Do strategy choices matter for nascent firms? A study on effectuation and causation impacts on new ventures outcomes

Principal Topic : Nascent entrepreneurship has drawn the attention of scholars in the last few years (Davidsson, 2006, Wagner, 2004). However, most studies have asked why firms are created focussing on questions such as what are the characteristics (Delmar and Davidsson, 2000) and motivations (Carter, Gartner, Shaver & Reynolds, 2004) of nascent entrepreneurs, or what are the success factors in venture creation (Davidsson & Honig; 2003; Delmar and Shane, 2004). In contrast, the question of how companies emerge is still in its infancy. On a theoretical side, effectuation, developed by Sarasvathy (2001) offers one view of the strategies that may be at work during the venture creation process. Causation, the theorized inverse to effectuation, may be described as a rational reasoning method to create a company. After a comprehensive market analysis to discover opportunities, the entrepreneur will select the alternative with the higher expected return and implement it through the use of a business plan. In contrast, effectuation suggests that the future entrepreneur will develop her new venture in a more iterative way by selecting possibilities through flexibility and interaction with the market, affordability of loss of resources and time invested, development of pre-commitments and alliances from stakeholders. Another contrasting point is that causation is ''goal driven'' while an effectual approach is ''mean driven'' (Sarasvathy, 2001) One of the predictions of effectuation theory is effectuation is more likely to be used by entrepreneurs early in the venture creation process (Sarasvathy, 2001). However, this temporal aspect and the impact of the effectuation strategy on the venture outcomes has so far not been systematically and empirically tested on large samples. The reason behind this research gap is twofold. Firstly, few studies collect longitudinal data on emerging ventures at an early enough stage of development to avoid severe survivor bias. Second, the studies that collect such data have not included validated measures of effectuation. The research we are conducting attempts to partially fill this gap by combining an empirical investigation on a large sample of nascent and young firms with the effectuation/causation continuum as a basis (Sarasvathy, 2001). The objectives are to understand the strategies used by the firms during the creation process and measure their impacts on the firm outcomes. Methodology/Key Propositions : This study draws its data from the first wave of the CAUSEE project where 28,383 Australian households were randomly contacted by phone using a specific methodology to capture emerging firms (Davidsson, Steffens, Gordon, Reynolds, 2008). This screening led to the identification of 594 nascent ventures (i.e., firms that are not operating yet) and 514 young firms (i.e., firms that have started operating from 2004) that were willing to participate in the study. Comprehensive phone interviews were conducted with these 1108 ventures. In a likewise comprehensive follow-up 12 months later, 80% of the eligible cases completed the interview. The questionnaire contains specific sections designed to distinguish effectual and causal processes, innovation, gestation activities, business idea changes and ventures outcomes. The effectuation questions are based on the components of effectuation strategy as described by Sarasvathy (2001) namely: flexibility, affordable loss and pre-commitment from stakeholders. Results from two rounds of pre-testing informed the design of the instrument included in the main survey. The first two waves of data have will be used to test and compare the use of effectuation in the venture creation process. To increase the robustness of the results, temporal use of effectuation will be tested both directly and indirectly. 1. By comparing the use of effectuation in nascent and young firms from wave 1 to 2, we will be able to find out how effectuation is affected by time over a 12-month duration and if the stage of venture development has an impact on its use. 2. By comparing nascent ventures early in the creation process versus nascent ventures late in the creation process. Early versus late can be determined with the help of time-stamped gestation activity questions included in the survey. This will help us to determine the change on a small time scale during the creation phase of the venture. 3. By comparing nascent firms to young (already operational) firms. 4. By comparing young firms becoming operational in 2006 with those first becoming operational in 2004. Results and Implications : Wave 1 and 2 data have been completed and wave 2 is currently being checked and 'cleaned'. Analysis work will commence in September, 2009. This paper is expected to contribute to the body of knowledge on effectuation by measuring quantitatively its use and impact on nascent and young firms activities at different stages of their development. In addition, this study will also increase the understanding of the venture creation process by comparing over time nascent and young firms from a large sample of randomly selected ventures. We acknowledge the results from this study will be preliminary and will have to be interpreted with caution as the changes identified may be due to several factors and may not only be attributed to the use/not use of effectuation. Meanwhile, we believe that this study is important to the field of entrepreneurship as it provides some much needed insights on the processes used by nascent and young firms during their creation and early operating stages.

