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    A NCL is taking shape.  Among other observables, the NCL is one in which conditions change rapidly and unpredictably (Cooper, 1996).  This NCL creates a number of challenging conditions (including those of uncertainty and discontinuities) for firms of all sizes—small, medium, and large.  The primary drivers of this NCL are the technological revolution and increasing globalization of markets (Bettis & Hitt, 1995; Hitt, Keats & DeMarie, 1998).  Clearly a product of multiple influences, it may be that the increasing sophistication and effectiveness of strategic thinking among those responsible for determining a firm’s direction and the actions intended to reach desired outcomes have contributed significantly to the globalization of  competitive markets (Ireland & Hitt, 1998).

    Although turbulent and challenging, there is also evidence of significant economic growth opportunities in this landscape.  In fact, conditions in the NCL, although sometimes seemingly hostile and intensely rivalrous, may yield significant product–driven growth possibilities (Zahra, 1993a).  The existence of growth opportunities in the NCL reaffirms Schumpeter’s (1934) argument that entrepreneurial efforts disrupt stability and create disequilibrium.  Entrepreneurship, in Schumpeter’s model, is a function primarily of the behavior of two groups—entrepreneurs and capitalists.  Entrepreneurs create new resource combinations in response to exogenous technical changes; capitalists provide resources to support the commercialization of the new resource combinations (Schumpeter, 1934; Shane, 1996b). Thus, high–growth entrepreneurial firms, the focus  of  the  study  reported  herein,  may  play a central role in the pursuit of the NCL’s market–based  opportunities  (Kirchhoff  &  Acs,  1997).   Additionally,  entrepreneuria  ventures,  perhaps especially new ones, are expected to play a major role in the development and growth of many  industries, particularly high–technology, in the NCL (Zahra, 1996).  Fulfilling this major role effectively, however, challenges entrepreneurial firms.  A key reason for this is that the NCL is creating additional managerial complexity for entrepreneurs.  This complexity results from the increasing number, variety, and interrelationships among tasks required to effectively and efficiently operate the entrepreneurial venture (Covin & Slevin, 1997).

    Thus, the disequilibrium present in the turbulent NCL affords both challenges and market opportunities.  To a degree, disequilibrium is created by continuous changes in the states of knowledge that are a part of a competitive environment (Jacobson, 1992).  The uncertainty that is created by market disequilibrium provides opportunities for entrepreneurial ventures (Dean, Meyer & DeCastro, 1993).  More specifically, uncertainty and disequilibrium open markets to new ideas and thus, to entrepreneurial activities.  In fact, this disequilibrium often levels the competitive playing field in markets for smaller, entrepreneurial firms, enabling them to compete against larger firms because the bigger firms’ advantages of size and scale are neutralized partially by disequilibrium and uncertainty (Hitt & Bartkus, 1997).  To pursue these opportunities successfully, entrepreneurial firms must be able to gather, evaluate, and utilize information and knowledge in competitively relevant ways (Jacobson, 1992).

Entrepreneurial Firms and the NCL

    Entrepreneurial firms, especially high–growth ones, have played a significant role in the development of the NCL.  For example, the largest 500 U.S. companies downsized their employment by three million workers in the 1980s and are expected to reduce employment by another two million by the end of the 1990s.  Moreover, it has been estimated that 85 percent of the Fortune 1000 firms have engaged in some degree of downsizing (McKinley, Sanchez & Schick, 1995).  Completed for a variety of reasons, the primary intent of many downsizing efforts is to develop a firm that is “lean and mean” (Hoskisson & Hitt, 1994).

    In contrast to their larger counterparts, existing entrepreneurial firms and entirely new ventures have created millions of jobs.  The founding of 1.5 million U.S. businesses during the 1980s, coupled with the creation of 18 million jobs in this decade, suggest the positive relationship between the efforts of entrepreneurial firms and the number of jobs in the U.S.  The trend toward establishment of a large number of new ventures continues in the 1990s.  In 1996 alone, approximately 170,000 new U.S. businesses were started.  Resulting from the foundings of these ventures was the creation of roughly 800,000 new jobs in a single year—1996 (Lynch, 1996). Lumpkin and Dess (1996) argue that the primary economic engine in the U.S. and many other nations is, in fact, entrepreneurial activity.  Merrifield (1993), who has suggested that “economic growth has been spectacular where entrepreneurship has been actively encouraged,” in countries such as the United States, Japan, South Korea, and Taiwan, supports the criticality of entrepreneurial activities as a driver of a nation’s economic growth.  Thus, there is increasing understanding of and support for the argument that entrepreneurship is linked importantly with employment growth, innovation, productivity growth, and income growth (Shane, 1996a, 1996b).

    While many entrepreneurial firms are born annually, a large number also die each year in countries throughout the world.  For example, research shows that annual rates of new firms entering the market average about 10.5 percent; however, the number of firms exiting a market on average is approximately 9.5 percent per year (Kirchhoff & Acs, 1997).  These data suggest that additional research on surviving firms should be conducted.  A primary purpose in conducting these studies would be to determine the actions linked to firm survival and effectiveness.  In particular, researchers’ interest should be focused on understanding these relationships in high–growth firms.  A key reason for this focus is evidence suggesting that HGEFs have a major effect on the U.S. economy.  To date, however, relatively little research has been completed that focuses on high–growth entrepreneurial ventures (Sexton & Smilor, 1997).  The purpose of this research is to examine the strategies employed by HGEFs to identify those that have the greatest effect on performance.  Isolation and interpretation of relationships between actions taken and their effects on financial performance in the high–growth entrepreneurial firm may help shape a blueprint for other entrepreneurial ventures.  In turn, because of its importance to economic growth, adhering to a valid “economic blueprint” could have a positive effect on a nation’s economy.

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