SCALE BARRIERS AND GROWTH OPPORTUNITIES: A RESOURCE-BASED MODEL OF NEW VENTURE EXPANSION

Lois M. Shelton

41 citations0/0 files storedJournal of Enterprising Culture

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Entrepreneurship Studies and Influences Innovation and Knowledge Management Firm Innovation and Growth

Abstract

The concept of scale barriers is introduced to shed light on new venture growth. Growth is a process of overcoming resource deficiencies, or scale barriers, resulting from the liabilities of newness and smallness. New ventures employ a variety of resource accumulation strategies to surmount three types of barriers - competitive deficiencies, management and organizational deficiencies, and financial deficiencies. A theoretical model shows how environmental munificence and industry conditions influence barrier size while resource accumulation strategies and initial venture endowments determine a venture's ability to overcome these barriers. The difficulties of growth are illustrated as an extension of the difficulties of survival.

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References

1991Firm Resources and Sustained Competitive Advantage 1993Strategic assets and organizational rent 1989Asset Stock Accumulation and Sustainability of Competitive Advantage 1989Strategic management of small firms in hostile and benign environments 1961The achieving society.1956Barriers to New Competition 2001Cultural entrepreneurship: stories, legitimacy, and the acquisition of resources 1994Initial human and financial capital as predictors of new venture performance

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