Can book-to-market and size be risk factors that predict economic growth in Asia's emerging economies?

We investigate whether the two 2 zero cost portfolios, SMB and HML, have the ability to predict economic growth for markets investigated in this paper. Our findings show that there are only a limited number of cases when the coefficients are positive and significance is achieved in an even more limited number of cases. Our results are in stark contrast to Liew and Vassalou (2000) who find coefficients to be generally positive and of a similar magnitude. We go a step further and also employ the methodology of Lakonishok, Shleifer and Vishny (1994) and once again fail to support the risk-based hypothesis of Liew and Vassalou (2000). In sum, we argue that search for a robust economic explanation for firm size and book-to-market equity effects needs sustained effort as these two zero cost portfolios do not represent economically relevant risk.

Measuring performance of municipal real estate : softening the impact of financial crisis to local governments

Asset management in local government is an emerging discipline and over a decade has become a crucial aspect towards a more efficient and effective organisation. One crucial feature in the public asset management is performance measurement toward the public real estates. This measurement critically at the important component of public wealth and seeks to apply a standard of economic efficiency and effective organisational management especially in such global financial crisis condition. This paper aims to identify global economic crisis effect and proposes alternative solution for local governments to softening the impact of the crisis to the local governments organisation. This study found that the most suitable solution for local government to solve the global economic crisis in Indonesia is application of performance measurement in its asset management. Thus, it is important to develop performance measurement system in local government asset management process. This study provides suggestions from published documents and literatures. The paper also discusses the elements of public real estate performance measurement. The measurement of performance has become an essential component of the strategic thinking of assets owners and managers. Without having a formal measurement system for performance, it is difficult to plan, control and improve local government real estate management system. A close look at best practices in public sectors reveals that in most cases these practices were transferred from private sector reals estate management under the direction of real estate experts retained by government. One of the most significant advances in government property performance measurement resulted from recognition that the methodology used by private sector, non real estate corporations for managing their real property offered a valuable prototype for local governments. In general, there are two approaches most frequently used to measure performance of public organisations. Those are subjective and objective measures. Finally, findings from this study provides useful input for the local government policy makers, scholars and asset management practitioners to establish a public real estate performance measurement system toward more efficient and effective local governments in managing their assets as well as increasing public services quality in order to soften the impact of global financial crisis.

Controversies of prophylactic hypothermia and the emerging use of brain tissue oxygen tension monitoring and decompressive craniectomy in traumatic brain-injured children

Background Despite being the leading cause of death and disability in the paediatric population, traumatic brain injury (TBI) in this group is largely understudied. Clinical practice within the paediatric intensive care unit (PICU) has been based upon adult guidelines however children are significantly different in terms of mechanism, pathophysiology and consequence of injury. Aim To review TBI management in the PICU and gain insight into potential management strategies. Method To conduct this review, a literature search was conducted using MEDLINE, PUBMED and The Cochrane Library using the following key words; traumatic brain injury; paediatric; hypothermia. There were no date restrictions applied to ensure that past studies, whose principles remain current were not excluded. Results Three areas were identified from the literature search and will be discussed against current acknowledged treatment strategies: Prophylactic hypothermia, brain tissue oxygen tension monitoring and decompressive craniectomy. Conclusion Previous literature has failed to fully address paediatric specific management protocols and we therefore have little evidence-based guidance. This review has shown that there is an emerging and ongoing trend towards paediatric specific TBI research in particular the area of moderate prophylactic hypothermia (MPH).

