Firm - Environment Alignment of Entrepreneurial Opportunity Exploitation in Technology-based Ventures: A Configurational Approach

Esin Yoruk, Paul Jones

    Research output: Contribution to journalArticlepeer-review

    22 Citations (Scopus)
    334 Downloads (Pure)

    Abstract

    This study explores configurations for firm-environment alignment of entrepreneurial opportunity exploitation in technology-based ventures to explain firm performance. Classifying entrepreneurial opportunities by their source and location as technology driven and market driven, we develop a framework to investigate a multitude of factors in the firm and in the environment that influence firm performance only when aligned with each other. The study examines technology-based ventures using fuzzy-set qualitative comparative analysis. Our results highlight the presence of complete firm-environment alignment of technological and market opportunity exploitation in cases with very high organizational growth rates. High-growth cases are driven by market opportunity exploitation. Firm-environment misalignment characterizes low-growth cases. Our results extend entrepreneurial opportunity exploitation literature to encompass a configurational setting from a quality perspective and provides entrepreneurs, managers, and policy-makers with informed choices of alternative growth strategies when focusing on organizational and policy priorities.

    Original languageEnglish
    Pages (from-to)612-658
    Number of pages47
    JournalJournal of Small Business Management
    Volume61
    Issue number2
    Early online date21 Sept 2020
    DOIs
    Publication statusPublished - 2023

    Bibliographical note

    This is an Accepted Manuscript version of the following article, accepted for publication Journal of Small Business Management. Yoruk, E & Jones, P 2020, 'Firm - Environment Alignment of Entrepreneurial Opportunity Exploitation in Technology-based Ventures: A Configurational Approach', Journal of Small Business Management, vol. (In-press), pp. (In-press). https://doi.org/10.1080/00472778.2020.1800354

    It is deposited under the terms of the Creative Commons Attribution-NonCommercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

    Funding

    High growth configurations 2a and 2b are driven by firm-environment alignment of market opportunity exploitation and exemplified by niche entrepreneurial firms. ENTNICHE enjoys both domestic and foreign markets. It first established itself successfully in the local niche market and was able to move onto foreign markets. INTNICHE operates in domestic markets. Its market success stems from its timely response to sophisticated and performance-conscious buyers and good management of high-level market competition. It shows an aggressive approach to bank loans, public loans, and European Union (EU) funds. Seizing external funding complements its internal funding capacity. It is constrained in technological opportunity exploitation. ENTNICHE grew 10 percent and doubled its workforce, and shows strong commitment in innovation activities by introducing five new-to-country innovations, one patent, and one trademark. Its endogenous technology generation efforts outperform locally available opportunities, but miss out on the government\u2019s procurement of advanced products and R&D tax incentives offered to SMEs. Overall, 17 percent of employees hold university degrees and they continuously take part in R&D projects; however, ENTNICHE\u2019s failure to exploit skills-related opportunities in the environment, particularly local training services, might play role in not being able to provide effective on-the-job training and ensure that the employees stay in the firm. It is connected with its suppliers and customers, but only focues on arm\u2019s length and unidirectional relationships in technical support and licensing agreements. INTNICHE grows at high rates, 17 percent in sales and 27 percent in employment. A radical break off from the routine technological activity in an established firm is difficult. Therefore, INTNICHE exploits technological opportunities in the environment based on its prior knowledge by focusing on government procurement of advanced technology products and R&D tax incentives. It has no patents, but one trademark and eight new-to-firm innovations. Absence of endogenous technological skills is compensated by opportunities exploited in the environment; that is, value chain networking, the education system in recruiting skills, and availability of specialized research and employee training services. Supported by the already existing networks, INTNICHE can engage in research contract-out relationships with domestic partners. Its networking capabilities are strengthened by its location, an industrial cluster, which makes it easier to connect to relevant partners. This work was supported by the Seventh Framework Programme [290657]. Funding received from the European Union\u2019s Seventh Framework Programme (FP7/2007-2013/Project Nr. 290657) under grant agreement \u201CGrowth-Innovation-Competitiveness: Fostering Cohesion in Central and Eastern Europe\u201D (GRINCOH) is gratefully acknowledged. We benefited from discussions with participants at the GLOBELICS and British Academy of Management 2017 conferences. The first author would also like to thank Tomasz Mickiewicz, Slavo Radosevic, Iciar Dominguez Lacasa, and Venkat Venkatraman for their helpful comments on earlier drafts of this article.

    FundersFunder number
    Seventh Framework Programme290657

      Keywords

      • Entrepreneurship
      • entrepreneurial opportunities
      • qualitative comparative analysis

      ASJC Scopus subject areas

      • General Business,Management and Accounting
      • Strategy and Management
      • Management of Technology and Innovation

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