which states that new venture performance is a function of industry structure, venture strategy, and the founding entrepreneur, must be extended to include the resources and the organizational structure, processes, and systems developed by the venture to implement its strategy and achieve its objectives. The key assumptions underlying this model are presented, and specific propositions concerning how resources and organizational structure, processes, and systems affect new venture performance are developed.

Suggested Citation

  • James J. Chrisman & Alan Bauerschmidt & Charles W. Hofer, 1998. "The Determinants of New Venture Performance: An Extended Model," Entrepreneurship Theory and Practice, , vol. 23(1), pages 5-29, October.
    • Handle: RePEc:sae:entthe:v:23:y:1998:i:1:p:5-29
    DOI: 10.1177/104225879802300101
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/104225879802300101
    Download Restriction: no
    File URL: https://libkey.io/10.1177/104225879802300101?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Caves, Richard E, 1980. "Industrial Organization, Corporate Strategy and Structure," Journal of Economic Literature, American Economic Association, vol. 18(1), pages 64-92, March.
    2. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    3. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    4. Westhead, Paul, 1990. "A typology of new manufacturing firm founders in Wales: Performance measures and public policy implications," Journal of Business Venturing, Elsevier, vol. 5(2), pages 103-122, March.
    5. Jeffrey G. Covin & Teresa Joyce Covin, 1990. "Competitive Aggressiveness, Environmental Context, and Small Firm Performance," Entrepreneurship Theory and Practice, , vol. 14(4), pages 35-50, July.
    6. Kasra Ferdows, 1980. "Start-up of Small Manufacturing Ventures in Developing Countries," Entrepreneurship Theory and Practice, , vol. 5(2), pages 12-22, October.
    7. Smith, Ken G. & Gannon, Martin J. & Grimm, Curtis & Mitchell, Terence R., 1988. "Decision making behavior in smaller entrepreneurial and larger professionally managed firms," Journal of Business Venturing, Elsevier, vol. 3(3), pages 223-232.
    8. Sandberg, William R. & Hofer, Charles W., 1987. "Improving new venture performance: The role of strategy, industry structure, and the entrepreneur," Journal of Business Venturing, Elsevier, vol. 2(1), pages 5-28.
    9. Jarillo, J. Carlos, 1989. "Entrepreneurship and growth: the strategic use of external resources," Journal of Business Venturing, Elsevier, vol. 4(2), pages 133-147, March.
    10. W. Alan Randolph & Harry J. Sapienza & Mary Anne Watson, 1991. "Technology-Structure Fit and Performance in Small Businesses: An Examination of the Moderating Effects of Organizational States," Entrepreneurship Theory and Practice, , vol. 16(1), pages 27-42, October.
    11. Calvin M. Boardman & Jon W. Bartley & Richard L. Ratliff, 1981. "Small Business Growth Characteristics," Entrepreneurship Theory and Practice, , vol. 5(3), pages 33-43, January.
    12. Robert A. Peterson & George Kozmetsky & Nancy M. Ridgway, 1983. "Perceived Causes of Small Business Failures: A Research Note," Entrepreneurship Theory and Practice, , vol. 8(1), pages 15-19, July.
    13. Venkataraman, S. & Van De Ven, Andrew H. & Buckeye, Jeanne & Hudson, Roger, 1990. "Starting up in a turbulent environment: A process model of failure among firms with high customer dependence," Journal of Business Venturing, Elsevier, vol. 5(5), pages 277-295, September.
    14. Fombrun, Charles J. & Wally, Stefan, 1989. "Structuring small firms for rapid growth," Journal of Business Venturing, Elsevier, vol. 4(2), pages 107-122, March.
    15. Kazanjian, Robert K. & Drazin, Robert, 1990. "A stage-contingent model of design and growth for technology based new ventures," Journal of Business Venturing, Elsevier, vol. 5(3), pages 137-150, May.
    16. Dubini, Paola, 1989. "Which venture capital backed entrepreneurs have the best chances of succeeding?," Journal of Business Venturing, Elsevier, vol. 4(2), pages 123-132, March.
    17. Boag, David A., 1987. "Marketing control and performance in early-growth companies," Journal of Business Venturing, Elsevier, vol. 2(4), pages 365-379.
    18. Giovanni Dosi, 2000. "Sources, Procedures, and Microeconomic Effects of Innovation," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 2, pages 63-114, Edward Elgar Publishing.
