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Even Dwarfs Started Small: Liabilities of Age and Size and Their Strategic Implications
Abstract
For older and newer firms, larger and smaller, there are strengths and weaknesses related to firm age and size. What may be a strength for one type is often a weakness for another. This analysis brings together the theoretical frameworks of population and organizational ecology and strategic management to examine the liabilities of firm age and size, and strategies each type of firm may use to overcome potential liabilities. The theoretical perspectives each focus on change, but at different levels of analysis – this study seeks to include both population and organizational change. It examines characteristics of older, larger firms and newer, smaller organizations that make change difficult or that cause the firm to face a volatile environment. Strategic implications of the liabilities of age and size are discussed. For smaller firms, for example, partnerships with other organizations can provide access to resources (and stability); for larger firms, partnerships can provide access to new technologies (and revitalization).
Supplementary resource (1)
... These are valuable resources necessary to grow international, particularly for small firms and new ventures (Coviello & Cox, 2006;Jones et al., 2011;Manolova et al., 2010;Rosenbaum, 2017): as small firms are usually resource-constrained, networks are a way to access the resources that are particularly costly and/or difficult to develop internally or to acquire through the market. In short, by participating in networks SMEs can overcome some difficulties that traditionally hinder their international growth: the liability of foreignness and outsidership (Zaheer, 1995;Johanson & Vahlne, 2009) and the liability of smallness (Aldrich & Auster, 1986). ...
Purpose
The purpose is to explore the existence of different export manager profiles in terms of managerial attributes and personal traits according to gender. The study aims to answer two research questions: (1) Do export manager profiles differ depending on gender? If so, (2) which are the traits or managerial attributes that differ by gender and which is the relationship among them?
Design/methodology/approach
The article relies on a quantitative empirical analysis of a sample of export managers of Spanish small and medium-sized enterprises (SMEs).
Findings
Our results point to the existence of gendered export manager profiles that differ in terms of objective managerial attributes, personal traits, managerial styles and subjective perceptions relative to discriminatory practices and detrimental stereotypes. Two gender-specific substitution effects exist: one between managers’ experiential skills and their formal education and the other between managers' entrepreneurial orientation and the use of relational networks.
Research limitations/implications
Our data are limited in terms of geographical scope and firms size; therefore, our results are no generalizable without new studies on this issue.
Practical implications
Our findings can help firms to understand the relevance of export teams that encompass different gender managers and benefit from the combination of diverse managerial attributes, personal traits and relational processes in their international growth.
Originality/value
Gender is an scarcely studied issue in international business and management literature despite its relevance in the international institutional context. This article addresses the gender aspect of export management.
... They seek ways to minimize expenses without compromising the quality of their products or services. This may involve the use of cheaper technology, economical workspace choices, or selecting costeffective marketing strategies (Aldrich et al., 1986). ...
This research aims to analyze bibliometric characteristics and trends of crowdfunding bootstrapping strategy articles indexed by Indonesian authors. Information was extracted from the Google Scholar database. The study employed bootstrapping and its variations as search terms, with Indonesian author affiliations considered. Simple statistical techniques were applied, and VOS Viewer software was utilized for bibliometric analysis. In this study, patterns of keyword co-occurrence, document citations, citation relationships, and bibliographic coupling were visualized. The results indicate that the main trend in current startup research is the adoption of bootstrapping strategy, particularly network-based bootstrapping, due to its ability to support startup growth without relying on external funding but rather on a network.
... They have little or no legitimacy vis-à-vis their stakeholders (e.g., Singh et al., 1986;Zimmerman & Zeitz, 2002). New venture firms suffer from the liability of smallness and the liability of newness (Aldrich & Auster, 1986;Gimenez-Fernandez et al., 2020). They are often constrained in terms of their resource endowments, such as funding or human resources (e.g., Katila & Shane, 2005;Zahra, 2021), and dependent on their founders and/or owners (e.g., Hashai & Zahra, 2022;Wasserman, 2017). ...
