The roles and importance of formal and informal sources of business support in young firms : evidence from the UK’s 2008 Federation of Small Business Survey

Objectives This research explores the relationship between young firms, their growth orientation-intention and a range of relationships which can be seen to provide business support. Prior-work Research indicates that networks impact the firm’s ability to secure resources (Sirmon and Hitt 2003; Liao and Welsch. 2004; Hanlon and Saunders 2007). Networks have been evaluated in a number of ways ranging from simple counts to characteristics of their composition (Davidsson and Honig 2003), strength of relationships (Granovetter 1973) and network diversity (Carter et al 2003). By providing access to resources and knowledge (from start-up assistance and raising capital, (e.g. Smallbone et al, 2003), networks may assist in enabling continued persistence during those times where firms may experience resource constraints owing to firm growth (Baker and Nelson 2005). Approach The data used in this research was generated in the 2008 UK Federation of Small Businesses (FSB) survey. Over 1,000 of the firms responding were found to fall into the category of “young”, ((defined as firms under 4 years old). Firms were considered the unit of analysis with the entrepreneur being the chief spokesperson for the firm. Preliminary data analysis considered key demographic characteristics and industry classifications, comparing the FSB data with that of the UK government’s own (BERR) Small Business Surveys of 2007 and 2008, to establish some degree of representativeness of the respondents. The analysis then examined networks with varying potential ability to provide support for young firms, the networks measured in terms of number, diversity, characteristic and strength in its relationship to young firm growth orientation. The diversity of business-support-related relationships ranged from friends and family, through professional services, customers and suppliers, and government business services, to trade associations and informal business networks. The characteristics of these formal and informal sources of support for new businesses are examined across a range of business support-type activities for new firms. The number of relationships and types of business support are also explored. Finally, the strength of these relationships is examined by analysis of the source of business support, type of business support, and links to the growth orientation-intention of the firm, after controlling for a number of key variables related to firm and industry status and owner characteristics. Results Preliminary analysis of the data by means of univariate analysis showed that average number of sources of advice was around 2.5 (from a potential total of 6). In terms of the diversity of relationships, universities had by far the smallest percentage of firms receiving beneficial advice from them. Government business services were beneficially used by 40% of young firms, the other relationship types being around the 50-55% mark. In terms of characteristics of the advice, the average number of areas in which benefit was achieved was around 5.5 of a maximum of 15. Start-up advice has by far the highest percentage of firms obtaining beneficial advice, with increasing sales, improving contacts and improving confidence being the other categories at or around the 50% mark. Other market-focused areas where benefits were also received were in the areas of new markets, existing product improvements and new product improvements, where around 40% of the young responding firms obtained benefit. Regression techniques evaluating the strength of these relationships in terms of the links between business support (by source of support, type of support, and range of support) and firm growth orientation-intention focus highlighted a number of significant relationships, even after controlling for a range of other explanatory variables identified in the literature. Specifically, there was found to be a positive relationship between receiving business advice generally (regardless of type or source) and growth orientation. This relationship was seen to be stronger, however, when looking at the number of types of beneficial advice received, and stronger again for the number of sources of this advice. In terms of individual sources of advice, customers and suppliers had the strongest relationship with growth, with Government business services also found to be significant. Combining these two sources was also seen to increase the strength of the relationship between these two sources of advice and growth orientation. In considering areas of support, growth was most strongly positively related to advice that benefited the development of new products and services, and also business confidence, but was negatively related to advice linked to business recovery. Finally, amalgamating the 4 key types and sources of advice to examine the impact of combinations of these types and sources of advice also improved the strength of the relationship. Implications The findings will assist in the understanding of young firms in general and growth more specifically, particularly the role and importance of specific sources, types and combinations of business support used more extensively by new young growth-oriented firms. Value This research may assist in processes designed to allow entrepreneurs to make better decisions; educators and support organizations to develop better advice and assistance, and Governments design better conditions for the creation of new growth-oriented businesses.

L'étendue internationale des nouvelles firmes de hautes technologies: le rôle du capital humain et de l'intention stratégique des fondateurs

De récentes recherches ont mis l’accent sur l’importance pour les nouvelles entreprises internationales de l’existence de ressources et de compétences spécifiques. La présente recherche, qui s’inscrit dans ce courant, montre en particulier l’importance du capital humain acquis par les entrepreneurs sur base de leur expérience internationale passée. Mais nous montrons en même temps que ces organisations sont soutenues par une intention délibérée d’internationalisation dès l’origine. Notre recherche empirique est basée sur l’analyse d’un échantillon de 466 nouvelles entreprises de hautes technologies anglaises et allemandes. Nous montrons que ce capital humain est un actif qui facilite la pénétration rapide des marchés étrangers, et plus encore quand l’entreprise nouvelle est accompagnée d’une intention stratégique délibérée d’internationalisation. Des conclusions similaires peuvent être étendues au niveau des ressources que l’entrepreneur consacre à la start-up : plus ces ressources sont importantes, plus le processus d’internationalisation tend à se faire à grande échelle ; et là aussi, l’influence de ces ressources est augmenté par l’intention stratégique d’internationalisation. Dans le cadre des études empiriques sur les born-globals (entreprises qui démarrent sur un marché globalisé), cette recherche fournit une des premières études empiriques reliant l’influence des conditions initiales de création aux probabilités de croissance internationale rapide.