Health law in Australia

Health Law in Australia is the first book to deal with health law on a comprehensive national basis. In a field of law that is becoming increasingly important and where the demand for expertise is rapidly expanding, Health Law in Australia takes a logical, structured approach to an examination of the law in all Australian jurisdictions. By covering all the major areas in this diverse field of law, Health Law in Australia enhances the understanding of the discipline as a whole. Beginning with an exploration of the general principles of health law, including chapters on “Medical Negligence”, “Children and Consent”, and “Confidentiality, Privacy, and Access to Health Records”, the book goes on to consider beginning-of-life and end-of-life issues before concluding with chapters on emerging areas in health law, such as biotechnology and medical research. The contributing authors include national leaders in the field who are specialists in these areas of health law and who can therefore reveal to readers the results of their research. Health Law in Australia has been written for those with a legal background and is essential reading for undergraduate law students, postgraduate law students, researchers and scholars in the disciplines of law, health and medicine, as well as legal practitioners, government departments and bodies in the health area, and private health providers.

Fashion design research : research methodologies for emerging researchers [Abstract]

This paper attempts to address some fundamental issues faced by new and emerging researchers in the discipline of Fashion design. A culture of patchwork research methodology appears to have become the norm in an attempt to ‘fit’ fashion design research into an academic paradigm for the examination of readers from more traditional research fields such as Arts, Humanities, Science and Philosophy. Two key questions are discussed here; is it appropriate for fashion researchers to adopt and adapt existing research methodologies to find a scholarly, academic voice? Secondly; do these methodologies enable fashion design research to be effectively disseminated to professionals and fellow researchers within the discipline of fashion design?

Compliance with international financial reporting standards (IFRS) and the value relevance of accounting information in emerging stock markets : evidence from Kuwait

Since the 1960s, the value relevance of accounting information has been an important topic in accounting research. The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver, 2002). Such research is not only important for investors but also provides useful insights into accounting reporting effectiveness for standard setters and other users. Both the quality of accounting standards used and the effectiveness associated with implementing these standards are fundamental prerequisites for high value relevance (Hellstrom, 2006). However, while the literature comprehensively documents the value relevance of accounting information in developed markets, little attention has been given to emerging markets where the quality of accounting standards and their enforcement are questionable. Moreover, there is currently no known research that explores the association between level of compliance with International Financial Reporting Standards (IFRS) and the value relevance of accounting information. Motivated by the lack of research on the value relevance of accounting information in emerging markets and the unique institutional setting in Kuwait, this study has three objectives. First, it investigates the extent of compliance with IFRS with respect to firms listed on the Kuwait Stock Exchange (KSE). Second, it examines the value relevance of accounting information produced by KSE-listed firms over the 1995 to 2006 period. The third objective links the first two and explores the association between the level of compliance with IFRS and the value relevance of accounting information to market participants. Since it is among the first countries to adopt IFRS, Kuwait provides an ideal setting in which to explore these objectives. In addition, the Kuwaiti accounting environment provides an interesting regulatory context in which each KSE-listed firm is required to appoint at least two external auditors from separate auditing firms. Based on the research objectives, five research questions (RQs) are addressed. RQ1 and RQ2 aim to determine the extent to which KSE-listed firms comply with IFRS and factors contributing to variations in compliance levels. These factors include firm attributes (firm age, leverage, size, profitability, liquidity), the number of brand name (Big-4) auditing firms auditing a firm’s financial statements, and industry categorization. RQ3 and RQ4 address the value relevance of IFRS-based financial statements to investors. RQ5 addresses whether the level of compliance with IFRS contributes to the value relevance of accounting information provided to investors. Based on the potential improvement in value relevance from adopting and complying with IFRS, it is predicted that the higher the level of compliance with IFRS, the greater the value relevance of book values and earnings. The research design of the study consists of two parts. First, in accordance with prior disclosure research, the level of compliance with mandatory IFRS is examined using a disclosure index. Second, the value relevance of financial statement information, specifically, earnings and book value, is examined empirically using two valuation models: price and returns models. The combined empirical evidence that results from the application of both models provides comprehensive insights into value relevance of accounting information in an emerging market setting. Consistent with expectations, the results show the average level of compliance with IFRS mandatory disclosures for all KSE-listed firms in 2006 was 72.6 percent; thus, indicating KSE-listed firms generally did not fully comply with all requirements. Significant variations in the extent of compliance are observed among firms and across accounting standards. As predicted, older, highly leveraged, larger, and profitable KSE-listed firms are more likely to comply with IFRS required disclosures. Interestingly, significant differences in the level of compliance are observed across the three possible auditor combinations of two Big-4, two non-Big 4, and mixed audit firm types. The results for the price and returns models provide evidence that earnings and book values are significant factors in the valuation of KSE-listed firms during the 1995 to 2006 period. However, the results show that the value relevance of earnings and book values decreased significantly during that period, suggesting that investors rely less on financial statements, possibly due to the increase in the available non-financial statement sources. Notwithstanding this decline, a significant association is observed between the level of compliance with IFRS and the value relevance of earnings and book value to KSE investors. The findings make several important contributions. First, they raise concerns about the effectiveness of the regulatory body that oversees compliance with IFRS in Kuwait. Second, they challenge the effectiveness of the two-auditor requirement in promoting compliance with regulations as well as the associated cost-benefit of this requirement for firms. Third, they provide the first known empirical evidence linking the level of IFRS compliance with the value relevance of financial statement information. Finally, the findings are relevant for standard setters and for their current review of KSE regulations. In particular, they highlight the importance of establishing and maintaining adequate monitoring and enforcement mechanisms to ensure compliance with accounting standards. In addition, the finding that stricter compliance with IFRS improves the value relevance of accounting information highlights the importance of full compliance with IFRS and not just mere adoption.

