Entrepreneurial Resourcefulness: Competing With Constraints: Volume 15

In this study we examine how resource-constrained organizations can maneuver for competitive advantage in highly institutionalized fields. Unlike studies of institutional entrepreneurship, we investigate competitive maneuvering by an organization that is unable to alter either the regulative or normative institutions that characterize its field. Using the “Moneyball” phenomenon and recent changes in Major League Baseball as the basis for an intensive case study of entrepreneurial actions taken by the Oakland A’s, we found that the A’s were able to maneuver for advantage by using bricolage and refusing to enact baseball’s cognitive institutions, and that they continued succeeding despite ongoing resource constraints and rapid copying of their actions by other teams. These results contribute to our understanding of competitive maneuvering and change in institutionalized fields. Our findings expand the positioning of bricolage beyond its prior characterization as a tool used primarily by peripheral organizations in less institutionalized fields; our study suggests that bricolage may aid resource constrained participants (including the majority of entrepreneurial firms) to survive in a wider range of circumstances than previously believed.

Entrepreneurial bricolage has been proposed as a method of alleviating resource constraints of entrepreneurial firms. However, the outcomes of bricolage for a firm may vary greatly. One of the most pressing issues is to clarify how bricolage may enhance firm growth. Based on case studies, Baker and Nelson (2005) propose that applying bricolage in limited areas (“selective bricolage”) may enable firms to grow, whereas excessive (“parallel”) bricolage may lead to the opposite outcome. However, the process of testing the generalizability of this relationship using quantitative methods has just begun. In this chapter, we describe our efforts to develop a scale that measures bricolage manifestation in firms by using the “environmental domains” of Baker and Nelson (2005) to facilitate quantitative testing of the bricolage–growth relationship.

This chapter explores the advantages of newness and positive aspects of resource constraints, critically departing from assumptions of resource constraints and liabilities of newness. The chapter is based on a multiple case study consisting of nascent entrepreneurial processes from inexperienced entrepreneurs with severely constrained access to resources. Six theoretical concepts (legitimacy, fashion, flexibility, networks, bootstrapping, and motivation) are developed in the frame of reference. Empirical data is collected on a rich variety of sources, including longitudinal data in the form of weekly logbooks, business plans, theoretical reflections, and additional collected data during the process. Based on this data, the analysis shows that while these entrepreneurs face resource constraints and liabilities of newness, they also use strategies to leverage their constraints and novelty as an advantage in advancing their venturing efforts.

Overconfidence in one’s entrepreneurial abilities is often assumed to motivate the behaviors of founders of high growth ventures. However, when founders encounter significant obstacles in the firm growth process, some begin to doubt their efficacy of their abilities to manage these growth processes successfully. In these circumstances, prior research suggests that such self-doubt creates significant cognitive constraints on an entrepreneur’s growth ambitions. Similar to other types of resource constraints, cognitive constraints are thought to impact firm performance outcomes negatively. Despite these claims, in this study, phenomenological analysis of the experiences of a group of entrepreneurs creating and managing high-growth ventures based largely in Silicon Valley suggests that a number of these entrepreneurs experience significant levels of self-doubt but still persist in growing their ventures. Yet current entrepreneurship theory provides limited guidance regarding how entrepreneurs overcome these self-doubts and persist in creating a new venture. To address these theoretical limitations, in this chapter, we examine the cognitive process through which entrepreneurs wrestle with self-doubt in order to overcome self-imposed, cognitive constraints on firm growth. Based on this analysis, we develop a process model using a unique sample of interviews with 27 high-tech, high-growth entrepreneurs who have received venture capital funding. This model suggests entrepreneurs overcome self-doubt by managing the emotional impact derived from the discrepancy between their ideal and actual selves. Furthermore, entrepreneurs engage in an active process of transforming negative mental states by leveraging their intentionality, engaging in forethought, taking consistent action, and relying on the support of others. Overall, we find that entrepreneurs display a high level of entrepreneurial agency when attempting to transform negative mental states in order to persist with their ventures. Implications of these findings for cognitive theories of entrepreneurial action are discussed.

This chapter focuses on how corporate entrepreneurs seize opportunities and deal with threats through resource acquisition, control, and use. When corporate entrepreneurs fail to gain control of preferred resources they must rely on their ability to optimize their use of resources on hand in order to avoid the typical limitations inherent in a constrained set of resources. However, control of resources, whether existing or supplementary, by itself is an insufficient basis for influencing performance. Performance also depends on an organization’s capacity to deploy resources in combination with strategically important organizational processes to affect a desired end. The way in which corporate entrepreneurs utilize their resources is likely to have a more significant effect on performance than is merely having control of them. The current research aims to elaborate on how corporate entrepreneurs can become more resourceful by using a vacillation approach to resource acquisition and utilization. In this context, vacillation is movement between exploration and exploitation, or knowledge acquisition and knowledge integration from a knowledge management perspective. Vacillation is distinguished from the “balance” hypothesis prevalent in the organizational ambidexterity literature. A balance hypothesis states that both exploration and exploitation may be pursued simultaneously either by creating structural or contextual organizational ambidexterity. Here, we explain how vacillation enables an organization’s corporate entrepreneurship posture to lead to improved performance. In this chapter, we first describe the extant literature and construct relationships between corporate entrepreneurship posture, organizational resource level, vacillation, and organizational performance. We then analyze the learning processes associated with vacillation and discuss the research and managerial implications associated with the proposed relationships.

In this chapter, we advance an understanding of entrepreneurial resourcefulness in relation to context by focusing on challenging and sometimes outright hostile environments and the way they shape, and are shaped by, entrepreneurial resourcefulness. Drawing on selective evidence from several projects in post-socialist countries in both Central and Eastern Europe and Central Asia and other published research covering these countries, we argue for contextualized conceptualizations of resourcefulness. More specifically we emphasize that temporal, historical, socio-spatial, and institutional contexts are antecedents and boundaries for entrepreneurial behavior, while at the same time allowing for human agency. This is visible in individuals’ actions to negotiate, reenact, and cross these boundaries, and as a result, intentionally or inadvertently contributing to changing contexts. We suggest that resourcefulness is a dynamic concept encompassing multiple practices, which change over time, and it results from a close interplay of multiple contexts with entrepreneurial behavior. We also propose that from a theoretical point of view, resourcefulness not only needs to be contextualized, but it also needs to be explored together with its contextual outcomes – the value it creates and adds at different levels of society.

As a critical component in the entrepreneurial process, knowledge is essential to the study of how entrepreneurs compete under constraints. Research in this area is challenged by the unobservable and imprecise nature of knowledge which inhibits advanced theory building and testing, and we explore this problem by analyzing the relationship between the entrepreneurial process, constraints to the process, and knowledge flows. We apply and extend a systems-theoretic framework that identifies the knowledge system in entrepreneurial organizations, and develop an integrative model to guide future research.