The Life Cycle of New Ventures
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The Life Cycle of New Ventures

Emergence, Newness and Growth

Edited by Candida G. Brush, Lars Kolvereid, L. Øystein Widding and Roger Sørheim

The contributors to this book provide a cross-national comparison of venture emergence, newness and growth. Their chapters examine the influences of cultural, social and economic factors on venture development, compare the approaches of entrepreneurs who move from idea to emerging organization, and investigate acquisition and development of resources in growth and performance.
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Chapter 3: The USA and Norway: Empirical Evidence on Properties of Emerging Organizations

Tatiana S. Manolova, Linda F. Edelman, Candida G. Brush and Beate Rotefoss

Extract

3. The USA and Norway: empirical evidence on properties of emerging organizations Tatiana S. Manolova, Linda F. Edelman, Candida G. Brush and Beate Rotefoss INTRODUCTION A central activity in entrepreneurship is the creation of new organizations (Gartner, 1985; Low and Abramson, 1997; Aldrich, 1999). Organizations are defined as goal directed, boundary maintaining activity systems that emerge when entrepreneurs take the initiative to engage in founding activities (McKelvey and Aldrich, 1983; Gartner, 1985). While organization theory examines the development of exchange relationships, acquisition of legitimacy (Aldrich, 1999) and mobilization of resources (Scott, 1987) in existing or established organizations, there is considerably less research investigating the ways in which new organizations emerge or come into being (McKelvey and Aldrich, 1983; Aldrich, 1999; Gartner, 2001). Organizational formation is a dynamic process in which activities such as obtaining resources, developing products, hiring employees and seeking funds are undertaken at different times and in different orders (Gartner, 1985). Empirical studies find that more organizing activities improve survival chances (Carter et al., 1996; Lichtenstein et al., 2006), that new firm survival is enhanced when legitimacy building activities precede other types of organizing activities (Delmar and Shane, 2004) and that the concentration and timing of start-up activities impacts new firm formation (Lichtenstein et al., 2004). These studies build on Katz and Gartner’s (1988) well-regarded framework which explains organizational formation by outlining the properties of emerging organizations. Starting with the assumption that organizations emerge from the interaction between individuals and the environment, Katz and Gartner (1988) posit that...

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