Linking resource acquisition and development processes to resource-based advantage : bricolage and the resource-based view

We investigate the relationship between bricolage – an approach to a firm’s resource development – and the firm’s strategic resource position as depicted by the resource-based view (RBV). The RBV is concerned with the resource characteristics of firms that lead to sustainable competitive advantage. Alternatively, bricolage is a process of resource use and development characterised by using resources at hand, recombining resources and making do. Based on a sample of approximately 700 nascent and 700 young firms we find that higher levels of bricolage behaviour tend to lead to more advantageous strategic resource positions.

Linking resource acquisition and development processes to resource-based advantage : bricolage and the resource-based view

We investigate the relationship between bricolage – an approach to a firm’s resource development – and the firm’s strategic resource position as depicted by the resource-based view (RBV). The RBV is concerned with the resource characteristics of firms that lead to sustainable competitive advantage. Alternatively, bricolage is a process of resource use and development characterised by using resources at hand, recombining resources and making do. Based on a sample of 1,329 entrepreneurial start-ups we find that higher levels of bricolage behaviour tend to lead to more advantageous strategic resource positions.

Entrepreneurial bricolage : towards systematic empirical testing

The behavioral theory of “entrepreneurial bricolage” attempts to understand what entrepreneurs do when faced with resource constraints. Most research about bricolage, defined as “making do by applying combinations of the resources at hand to new problems and opportunities” (Baker & Nelson 2005: 333), has been qualitative and inductive (Garud & Karnoe, 2003). Although this has created a small body of rich descriptions and interesting insights, little deductive theory has been developed and the relationship between bricolage and firm performance has not been systematically tested. In particular, prior research has suggested bricolage can have both beneficial and harmful effects. Ciborra’s (1996) study of Olivetti suggested that bricolage helped Olivetti to adapt, but simultaneously constrained firm effectiveness. Baker & Nelson (2005) suggested that bricolage may be harmful at very high levels, but more helpful if used judiciously. Other research suggests that firm innovativeness may play an important role in shaping the outcomes of bricolage (Anderson 2008). In this paper, we theorize and provide preliminary test of the bricolage-performance relationship and how it is affected by firm innovativeness.

Venture creation and resource processes : using Bricolage sustainability ventures