    19. Stuart, Robert & Abetti, Pier A., 1987. "Start-up ventures: Towards the prediction of initial success," Journal of Business Venturing, Elsevier, vol. 2(3), pages 215-230.
    20. Ginn, Charles W. & Sexton, Donald L., 1990. "A comparison of the personality type dimensions of the 1987 Inc. 500 company founders/CEOs with those of slower-growth firms," Journal of Business Venturing, Elsevier, vol. 5(5), pages 313-326, September.
    21. Macmillan, Ian C. & Zemann, Lauriann & Subbanarasimha, P. N., 1987. "Criteria distinguishing successful from unsuccessful ventures in the venture screening process," Journal of Business Venturing, Elsevier, vol. 2(2), pages 123-137.
    22. Covin, Jeffrey G. & Slevin, Dennis P., 1990. "New venture strategic posture, structure, and performance: An industry life cycle analysis," Journal of Business Venturing, Elsevier, vol. 5(2), pages 123-135, March.
    23. Roure, Juan B. & Keeley, Robert H., 1990. "Predictors of success in new technology based ventures," Journal of Business Venturing, Elsevier, vol. 5(4), pages 201-220, July.
    24. A. B. Ibrahim & J. R. Goodwin, 1986. "Perceived Causes of Success in Small Business," Entrepreneurship Theory and Practice, , vol. 11(2), pages 41-50, October.
    25. Richard Cuba & David Decenzo & Andrea Anish, 1983. "Management Practices of Successful Female Business Owners," Entrepreneurship Theory and Practice, , vol. 8(2), pages 40-46, October.
    26. Feeser, Henry R. & Willard, Gary E., 1989. "Incubators and performance: A comparison of high- and low-growth high-tech firms," Journal of Business Venturing, Elsevier, vol. 4(6), pages 429-442, November.
    27. Richard B. Robinson Jr. & Moragea Y. Salem & John E. Logan & John A. Pearce II, 1986. "Planning Activities Related to Independent Retail Firm Performance," Entrepreneurship Theory and Practice, , vol. 11(1), pages 19-26, July.
    28. Radha Chaganti & Rajeswararao Chaganti & Vijay Mahajan, 1989. "Profitable Small Business Strategies under Different Types of Competition," Entrepreneurship Theory and Practice, , vol. 13(3), pages 21-36, April.
    29. Reynolds, Paul D., 1987. "New firms: Societal contribution versus survival potential," Journal of Business Venturing, Elsevier, vol. 2(3), pages 231-246.
    30. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    31. Duchesneau, Donald A. & Gartner, William B., 1990. "A profile of new venture success and failure in an emerging industry," Journal of Business Venturing, Elsevier, vol. 5(5), pages 297-312, September.
    32. Charles W. Hofer & William R. Sandberg, 1987. "Improving New Venture Performance: Some Guidelines for Success," Entrepreneurship Theory and Practice, , vol. 12(1), pages 11-26, July.
    33. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    34. Coyne, Kevin P., 1986. "Sustainable competitive advantage--What it is, what it isn't," Business Horizons, Elsevier, vol. 29(1), pages 54-61.
    35. Reagan, Ronald, 1985. "Why this is an entrepreneurial age," Journal of Business Venturing, Elsevier, vol. 1(1), pages 1-4.
    36. Charles W. Hofer & Ram Charan, 1984. "The Transition to Professional Management: Mission Impossible?," Entrepreneurship Theory and Practice, , vol. 9(1), pages 1-11, July.
    37. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    38. Roure, Juan B. & Maidique, Modesto A., 1986. "Linking prefunding factors and high-technology venture success: An exploratory study," Journal of Business Venturing, Elsevier, vol. 1(3), pages 295-306.
    39. Rene Bouwen & Chris Steyaert, 1990. "Construing Organizational Texture In Young Entrepreneurial Firms," Journal of Management Studies, Wiley Blackwell, vol. 27(6), pages 637-649, November.
    40. Stuart, Robert W. & Abetti, Pier A., 1990. "Impact of entrepreneurial and management experience on early performance," Journal of Business Venturing, Elsevier, vol. 5(3), pages 151-162, May.