The contemporary librarian : skills, knowledge and attributes required in a world of emerging technologies

Seventy-six librarians participated in a series of focus groups in support of research exploring the skills, knowledge and attributes required by the contemporary library and information professional in a world of every changing technology. The project was funded by the Australian Learning and Teaching Council. Text data mining analysis revealed three main thematic clusters (libraries, people, jobs) and one minor thematic cluster (community). Library 2.0 was broadly viewed by participants as being about change whilst librarian 2.0 was perceived by participants as not a new creation but just about good librarian practices. Participants expressed the general belief that personality traits, not just qualifications, were critical to be a successful librarian or information worker in the future.

When sparks fly : developing formal mentoring programs for the career development of young and emerging artists

Formal mentoring programs are accepted as a valuable strategy for developing young and emerging artists. This thesis presents the results of an evaluation of the SPARK National Young Artists Mentoring Program (SPARK). SPARK was a ten-month formal mentoring program managed by Youth Arts Queensland (YAQ) on behalf of the Australia Council for the Arts from 2003-2009. The program aimed to assist young and emerging Australian artists between the ages of 18-26 to establish a professional career in the arts. It was a highly successful formal arts mentoring program that facilitated 58 mentorships between young and emerging artists and professional artists from across Australia in five program rounds over its seven year lifespan. Interest from other cultural organisations looking to develop their own formal mentoring programs encouraged YAQ to commission this research to determine how the program works to achieve its effects. This study was conducted with young and emerging artists who participated in SPARK from 2003 to 2008. It took a theory-driven evaluation approach to examine SPARK as an example of what makes formal arts mentoring programs effective. It focused on understanding the program’s theory or how the program worked to achieve its desired outcomes. The program activities and assumed responses to program activities were mapped out in a theories of change model. This theoretical framework was then used to plan the points for data collection. Through the process of data collection, actual program developments were compared to the theoretical framework to see what occurred as expected and what did not. The findings were then generalised for knowledge and wider application. The findings demonstrated that SPARK was a successful and effective program and an exemplar model of a formal mentoring program preparing young and emerging artists for professional careers in the arts. They also indicate several ways in which this already strong program could be further improved, including: looking at the way mentoring relationships are set up and how the mentoring process is managed; considering the balance between artistic and professional development; developing career development competencies and networking skills; taking into account the needs of young and emerging artists to develop their professional identity and build confidence; and giving more thought to the desired program outcomes and considering the issue of timeliness and readiness for career transition. From these findings, together with principles outlined in the mentoring and career development literature, a number of necessary conditions have been identified for developing effective mentoring programs in the career development of young and emerging artists.