Principal Topic: Resource decisions are critical to the venture creation process, which has important subsequent impacts on venture creation and performance (Boeker, 1989). Most entrepreneurs however, suffer substantial resource constraints in venture creation and during venture growth (Shepherd et al., 2000). Little is known about how high potential, sustainability ventures (the ventures of interest in this research), despite resource constraints, achieve continued venture persistence and venture success. One promising theory that explicitly links to resource constraints is a concept developed by Levi Strauss (1967) termed bricolage. Bricolage aligns with notions of resourcefulness: using what's on hand, through making do, and recombining resources for new or novel purposes (Baker & Nelson 2005). To the best of our knowledge, previous studies have not systematically investigated internal and external constraints, their combinations, and subsequent bricolage patterns. The majority of bricolage literature focuses on external environmental constraints (e.g. Wieck 1989; Baker & Nelson 2005), thereby paying less attention to in evaluating internal constraints (e.g. skills and capabilities) or constraint combinations. In this paper we focus on ventures that typically face resource-poor environments. High potential, nascent and young sustainability ventures are often created and developed with resource constraints and in some cases, have greater resource requirements owing to higher levels of technical sophistication of their products (Rothaermel & Deeds 2006). These ventures usually have high aspirations and potential for growth who ''seeks to meet the needs and aspirations without compromising the ability to meet those of the future'' (Brundtland Commission 1983). High potential ventures are increasingly attributed with a central role in the development of innovation, and employment in developed economies (Acs 2008). Further, increasing awareness of environmental and sustainability issues has fostered demand for business processes that reduce detrimental environmental impacts of global development (Dean & McMullen 2007) and more environmentally sensitive products and services: representing an opportunity for the development of ventures that seek to satisfy this demand through entrepreneurial action. These ventures may choose to ''make do'' with existing resources in developing resource combinations that produce the least impact on the environment. The continuous conflict between the greater requirements for resources and limited resource availability in high potential sustainable ventures, with the added complexity of balancing this with an uncompromising focus on using ''what's on hand'' to lessen environment impacts may make bricolage behaviours critical for these ventures. Research into bricolage behaviour is however, the exception rather than the rule (Cunha 2005). More research is therefore needed to further develop and extend this emerging concept, especially in the context of sustainability ventures who are committed to personal and social goals of resourcefulness. To date, however, bricolage has not been studied specifically among high potential sustainable ventures. This research seeks to develop an in depth understanding of the impact of internal and external constraints and their combinations on the mechanisms employed in bricolage behaviours in differing dynamic environments. The following research question was developed to investigate this: How do internal, external resource constraints (or their combinations) impact bricolage resource decisions in high potential sustainability ventures? ---------- Methodology/Key Propositions: 6 case studies will be developed utilizing survey data from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) large-scale longitudinal study of new venture start-ups in Australia. Prior to commencing case studies, 6 scoping interviews were conducted with key stakeholders including industry members, established businesses and government to ensure practical relevance in case development. The venture is considered the unit of analysis with the key informant being the entrepreneur and other management team members where appropriate. Triangulation techniques are used in this research including semi-structured interviews, survey data, onsite visits and secondary documentation website analysis, resumes, and business plans. These 6 sustainability ventures have been selected based on different environmental dynamism conditions including a traditionally mature market (building industry) and a more dynamic, evolving industry (renewable energy/solar ventures). In evaluating multidisciplinary literature, we expect the following external constraints are critical including: technology constraints (seen through lock-in of incumbents existing technology), institutional regulation and standards, access to markets, knowledge and training to nascent and young venture bricolage processes. The case studies will investigate internal constraints including resource fungability, resource combination capabilities, translating complex science/engineering knowledge into salient, valuable market propositions, i.e. appropriate market outcomes, and leveraging relationships may further influence bricolage decisions. ---------- Results and Implications: Intended ventures have been identified within the CAUSEE sample and have agreed to participate and secondary data collection for triangulation purposes has already commenced. Data collection of the case studies commenced 27th of May 2009. Analysis is expected to be completed finalised by 25th September 2009. This paper will report on the pattern of resource constraints and its impact on bricolage behaviours: its subsequent impact on resource deployment within venture creation and venture growth. As such, this research extends the theory of bricolage through the systematic analysis of constraints on resource management processes in sustainability ventures. For practice, this research may assist in providing a better understanding of the resource requirements and processes needed for continued venture persistence and growth in sustainability ventures. In these times of economic uncertainty, a better understanding of the influence on constraints and bricolage: the interplay of behaviours, processes and outcomes may enable greater venture continuance and success.

The role of bricolage and resource constraints in high potential sustainability ventures

Sustainability decisions and their impacts may be among the greatest challenges facing the world in the 21st century (Davos 2000). Apart from adaptation on the part of established organizations these challenges are arguably going to require solutions developed by new actors However, young ventures have only recently begun generating research interest within sustainability literature (Shepherd et al. 2009). In particular, little is known about resource behaviours of these ventures and how they adapt to substantial resource constraints. One promising theory that has been identified as a way that some entrepreneurs manage constraints is bricolage: a construct defined as “making do by applying combinations of the resources at hand to new problems and opportunities” (Baker and Nelson 2005: 333). Bricolage may be critical as the means of continued venture success as these ventures are frequently developed in severe resource constraint, owing to higher levels of technical sophistication (Rothaermel and Deeds 2006). Further, they are often developed by entrepreneurs committed to personal and social goals of resourcefulness, including values that focus on conservation rather than consumption of resources (Shepherd et al. 2009). In this paper, using seven novel cases of high potential sustainability firms from CAUSEE we consider how constraints impact resource behaviours and further illustrate and extend bricolage domains previously developed by Baker and Nelson (2005) with recommendations for theory and practice provided.

