Summary of Results

None of the hypotheses are supported for the analysis on the overall financial returns to the entrepreneur. Partial support for the hypothesized model of strategy implementation is obtained, however, with respect to the subjective measure of the entrepreneur's performance. Entrepreneurs who have particular approaches to control and who pursue particular types of competitive strategies report greater improvement in their overall satisfaction with their businesses. In particular, for entrepreneurs pursuing a low-cost strategy, a high emphasis on behavior control and a low emphasis on outcome control results in significantly higher performance levels. Results also show that, irrespective of the performance measure employed, entrepreneurs who are not prone to use either form of motivation do perform significantly worse. Furthermore, results support the conclusion that only control strategies that trade-off higher emphasis on behavior control for lower emphasis on outcome control should be considered viable motivational strategies for entrepreneurs. Approaches that do not place enough emphasis on either of these two forms, or approaches that place a large emphasis on both of them, should not be used.


Implications for Research

Evidence provided by the present study suggests that generally accepted frameworks of strategy implementation are not totally generalizable to the new venture start-up context. As suggested by different authors, tight control on the part of the entrepreneur plays a critical role for the venture during the start-up phase. The organization's need for a hands-on leader during start-up might offset the motivational benefits of employing outcome-based forms of control in the presence of low task programmability.


Implications for Practice

Several implications for practitioners can be derived from this study. Start-up entrepreneurs should pay attention to their control practices as they have performance implications. Results indicate that a third of the entrepreneurs of the sample are prone to employ non-viable control strategies (i.e., control strategies that are suboptimal under any circumstance). Particularly worrying is the trend to employ both behavior and outcome control devices simultaneously (28 % of the sample). Entrepreneurs should be advised about the negative performance implications of such practices. Also, results confirm that start-up entrepreneurs pursuing a cost advantage should use very close supervision, should not delegate decision making, and should compensate their employees with fixed salaries only. Behavior forms of control should still be considered by start-up entrepreneurs pursuing differentiation strategies, but whenever possible the entrepreneur should try to delegate decision-making and to provide opportunities for pay-for-results schemes.



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