Managing relationships with new venture suppliers require the adaptation of supplier management practices and routines. This research builds upon the dynamic capabilities perspective to explicate the ability to partner effectively with new venture suppliers as a dynamic capability. We argue that new venture partnering capability (NVPC) encompasses sensing, seizing, and transforming capabilities. Firms with sensing capabilities can interpret new ventures' value propositions and then match them to the needs of their business units. Seizing capabilities allow firms to coordinate and develop the relationship with a new venture supplier to capture value. Transforming capabilities enable firms to adapt resources and reconfigure their sensing and seizing capabilities. Our findings suggest that firms accelerate the transformation and strengthen dynamic NVPCs by applying entrepreneurial behavior through high‐quality and regular interactions with new venture suppliers and embedding a dedicated new venture function. We also find that dynamic NVPCs can reside at different levels and that entrepreneurial managers can stimulate the development of organizational NVPCs. In general, we provide further empirical evidence on how buying firms can more effectively leverage the potential of new venture suppliers.
This paper investigates the impact of the regional environment on firm performance, focusing on a sample of 97,838 manufacturing firms in Italy. Utilizing multilevel modeling, the study reveals several key findings. First, the regional context explains approximately 10% of the variability in firm performance. Second, micro‐enterprises demonstrate lower performance levels compared to larger counterparts. Third, a more competitive regional environment is associated with higher firm performance across all sizes of firms. Importantly, micro‐enterprises tend to benefit relatively more in competitive regions, leading to a narrowing performance gap with larger firms. These findings underscore the importance of policy initiatives aimed at enhancing regional competitiveness, particularly in supporting micro‐enterprises to address their inherent weaknesses and improve overall performance.
Objective: This paper is a teaching case designed for graduate and undergraduate courses on subjects involving international business, international marketing, or international entrepreneurship. It describes how a small entrepreneurial company – Fumajet – could recognize and exploit an international opportunity, and the dilemmas its founders confronted regarding the choice of internationalization strategy and entry mode. Dilemma or problem: Faced with several potential alternatives to structure Fumajet’s international activities, the entrepreneurs had to analyze and select an international entry mode strategy to present to the recently created board of directors, following a significant infusion of capital into the company. Relevance/Originality: Grounded in real-life experiences, this case study draws from primary and secondary sources gathered over two years, presenting students with a real, practical, and relevant dilemma. By the end of this case study, students should be able to apply these learnings to real-world scenarios. The unique challenges portrayed make this case study particularly engaging and thought-provoking for students.
Emerging organizations confront heightened risks of failure, known as the “liability of newness”. Stinchcombe’s seminal work underscored new businesses’ challenges in establishing roles, incurring temporary inefficiencies, and building trust. This paper analyzes four integral elements underpinning newness liabilities that elevate failure likelihood: absence of ingrained organizational routines, legitimacy deficits from stakeholder connections, resource constraints across financing, assets and skills, and entrepreneurial inexperience hazards. While threats cannot be fully neutralized, purposeful actions enabling the strategic renewal of resources and routines can substantially enhance the odds of overcoming constraints that disproportionately imperil new ventures. The paper elucidates entrepreneurs’ challenges, empirics on elevated exit rates, and measures to foster sustainability when liabilities loom largest.
This chapter offers the key theoretical concepts that provide the basis of this book. I start by providing the conceptualization of legitimacy and organizational legitimacy and offering an excursus of the theoretical contributions of recent decades. I then link legitimacy with organizational sustainability and organizational change. Subsequently, I explain the concept of organizational learning and illustrate the transition from organizational learning to learning organizations. The chapter then focuses on value co-creation theory and its evolution in the academic debate, and introduces some models of value co-creation processes as well as the emerging “circular co-creation processes”. In each paragraph, I advance the main research gaps emerging from the extant literature, while in the last paragraph, I specifically highlight those gaps addressed in this book.
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