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EXHIBIT 1 Punctuated Shifts in Resource Flows

Notice that the difference between this view and the life–cycle view is that the latter posits incremental growth, whereas a punctuated view offers a theory of discontinuous shifts followed by relatively stable structural and resource configurations in a firm. This is no small difference, for while managers seem to be able to say which stage they’re in when given descriptions of several stages (Churchill & Lewis, 1983; Eggers et. al., 1994), the life cycle model provides no trigger to identify why or when shifts in resources or stages should occur. Our integration, shown in Exhibit 1 above, offers a theoretical model for how a series of resource–acquiring configurations might occur (Penrose, 1959; Amit & Schoemaker, 1993).
These Resource–Based models—that new ventures strive to acquire necessary bundles of competencies and resources, and that these bundles shift over time—remain theoretical abstractions. The goal of this paper is to explore what actually are the salient organizational resources acquired by new ventures, an how does this composition change over time. What follows next is a discussion of an empirical method that is being used to explore these questions, and a preliminary analysis of results, as well as some conclusions and implications of the research.

RESEARCH METHODS

While numerous typologies of strategic resources have been theoretically derived (e.g. Penrose, 1959; Hofer & Schendel, 1978; Mosakowski, 1993; Dollinger, 1995; Brush & Greene, 1996), discovering empirically what the salient resources are and how they change is not so simple. Most entrepreneurs don’t segregate their growth strategies in theoretical categories, nor would we expect them to have a clear understanding of the RBT of the firm. Here a longitudinal, qualitative methodology was used to explore what are the salient organizational resources in entrepreneurial firms, and how these might change over time.

This research is part of a larger study on how new ventures actually make the transitions or shifts from one stage of development to the next (Lichtenstein, 1996). In that study the first author is tracking three new ventures whose entrepreneurs have described as being in transitions to their next stage of growth. In order to discover the micro–processes of the emergence process the researcher goes into these firms once a week, and asks a majority of organizational members a specific question relating to the resources, projects, issues, learning and changes that are occurring. The answers to this brief question are typed verbatim into a lap–top computer . The researcher’s typing speed is between 90 and 120 wpm, and numerous mistakes are spell–checked and corrected generally within the next day or two. At this point (mid–April) up to 42 weeks of qualitative data and 16 months of quantitative indicators have been collected from the three companies, including interviews totaling approximately 650 single–spaced pages of field notes.

Over the course of the research a brief question on resource acquisitions has been asked several times in each company. Specifically the researcher asked the following: “The question for this week is about resource acquisition. Taking the perspective of the organization as a whole, what are the resources that you have been acquiring or should be acquiring at this stage in the company’s development?” Follow–up questions were used to clarify meanings and test certain assumptions of the researcher and the participant. This question was repeated in one– or two–month intervals in each of the three companies. Exhibit 2 provides brief descriptions of the ventures and details of the data collected and analyzed for this paper.

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