Betting on the underdog : bricolage as an engine of resource advantage

Resource-based theory posits that firms achieve high performance by controlling resources that are rare, valuable and costly for others to duplicate or work around. Yet scholars have been less successful understanding processes and behaviours by which firms develop such resources. We draw on the behavioral theory of bricolage from the entrepreneurship literature to suggest one such mechanism by which firms may develop such resource-based advantages. The core of our argument is that idiosyncratic bundling processes synonymous with bricolage behavior may create advantageous resource positions by (i) allowing resource constrained firms to allocate more of their limited resources to activities that they view as more strategically important, and (ii) increasing the difficulties other firms face in trying to imitate these advantages. Based on this reasoning we develop several hypotheses which we test in the context of several samples from a large, longitudinal, Australian study of new firm development. The results support our arguments that bricolage will improve a firms’ overall resource positions while generating more areas of strong resource advantage and fewer areas of strong resource disadvantage. We find little support, however, for our arguments that bricolage will make a firms’ key resource advantages more difficult for other firms to imitate. We find some support for our argument that the role of bricolage in creating resource advantages will be enhanced by the quality of the opportunity with which a firm is engaged.

Entrepreneurial bricolage and firm performance : moderating effects of firm change and innovativeness

The behavioral theory of “entrepreneurial bricolage” attempts to understand what entrepreneurs do when faced with resource constraints. Prior research suggests that bricolage behaviors enable firms to “make do” through recombining existing resources and may assist in the development of firms that are better able to manage market uncertainties, survive and perhaps even flourish despite resource constraints. Using a new survey measure we further theorize and test the moderating effects of firm strategic change and innovativeness on bricolage and firm performance. Our findings suggest that changes in core elements of the business and degree of innovation reduce the positive effects of bricolage in young firm performance.

Resource constraints in innovation : the role of bricolage in new venture creation and firm development

The emerging theory of ‘bricolage’ as a resource behaviour represents an attempt to address the central entrepreneurship research problem of making systematic sense of entrepreneurs that sometimes manage to create significant new economic activity under what appears to be severe resource constraints (Baker & Nelson 2005). However, despite growing interest in bricolage there is little large scale empirical evidence about the effectiveness and outcomes of using bricolage processes while developing innovative outcomes in nascent and young firms. In this research we test bricolage using different forms of innovation using data from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) project. Our results indicate overall positive results of bricolage with all forms of innovativeness. A discussion of the results and recommended future research is provided.

Bricolage as a path to innovation for resource constrained new firms

Evidence suggests that both start-up and young firms (henceforth: new firms) – despite typically being resource-constrained – are sometimes able to innovate (Katila & Shane 2005). Such firms are seldom able to invest in expensive innovation processes, which suggests that they may rely on other pathways to innovation. In this paper, we test arguments that “bricolage,” defined as making do by applying combinations of the resources at hand to new problems and opportunities, provides a pathway to innovation for new firms. Our results suggest that variations in bricolage behaviors can provide an explanation of innovation under resource constraints by new firms.

Competing through service innovation : the role of bricolage and entrepreneurship in project-oriented firms

The criticality of service innovation in building and sustaining competitive advantage is gaining increasing recognition in the marketplace. Using empirical data from US and Australian project-oriented firms, the study uses a multi-staged multi-method research program to demonstrate how entrepreneurial service firms strategically combine resources at hand (bricolage) to innovate and stay ahead of rivals. The research shows that service entrepreneurship (SE) and bricolage influence two forms of service innovation (interactive and supportive), which in turn is associated with sustained competitive advantage (SCA). The results suggest that SE and bricolage indirectly relate to SCA through service innovation. The findings offer novel insights into how project-oriented service firms engage in innovation. In short, the findings encourage the “making do by combining resources at hand” as higher levels of entrepreneurial bricolage are associated with higher levels of interactive and supportive innovation enabling SCA, suggesting a new model.

