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Full Steam Ahead or Abandon Ship? An Empirical Investigation of Complete Pivot Decisions

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  • Matthew S. Wood
  • Leslie E. Palich
  • Russell E. Browder

Abstract

New products or services often misalign with customer preferences, and sometimes these initial offerings must be abandoned and replaced. Factors influencing these “complete pivot” decisions are poorly understood. We use behavioral decision theory to develop a theoretical model of pivot decisions that tests our predictions via a conjoint analysis experiment. We find that magnitude of the miss (revenues compared to plan), length of the runway (cash available/burn rate), and attribution for the miss (reason for customer misreads) significantly influence complete pivot decisions, and we simultaneously consider interactions. Individual grit and impulsiveness also shape the effects of some attributes.

Suggested Citation

  • Matthew S. Wood & Leslie E. Palich & Russell E. Browder, 2019. "Full Steam Ahead or Abandon Ship? An Empirical Investigation of Complete Pivot Decisions," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(4), pages 1637-1660, October.
    • Handle: RePEc:taf:ujbmxx:v:57:y:2019:i:4:p:1637-1660
    DOI: 10.1111/jsbm.12437
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    Cited by:

    1. Vatankhah, Sanaz & Bamshad, Vahideh & Altinay, Levent & De Vita, Glauco, 2023. "Understanding business model development through the lens of complexity theory: Enablers and barriers," Journal of Business Research, Elsevier, vol. 155(PA).
    2. Stratos Ramoglou & William B. Gartner, 2023. "A Historical Intervention in the “Opportunity Wars†: Forgotten Scholarship, the Discovery/Creation Disruption, and Moving Forward by Looking Backward," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1521-1538, July.
    3. Angus, Ryan W. & Houghton, Jeffery D. & Neck, Christopher B. & Kip Holderness Jr., D., 2024. "Who responds to critical feedback? The effects of self-leadership on entrepreneurial product pivoting behavior," Journal of Business Research, Elsevier, vol. 172(C).
    4. Maria Elisavet Balta & Thanos Papadopoulos & Konstantina Spanaki, 2024. "Business model pivoting and digital technologies in turbulent environments," Post-Print hal-04513406, HAL.

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