Do new ventures benefit from strategic change or persistence? A behavioral perspective

Abstract

Purpose

Is change always the best alternative? While large and established firms are believed to benefit from strategic flexibility and change, the purpose of this paper is to argue and empirically prove that firms in emerging economies need to persist with their strategies during their formative years in order to acquire sustainable competitive advantage. The author explores these relationships from a behavioral perspective.

Design/methodology/approach

Data were collected from 103 Indian new ventures. Multiple linear regression analysis was applied to test the hypotheses.

Findings

The findings reveal that persisting with the existing strategies is the most optimal way of surviving and growing in the initial years of a venture operating in the turbulent business environments of emerging economies. Radical shifts in strategic postures can, indeed, be fatal for new firms.

Research limitations/implications

The findings are based on data from one emerging economy. Further exploration of these relationships in other setups can help in better understanding of the execution of strategic persistence and change.

Practical implications

Given the frequent changes in the business environment and resource-scarcity of new ventures in emerging economies, firms that persist with their strategies during the formative years are more likely to succeed.

Originality/value

Limited attempt has been made to integrate strategic and behavioral perspectives in the change literature. In this study, the author brings in the contingent role of founder’s personality to better understand the possible contingencies in the strategic change literature.

Citation

Batra, S. (2016), "Do new ventures benefit from strategic change or persistence? A behavioral perspective", Journal of Organizational Change Management, Vol. 29 No. 2, pp. 310-319. https://doi.org/10.1108/JOCM-02-2015-0028