Is business planning useful for the new venture emergence? Moderated by the innovativeness of products
ISSN: 1750-614X
Article publication date: 19 September 2018
Issue publication date: 10 October 2018
Abstract
Purpose
The purpose of this paper is to build a research model to examine the effects of business planning on the new venture emergence, as well as to examine the moderating effects of innovativeness of products.
Design/methodology/approach
Four hypotheses are put forward and examined by hierarchical binary logistic regression. The data of this paper are based on the first two waves of data from Chinese Panel Study of Entrepreneurial Dynamics project.
Findings
Results show that engaging in business planning has a positive effect on the new venture emergence, and the timing of business planning does not affect the new venture emergence significantly. This study also finds that the innovativeness of products has a positive moderating effect on the relationship between the timing of business planning and the new venture emergence.
Research limitations/implications
This study has some limitations. The innovativeness of products is measured by a single indicator, which may not completely reflect the meaning of the attribute. Moreover, this study explores new ventures only in the nascent stage.
Practical implications
The study is useful for entrepreneurs to realize the importance of business planning. First, engaging in business planning in early start-up stage is a very valuable activity, because business planning can help new ventures reduce the loss caused by trial and error learning. Second, engaging in business planning is more likely to ensure high innovative products quickly be accepted by the market. Because in the process of new venture emergence, the legitimacy signal to stakeholders can be transmitted and new products can be promoted to get support and recognition from stakeholder through the business plan.
Originality/value
This paper focuses on the early stage of new venture life cycle and the contextual factors to explore the influence of business planning on the new venture emergence under the logic of legitimacy. This paper could enrich business planning research from the perspective of legitimacy theory by inspiring scholars to focus on the differences between new ventures and mature enterprises and to offer proposals of legitimation strategies suitable for new ventures. Meanwhile, this study contributes to the understanding of the contextual factors of business planning. And it discusses the impact of the attribute in business planning on the new venture emergence, which helps scholars to get a deep thought about the value of business planning in entrepreneurial process.
Keywords
Acknowledgements
The authors would like to thank The Research Center of Entrepreneurship of Nankai University for supporting CPSED and the reviewers for their valuable comments. Gratitude is also extended to all authors of literatures cited in this article.
Funding: This research was supported by the National Natural Science Foundation of China (Nos. 71772055, 71532005, 71672146 and 71672091), Humanities and Social Sciences of Ministry of Education Planning Fund of China (No. 17YJA630067) and the Philosophy and Social Science Training Program of Hefei University of Technology (No. JS2017HGXJ0033).
Citation
Wei, Y.-l., Long, D., Li, Y.-k. and Cheng, X.-s. (2018), "Is business planning useful for the new venture emergence? Moderated by the innovativeness of products", Chinese Management Studies, Vol. 12 No. 4, pp. 847-870. https://doi.org/10.1108/CMS-10-2017-0315
Publisher
:Emerald Publishing Limited
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