This thesis is comprised of three essays dealing with the survival and growth of business enterprises. The first paper (Chapter 2) explores a long-standing question in corporate venture management: How closely should a corporate parent link itself with its own venture? We challenge the conventional view that autonomy is best for venture growth by arguing that access to the parent's resources and capabilities (i.e., a "tight fit") is essential if a venture is to demonstrate competitive advantage. Data from 97 Canadian corporate ventures generally support the "tight-fit" hypothesis. We also find empirical support for the proposition that the relationship between a corporate parent and its venture(s) evolves over time; economic ties diminish with venture maturity, relational ties remain intact. The next paper (Chapter 3) models the growth and decline of young firms as a function of their initial asset stocks, initial capabilities, rate of capability development, rate of asset depletion, and failure threshold. Data from 246 Canadian corporate bankruptcies confirm that young firms fail due to insufficient organizational capital at start-up and inadequacies in managerial knowledge, financial management skills, and marketing abilities. Older firms, on the other hand, are more prone to failure due to environmental change. The final paper (Chapter 4) utilizes detailed survey data from a proportionally stratified, representative sample of 3,000 Canadian firms to evaluate industry- and firm-level determinants of young firm growth. The competitive environment is found to be a poor predictor of the growth of young firms. In general, growth of the seven to ten year old firms in our study did not follow the growth trends of the industries in which they operated. Among firm strategies, innovation was the strongest predictor of revenue growth. Also of note was the finding that different types of managerial experience were significant in different sectors. For service firms, general management experience was positively associated with growth, while for goods-producing firms industry experience was a more important factor.

This thesis is comprised of three essays dealing with the survival and growth of business enterprises. The first paper (Chapter 2) explores a long-standing question in corporate venture management: How closely should a corporate parent link itself with its own venture? We challenge the conventional view that autonomy is best for venture growth by arguing that access to the parent's resources and capabilities (i.e., a "tight fit") is essential if a venture is to demonstrate competitive advantage. Data from 97 Canadian corporate ventures generally support the "tight-fit" hypothesis. We also find empirical support for the proposition that the relationship between a corporate parent and its venture(s) evolves over time; economic ties diminish with venture maturity, relational ties remain intact. The next paper (Chapter 3) models the growth and decline of young firms as a function of their initial asset stocks, initial capabilities, rate of capability development, rate of asset depletion, and failure threshold. Data from 246 Canadian corporate bankruptcies confirm that young firms fail due to insufficient organizational capital at start-up and inadequacies in managerial knowledge, financial management skills, and marketing abilities. Older firms, on the other hand, are more prone to failure due to environmental change. The final paper (Chapter 4) utilizes detailed survey data from a proportionally stratified, representative sample of 3,000 Canadian firms to evaluate industry- and firm-level determinants of young firm growth. The competitive environment is found to be a poor predictor of the growth of young firms. In general, growth of the seven to ten year old firms in our study did not follow the growth trends of the industries in which they operated. Among firm strategies, innovation was the strongest predictor of revenue growth. Also of note was the finding that different types of managerial experience were significant in different sectors. For service firms, general management experience was positively associated with growth, while for goods-producing firms industry experience was a more important factor. / Business, Sauder School of / Graduate

In seeking to account for variation in the performance of new and small firms entrepreneurship theory has experienced a shift away from approaches which attribute success to personal characteristics in favour of approaches emphasizing the social context of resource acquisition and mobilization. This study develops and tests a new theoretical model concerning relations between vision, support and new venture performance based on Sooklal's (1991) grounded theory of visionary leadership. In doing so, it addresses theoretical and methodological weaknesses associated with past efforts. Four stages of data collection were required to execute the study. Phases One and Two were used to develop the instrumentation for measuring entrepreneurial vision. Phase Three was a small-scale pilot study. Phase Four, the main component of the study, was utilized to test the research hypotheses. This final phase entailed semi-structured interviews with a random sample of 50 Newfoundland firms incorporated in 1993. Employing Wold's method of Partial Least Squares analysis, five of the nine hypotheses concerning relations amongst seven theoretical constructs were statistically significant. In general, there was strong support for the contribution of both vision and support in the theoretical model. Higher performance were found to be positively influenced by both vision reach (i. e. the "ambitiousness" of the vision) and the strength of received support. Increased support strength was associated with greater vision reach and greater diversity of value-based (i. e. without expectation of reciprocal benefit) and convenience-based (i. e. relationships based on economic exchange) supporters. Contrary to expectations, visions that focused on either internal or external dimensions were associated with greater insider and outsider supporter diversity. The relative importance of predictor constructs in the model was substantially different for urban versus rural firms. Overall, the model was found to possess useful predictive power. The results of the study indicate that vision and supporter diversity play an important role in the strength of support received by start-up entrepreneurs and that both entrepreneurial vision and the strength of received support contribute to new venture performance. In developing the measurement model for the research, many of the indicators for the theoretical constructs were either adapted from other disciplines or newly developed in the absence of pre-existing measures of vision and to overcome weaknesses associated with past "network" studies of support. This measurement model was found to possess satisfactory validity and provides a substantial base upon which further advancements can be made. Practitioners stand to benefit from the predictive power of the model and the insights the model provides concerning performance-enhancing start-up activities beyond the business plan.