Waving or drowning? Managing resource constraints in entrepreneurial firm with bricolage as a response to the global financial crisis

These are challenging times for new entrepreneurial firms. The development of the Global Financial Crisis shook the very foundations of global markets and institutions that most firms relied on to do business (Claessens, et al., forthcoming). In the midst of institutional flux and resource constraints, entrepreneurial firms, which have been shown to make a range of contributions to the economy (van Praag & Versloot 2007) faced increasing constraints. The Australian Federal Government quickly implemented the Green Loan program in response to the financial crisis. Unfortunately, the green loans program was flawed with obsolete processes and information (Faulkner, 2011), further constraining new firms. Prior research provides few clues regarding how resource-constrained entrepreneurial firms deal with these institutional flaws within institutional change and how they might overcome these challenges and prosper. One promising theory that evaluates behavioural responses to constraints and institutional flaws is bricolage (Levi Strauss, 1967). Bricolage aligns with notions of resourcefulness: defined here as “making do by applying combinations of the resources at hand to new problems and opportunities” (Baker and Nelson 2005: 333). Using three case studies, we consider how institutional flaws impact firm behaviours and illustrate the use of bricolage in attempts to reinforce, shape and change the GL program further extending bricolage domains of Baker and Nelson (2005).

ACE research vignette 021 : does the use of “bricolage” make start-ups more innovative?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. In this vignette, Professor Per Davidsson and Associate Professor Paul Steffens consider the links between entrepreneurial “bricolage” and innovation.

Intrapreneurial bricolage: a contradiction in terms or useful construct?

This paper addresses the ambiguous relationship of internal, organizationa social capital and external social capital with corporate entrepreneurship performance. Drawing on social construction theory we argue that bricolage can mitigate some of the negative effects associated with social capital by recombining and redefining the purpose of available resources. We investigated our hypotheses through a random sample of 206 corporate entrepreneurship projects. We found that both internal and external social capital have no direct effect on performance of corporate entrepreneurship projects. The results indicate that bricolage mediates the relationship between social capital and performance of corporate entrepreneurship projects. Bricolage thrives in particularly when there is wide availability of social capital internal and external to the organization. The implications are that bricolage is a critical behavior in allowing corporate entrepreneur projects to benefit from resources available through their network of social relations inside and outside the company.

Born unfinished : boundaries of bricolage effectiveness

In this paper, we present initial results of an inductive, longitudinal case study of four firms that applied bricolage behaviors during resource constraints in firm emergence. Building on these cases, we discuss and extend existing research in bricolage theories by investigating how bricolage enables or hinders progress within firm creation. We explore the factors that places limits on the use of bricolage effectiveness during emergence. Specifically, in this paper, we discuss the impact of commitment and attention on bricolage effectiveness and how these influences may shape attempts to further progress and continue despite the resource constraints entrepreneurs often face in venture creation processes.

Bricolage as a path to innovativeness for resource constrained new firms

Evidence suggests that both nascent and young firms (henceforth: “new firms”)—despite typically being small and resource-constrained—are sometimes able to innovate effectively. Such firms are seldom able to invest in lengthy and expensive development processes, which suggests that they may frequently rely instead on other pathways to generate innovativeness within the firm. In this paper, we develop and test arguments that “bricolage,” defined as making do by applying combinations of the resources at hand to new problems and opportunities, provides an important pathway to achieve innovation for new resource-constrained firms. Through bricolage, resource-constrained firms engage in the processes of “recombination” that are core to creating innovative outcomes. Based on a large longitudinal dataset, our results suggest that variations in the degree to which firms engage in bricolage behaviors can provide a broadly applicable explanation of innovativeness under resource constraints by new firms. We find no general support for our competing hypothesis that the positive effects may level off or even turn negative at high levels of bricolage..