Asset identification : addressing the climate change in public asset management process

Climate change is becoming increasingly apparent that is largely caused by human activities such as asset management processes, from planning to disposal, of property and infrastructure. One essential component of asset management process is asset identification. The aims of the study are to identify the information needed in asset identification and inventory as one of public asset management process in addressing the climate change issue; and to examine its deliverability in developing countries’ local governments. In order to achieve its aims, this study employs a case study in Indonesia. This study only discusses one medium size provincial government in Indonesia. The information is gathered through interviews of the local government representatives in South Sulawesi Province, Indonesia and document analysis provided by interview participants. The study found that for local government, improving the system in managing their assets is one of emerging biggest challenge. Having the right information in the right place and at the right time are critical factors in response to this challenge. Therefore, asset identification as the frontline step in public asset management system is holding an important and critical role. Furthermore, an asset identification system should be developed to support the mainstream of adaptation to climate change vulnerability and to help local government officers to be environmentally sensitive. Finally, findings from this study provide useful input for the policy makers, scholars and asset management practitioners to develop an asset inventory system as a part of public asset management process in addressing the climate change.

Project-based IHRM : the emerging approach for the post-GFC world?

This paper reviews some past emphases in IHRM, and recommends that IHR teachers and practitioners consider using project management methodologies to tighten the focus of our diverse activities.

Editorial : knowledge-based development of cities : a myth or reality?

Urban development in the first decade of the 21st century has faced many challenges ranging from rapid to shrinking urbanisation, from emerging knowledge economy to global division of labour and from globalisation to climate change. Along with these challenges new concepts, such as essentialism, environmentalism and dematerialism, are emerged and started to influence the way urban development plans are prepared and visions for the development of cities are made. Beyond this, scholars, practitioners and decision-makers have also started to discuss the need for an new urban planning and development approach in order to achieve a development that is sustainable and knowledge-based. Limited successful examples of alternative planning and development approaches showcased potentials of moving towards a new plan-making mindset in the era of knowledge economy. This paper presents a new urban planning and development approach that is taking application ground in many parts of the globe, namely knowledge-based urban development. After providing the theoretical foundation and conceptual framework of knowledge-based urban development the paper discusses whether knowledge-based development of cities is a myth or a reality.

Knowledge-based development of cities : a myth or reality?

Urban development in the 21st decade of the 21st century has faced many challenges ranging from rapid to shrinking urbanisation, from emerging knowledge economy to global division of labour and from globalisation to climate change. Along with with these challenges new concepts, such as essentialism, environmentalism and dematerialism, are emerged and started to influence the way urban development plans are prepared and visions for the development of cities are made. Beyond this, scholars, practitioners and decision-makers have also started to discuss the need for an new urban planning and development approach in order to achieve a development that is sustainable and knowledge-based. Limited successful examples of alternative planning and development approaches showcased potentials of moving towards a new plan-making mindset in the era of knowledge economy. This paper presents a new urban planning and development approach that is taking application ground in many parts of the globe, namely knowledge-based urban development. After providing the theoretical foundation and conceptual framework of knowledge-based urban development the paper discusses whether knowledge-based development of cities is a myth or a reality.

Improvement through people for the emerging new work practices in manufacturing

This paper describes the changes occurring in manufacturing industries and their effect on knowledge and skills necessary to perform effectively in the new environments. The changes in knowledge and skills are presented as a summary to illustrate the extent of the change. The concept of multiskilling is used to conceptualise the emerging new knowledge and skills and finally some guidelines for designing training programs to acquire multiskilling are presented.

Online social networks as an emerging opportunity for entrepreneurship : a study of the music industry

The explosion in use of online social networks is an important phenomenon that provides a new set of entrepreneurial opportunities. Emerging musicians have been among the first to exploit this new market opportunity – and indeed, many have used it successfully. A recent study Carter (2009) reveals that artists who earned the most returns had an online presence on multiple social online sites and services such as MySpace and Facebook. These web pages are leveraged to build fan bases and develop different types of revenue streams. Yet, little is currently known about discovery or exploitation of such opportunities.