    41. James J. Chrisman & John Leslie, 1989. "Strategic, Administrative, and Operating Problems: The Impact of Outsiders on Small Firm Performance," Entrepreneurship Theory and Practice, , vol. 13(3), pages 37-52, April.
    42. Sapienza, Harry J., 1992. "When do venture capitalists add value?," Journal of Business Venturing, Elsevier, vol. 7(1), pages 9-27, January.
    43. L. J. Bourgeois, III & Kathleen M. Eisenhardt, 1988. "Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry," Management Science, INFORMS, vol. 34(7), pages 816-835, July.
    44. Larson, Andrea, 1991. "Partner networks: Leveraging external ties to improve entrepreneurial performance," Journal of Business Venturing, Elsevier, vol. 6(3), pages 173-188, May.
    45. Kenneth J. Hatten & Mary Louise Hatten, 1987. "Strategic groups, asymmetrical mobility barriers and contestability," Strategic Management Journal, Wiley Blackwell, vol. 8(4), pages 329-342, July.
    46. Cooper, Arnold C. & Woo, Carolyn Y. & Dunkelberg, William C., 1989. "Entrepreneurship and the initial size of firms," Journal of Business Venturing, Elsevier, vol. 4(5), pages 317-332, September.
    47. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
    48. Davidsson, Per, 1991. "Continued entrepreneurship: Ability, need, and opportunity as determinants of small firm growth," Journal of Business Venturing, Elsevier, vol. 6(6), pages 405-429, November.
    49. Covin, Jeffrey G. & Slevin, Dennis P. & Covin, Teresa Joyce, 1990. "Content and performance of growth-seeking strategies: A comparison of small firms in high- and low technology industries," Journal of Business Venturing, Elsevier, vol. 5(6), pages 391-412, November.
    50. Richard C. Cuba & Gene Milbourn Jr., 1982. "Delegating for Small Business Success," Entrepreneurship Theory and Practice, , vol. 7(2), pages 33-41, October.
    51. Lawrence M. Gales & Richard S. Blackburn, 1990. "An Analysis of the Impact of Supplier Strategies and Relationships on Small Retailer Actions, Perceptions, and Performance," Entrepreneurship Theory and Practice, , vol. 15(1), pages 7-22, October.
    52. Robert H. Keeley & Juan B. Roure, 1990. "Management, Strategy, and Industry Structure As Influences on the Success of New Firms: A Structural Model," Management Science, INFORMS, vol. 36(10), pages 1256-1267, October.
    53. Sykes, Hollister B., 1986. "The anatomy of a corporate venturing program: Factors influencing success," Journal of Business Venturing, Elsevier, vol. 1(3), pages 275-293.
    54. Robert A. Burgelman, 1983. "Corporate Entrepreneurship and Strategic Management: Insights from a Process Study," Management Science, INFORMS, vol. 29(12), pages 1349-1364, December.
    55. Cooper, Arnold C. & Bruno, Albert V., 1977. "Success among high-technology firms," Business Horizons, Elsevier, vol. 20(2), pages 16-22, April.
    56. Cooper, Arnold C. & Willard, Gary E. & Woo, Carolyn Y., 1986. "Strategies of high performing new and small firms: A reexamination of the niche concept," Journal of Business Venturing, Elsevier, vol. 1(3), pages 247-260.
    57. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    58. N/A, 1983. "American Journal of Small Business," Entrepreneurship Theory and Practice, , vol. 7(3), pages 61-61, January.
    59. Henry R. Feeser & Gary E. Willard, 1990. "Founding strategy and performance: A comparison of high and low growth high tech firms," Strategic Management Journal, Wiley Blackwell, vol. 11(2), pages 87-98, February.
    60. Porter, Michael E, 1979. "The Structure within Industries and Companies' Performance," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 214-227, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zahra, Shaker A., 1996. "Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures," Journal of Business Venturing, Elsevier, vol. 11(4), pages 289-321, July.
    2. Denis A. Grégoire & Martin X. Noël & Richard Déry & Jean–Pierre Béchard, 2006. "Is There Conceptual Convergence in Entrepreneurship Research? A Co–Citation Analysis of Frontiers of Entrepreneurship Research, 1981–2004," Entrepreneurship Theory and Practice, , vol. 30(3), pages 333-373, May.
    3. Harry J. Sapienza & Curtis M. Grimm, 1997. "Founder Characteristics, Start-Up Process, and Strategy/Structure Variables as Predictors of Shortline Railroad Performance," Entrepreneurship Theory and Practice, , vol. 22(1), pages 5-24, October.
