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The role of operational capabilities in enhancing new venture survival: a longitudinal study
Kelley School of Business, Indiana University.
Kelley School of Business, Indiana University.
Kelley School of Business, Indiana University.
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Innovation and Design.ORCID iD: 0000-0003-3255-414X
2013 (English)In: Production and operations management, ISSN 1059-1478, E-ISSN 1937-5956, Vol. 22, no 6, p. 1401-1415Article in journal (Refereed) Published
Abstract [en]

We investigate relationships between operational capabilities and new venture survival. On the basis of operations management and entrepreneurship literature, we develop a contingency framework of operational capabilities especially appropriate at different life phases of a new venture's evolution. We expect that in the first years of a new venture's life, entrepreneurs should emphasize high inventory turnover to preserve working capital, support customer responsiveness, and aid firm adaptability. As new ventures grow, entrepreneurs should emphasize internal working capital generation via larger gross margins to support production ramp-up. Later, new venture entrepreneurs should emphasize employee productivity to buttress sustainable volume production. We analyze a 6-year longitudinal sample of 812 Swedish manufacturing new ventures using a gamma frailty-based Cox regression. The findings show that specific operational capabilities, while always supporting new venture survival, have exceptional influence in specific new venture life phases. The three hypotheses are confirmed, suggesting that higher inventory turnover, gross margin, and employee productivity further increase new venture survival likelihoods, respectively, in the venture's start-up, growth, and stability phases. This suggests a phased-capabilities approach to new venture survival. This study contributes to operations management and entrepreneurship theory and practice, and sets a foundation for future research on operations strategy for new ventures.

Place, publisher, year, edition, pages
2013. Vol. 22, no 6, p. 1401-1415
National Category
Other Engineering and Technologies not elsewhere specified
Research subject
Entrepreneurship and Innovation
Identifiers
URN: urn:nbn:se:ltu:diva-8806DOI: 10.1111/poms.12038ISI: 000327302200006Scopus ID: 2-s2.0-84888311419Local ID: 75ab7f1a-49e5-45fd-9c36-d2615c9b0ee9OAI: oai:DiVA.org:ltu-8806DiVA, id: diva2:981744
Projects
CiiR-Centre for Inter-Organizational Innovation Research
Note
Validerad; 2013; 20120627 (vinpar)Available from: 2016-09-29 Created: 2016-09-29 Last updated: 2018-07-10Bibliographically approved

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