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INTRODUCTION

The importance of resources in the creation and growth of new ventures is well documented in the Entrepreneurial area (Stevenson & Gumpert, 1985; Vesper, 1990). New organizations emerge when an entrepreneur identifies, assembles and configures resources (Meyer & Rowan, 1977; Gartner, 1985; Cole, 1965). Resources are one of the defining properties of new ventures, contributing to the "shaping" of the emerging organization (Katz & Gartner, 1988). Managerial judgment and decisions about resources will vary depending on the stage of business growth (Churchill & Lewis, 1983; Eggers, Leahy & Churchill, 1994), or crises encountered over the life cycle of the organization (Grenier, 1972). Changes in the organization, its structure, leaderships and policies, as well as key issues are well articulated in the life cycle literature (Scott & Bruce, 1987; Grenier, 1972; Churchill & Lewis, 1983). However, the role of particular resources is not as clear. While the need for additional capital, new facilities and employees are noted, resources are often treated in the aggregate, resources of different types and dimensions being bundled together.

On the other hand, growth is often predicated on managerial perceptions and expectations about specific resources (Penrose, 1959). Recent work has studied manager’s evaluations of resources and their relationships to performance over time, finding that certain types of resources vis a vis strategies can lead to above average performance over the business life cycle (Mosakowski, 1993). Relatedly, Chandler and Hanks (1994) found that companies with broad capabilities grew faster than those companies that did not. These studies show that resources have an important impact on growth and performance. However, it is not clear whether certain types of resources are more or less important at various phases of development.

Therefore, to better understand relationship between resources and the stage of development an examination of their combinations at various organizational ages is appropriate. The purpose of this paper is to analyze configurations of types of resources in new ventures based on age of the organization. This analysis examines the relative importance of five types of resources (human, social, organizational, physical and financial) at two stages of business development. The influence of owner/founder and organizational characteristics are considered. The following sections provide a brief overview of relevant literature, outline our methodology, present results, and offer conclusions and implications.

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