Growth or Retrenchment Strategy Choices for Declining Entrepreneurial Firms: the Effects of Performance and Resources
نویسنده
چکیده
Growth has been described as the essence of entrepreneurship. Organizational ecologists theorize an inevitable progression from growth through maturity, revival, and eventually decline. During the organizational life cycle entrepreneurs choose between growth, stability, or retrenchment strategies to overcome deteriorating trends in performance. Using survey data, this study tests a contingency model of strategic choice for declining entrepreneurial firms in the U.S. Small Business Administration database. The results indicate entrepreneurs choose growth strategy when their perceptions of resource availability and past financial performance are both high and when both are low, indicating entrepreneurs remain aggressive when faced with adverse conditions.
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