    4. Shrader, Rodney C. & Simon, Mark, 1997. "Corporate versus independent new ventures: Resource, strategy, and performance differences," Journal of Business Venturing, Elsevier, vol. 12(1), pages 47-66, January.
    5. Branzei, Oana & Vertinsky, Ilan, 2006. "Strategic pathways to product innovation capabilities in SMEs," Journal of Business Venturing, Elsevier, vol. 21(1), pages 75-105, January.
    6. Barringer, Bruce R. & Jones, Foard F. & Neubaum, Donald O., 2005. "A quantitative content analysis of the characteristics of rapid-growth firms and their founders," Journal of Business Venturing, Elsevier, vol. 20(5), pages 663-687, September.
    7. Mehmet Ali Köseoglu & John A. Parnell & Melissa Yan Yee Yick, 2021. "Identifying influential studies and maturity level in intellectual structure of fields: evidence from strategic management," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 1271-1309, February.
    8. Ge, Dingkun & Mahoney, James M. & Mahoney, Joseph T., 2005. "New Venture Valuation by Venture Capitalists: An Integrative Approach," Working Papers 05-0124, University of Illinois at Urbana-Champaign, College of Business.
    9. Man, Thomas W. Y. & Lau, Theresa & Chan, K. F., 2002. "The competitiveness of small and medium enterprises: A conceptualization with focus on entrepreneurial competencies," Journal of Business Venturing, Elsevier, vol. 17(2), pages 123-142, March.
    10. Seungku Ahn & Juil Kim, 2019. "The Effect of Managerial Characteristics on the Performance of Technology-Based Start-ups in Korea," International Journal of Global Business and Competitiveness, Springer, vol. 14(1), pages 11-23, December.
    11. Desislava I. Yordanova, 2008. "Gender Effects on Performance in Bulgarian Private Enterprises," Working Papers 0806, Departament Empresa, Universitat Autònoma de Barcelona, revised Oct 2008.
    12. Leiblein, Michael J. & Reuer, Jeffrey J., 2004. "Building a foreign sales base: the roles of capabilities and alliances for entrepreneurial firms," Journal of Business Venturing, Elsevier, vol. 19(2), pages 285-307, March.
    13. Gregory G. Dess & G. T. Lumpkin & Jeffrey E. Mcgee, 1999. "Linking Corporate Entrepreneurship to Strategy, Structure, and Process: Suggested Research Directions," Entrepreneurship Theory and Practice, , vol. 23(3), pages 85-102, April.
    14. Vincenzo Maggioni & Mario Sorrentino & Mary Williams, 1999. "Mixed Consequences of Government Aid for New Venture Creation: Evidence from Italy," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 3(3), pages 287-305, September.
    15. Bamford, Charles E. & Dean, Thomas J. & McDougall, Patricia P., 2000. "An examination of the impact of initial founding conditions and decisions upon the performance of new bank start-ups," Journal of Business Venturing, Elsevier, vol. 15(3), pages 253-277, May.
    16. Bamford, Charles E. & Dean, Thomas J. & Douglas, Thomas J., 2004. "The temporal nature of growth determinants in new bank foundings: implications for new venture research design," Journal of Business Venturing, Elsevier, vol. 19(6), pages 899-919, November.
    17. Yasemin Y. Kor, 2003. "Experience-Based Top Management Team Competence and Sustained Growth," Organization Science, INFORMS, vol. 14(6), pages 707-719, December.
    18. James M. Bloodgood & Harry J. Sapienza & James G. Almeida, 1996. "The Internationalization of New High-Potential U.S. Ventures: Antecedents and Outcomes," Entrepreneurship Theory and Practice, , vol. 20(4), pages 61-76, July.
    19. Robert P. Garrett Jr. & Jeffrey G. Covin, 2015. "Internal Corporate Venture Operations Independence and Performance: A Knowledge–Based Perspective," Entrepreneurship Theory and Practice, , vol. 39(4), pages 763-790, July.
    20. Luís Cabral, 2018. "We’re Number 1: Price Wars for Market Share Leadership," Management Science, INFORMS, vol. 64(5), pages 2013-2030, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:entthe:v:23:y:1998:i:1:p:5-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.