The Entrepreneurial Society
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The Entrepreneurial Society

How to Fill the Gap Between Knowledge and Innovation

Edited by Jean Bonnet, Domingo García Pérez De Lima and Howard Van Auken

This timely book analyzes the emergence of new firms in a broad context where economics, management and sociological approaches are joined. The market benefits of an entrepreneurial economy are evident in the new technology that has been made available to consumers over the past ten to twenty years. Entrepreneurial firms provide the market with innovations that create new products and, in turn, generate new employment and tax revenue, thus playing a critical role in surviving the economic crisis. The book explores diverse conditions that explain, permit and support entrepreneurship, allowing thinking outside the box and enhancing breakthrough innovations. At a time when new challenges are appearing regarding the ecological footprint, this is crucial.
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Chapter 8: Innovative Culture, Management Control Systems and Performance in Young SMEs

Domingo García Pérez De Lema and Antonio Duréndez


Domingo García Pérez De Lema and Antonio Duréndez 8.1 INTRODUCTION Research focus on young firms within the field of entrepreneurship is a common topic, due to the relevance and potential for growth, innovation and economic force (Biga et al., 2008). The analysis of young firms’ performance, principally growth, has received substantial empirical and theoretical attention (Steffens et al., 2006). Usually, young firms should be inside the period of expansion, so these firms are characterized by their ability to identify new business opportunities (Penrose, 1959). According to the knowledge-based view of the firm young firms accumulate knowledge through a learning process which constitutes the driving force for growth in order to achieve a sustainable competitive advantage. This is seen as the source of change and dynamism in society and the economy (McQuaid, 2002; Spender and Grant, 1996). Furthermore, young firms have cognitive learning advantages in entirely new markets because of fewer systemic rigidities (Autio et al., 2000). Another characteristic of young firms is they have several objectives, such us: maintaining autonomy, high-quality innovation, new opportunity detection and solid growth (Fischer and Reuber, 2004). Analysing young firms is particularly relevant due to the high level of failure this kind of firm shows (Brown et al., 1990; Philips and Kirchhoff, 1989). Previous economic research literature confirms that bankruptcy is inversely related to the age of the company (Audretsch and Mahmood, 1994; Dunne et al., 1988; Mata and Portugal, 1994; Philips and Kirchhoff, 1989). According to Henderson (1999) there are different...

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