Making Lemonade out of Lemons: The Role of Information Processing and Strategy in Managing “Misperceived” Start-Ups

Mark Simon; Susan M. Houghton; G.T. Lumpkin

doi:10.1016/S1074-7540(07)10006-4

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Advances in Entrepreneurship, Firm Emergence and Growth

ISSN: 1074-7540
Series editor(s): Professor Jerome Katz and Professor Andrew C. Corbett

Subject Area: Enterprise and Innovation

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Making Lemonade out of Lemons: The Role of Information Processing and Strategy in Managing “Misperceived” Start-Ups

Document Information:
Title:	Making Lemonade out of Lemons: The Role of Information Processing and Strategy in Managing “Misperceived” Start-Ups
Author(s):	Mark Simon, Susan M. Houghton, G.T. Lumpkin
Volume:	10 Editor(s): G.T. Lumpkin, Jerome A. Katz ISBN: 978-0-7623-1429-4 eISBN: 978-1-84950-495-9
Citation:	Mark Simon, Susan M. Houghton, G.T. Lumpkin (2007), Making Lemonade out of Lemons: The Role of Information Processing and Strategy in Managing “Misperceived” Start-Ups, in G.T. Lumpkin, Jerome A. Katz (ed.) Entrepreneurial Strategic Processes (Advances in Entrepreneurship, Firm Emergence and Growth, Volume 10), Emerald Group Publishing Limited, pp.131-157
DOI:	10.1016/S1074-7540(07)10006-4 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	The entrepreneurs’ ability to identify opportunities can lead to wealth creation and competitive advantage. Often, however, opportunities that are innovative may defy up-front analysis suggesting that the entrepreneurs may have had somewhat inaccurate perceptions and need to refine their ideas after the ventures are started. This paper therefore focuses on mitigating the negative impact of early misperceptions through the use of learning-oriented information processing systems to refine opportunities post starting a venture. Specifically, it suggests that an experienced and heterogeneous top management team and a decentralized, organic structure enhance the system's ability to gain knowledge from acting on early misperceptions and may even form the basis for a distinctive capability that leads to competitive advantage.