The impact of institutional, instrumental and interpersonal underpinnings on network dynamics and outcomes

Networks form a key part of the infrastructure of contemporary governance arrangements and, as such, are likely to continue for some time. Networks can take many forms and be formed for many reasons. Some networks have been explicitly designed to generate a collective response to an issue; some arise from a top down perspective through mandate or coercion; while others rely more heavily on interpersonal relations and doing the right thing. In this paper, these three different perspectives are referred to as the “3I”s: Instrumental, Institutional or Interpersonal. It is proposed that these underlying motivations will affect the process dynamics within the different types of networks in different ways and therefore influence the type of outcomes achieved. This proposition is tested through a number of case studies. An understanding of these differences will lead to more effective design, management and clearer expectations of what can be achieved through networks.

The importance of a new kind of learning in collaborative networks

There is wide agreement that in order to manage the increasingly complex and uncertain tasks of business, government and community, organizations can no longer operate in supreme isolation, but must develop a more networked approach. Networks are not ‘business as usual’. Of particular note is what has been referred to as collaborative networks. Collaborative networks now constitute a significant part of our institutional infrastructure. A key driver for the proliferation of these multiorganizational arrangements is their ability to facilitate the learning and knowledge necessary to survive or to respond to increasingly complex social issues In this regard the emphasis is on the importance of learning in networks. Learning applies to networks in two different ways. These refer to the kinds of learning that occur as part of the interactive processes of networks. This paper looks at the importance of these two kinds of learning in collaborative networks. The first kind of learning relates to networks as learning networks or communities of practice. In learning networks people exchange ideas with each other and bring back this new knowledge for use in their own organizations. The second type of learning is referred to as network learning. Network learning refers to how people in collaborative networks learn new ways of communicating and behaving with each other. Network learning has been described as transformational in terms of leading to major systems changes and innovation. In order to be effective, all networks need to be involved as learning networks; however, collaborative networks must also be involved in network learning to be effective. In addition to these two kinds of learning in collaborative networks this paper also focuses on the importance of how we learn about collaborative networks. Maximizing the benefits of working through collaborative networks is dependent on understanding their unique characteristics and how this impacts on their operation. This requires a new look at how we specifically teach about collaborative networks and how this is similar to and/or different from how we currently teach about interorgnizational relations.

Social innovation to solve homelessness : wicked solutions for wicked problems

Homelessness is a complex problem that manifests in all societies. This intractable and ‘wicked’ issue resists single-agency solutions and its resolution and requires a large, on-going investment of financial and professional resources that few organisations can sustain. This paper adopts a social innovation framework to examine government and community sector responses to homelessness. While recent evaluations and policy prescriptions have suggested better integrated and more co-ordinated service delivery models for addressing homelessness, there is little understanding of the innovation framework in which alternative service system paradigms emerge. A framework that identifies/distils and explains different innovation levels is put forward. The framework highlights that while government may lead strategic level innovations, community organisations are active in developing innovation at the service and client level. Moreover, community organisations may be unaware of the innovative capacity that resides in their creative responses to resolving social crisis and marginalisation through being without shelter.

Changing the rules in use? An examination of social enterprise in local governance

As multi-stakeholder entities that explicitly inhabit both social and economic domains, social enterprises pose new challenges and possibilities for local governance. In this paper, we draw on new institutional theory to examine the ways in which locally-focused social enterprises disrupt path dependencies and rules in use within local government. Rather than examining the more commonly asked question of the influence of the state on social enterprise, our purpose here is to examine the impacts of social enterprise on governmental institutions at the local level. Our discussion is based on a mixed-methods study, including an online survey of 66 local government staff, document analysis, and in-depth interviews with 24 social enterprise practitioners and local government actors working to support social enterprise development in Victoria, Australia. We find that, in some instances, the hybrid nature of social enterprise facilitates ‘joining up’ between different functional areas of local government. Beyond organisational relationships, social enterprise also influences local governance through the reinterpretation and regeneration of institutionalised public spaces.

High impact training : achieving synergies between program management education and workplace practice

This paper addresses the challenges of transfer of training back to the workplace for programme and project managers who are being groomed for the leadership of large and complex projects. The paper draws on the experience of the development and delivery of Queensland University of Technology (QUT) education programs: an Executive Masters of Complex Project Management and a series of Continuing Professional Development (CPD) events for an Australian government agency, Defence Materiel Organisation (DMO). Drawing on notions of ‘far transfer’ (Laker 1990; Noe, 1986) and ‘transfer climate’ (Kozlowski & Salas, 1993; Yamnill & McLean, 2001), the paper describes the steps undertaken to achieve a design that ensures that programme and project leadership skills developed through these corporate education programs become successfully embedded back in the organisation. Further, the paper reports on a small qualitative study where the programme success was evaluated by the organisational sponsor, senior leaders and program participants. Nine interviews were conducted and analysed to identify the success of far transfer and transfer climate four months after the return of program participants from cohort 1 2008 to the workplace.

Governance and negotiation : context revisited

Context is acknowledged as a significant feature of a negotiation. Background information about the relationship between the parties, available resources and organisational data are readily identifiable as key components of the contextual make-up of negotiations. However, information deriving from the broader setting of the negotiation may be less well-utilised or simply taken-for-granted in a negotiation. This paper suggests that this broader setting, discussed under the rubric of governance, is a critical facet of the context of negotiations. The paper explores the notion of governance and traces its relationship with negotiation. It then offers a framework that sets out the different governance approaches and allows for identifying and assessing potential negotiation strategies according to the dominant governance mode. It concludes that while a mix of governance approaches may be present in negotiations, identifying ‘ideal types’ or dominant governance modes assists in choosing appropriate strategies for successfully undertaking negotiations.

Population aging in a globalizing labour market: implications for older workers

Against a background of population aging, and with it, warnings about the sustainability of social welfare systems and problems associated with declining labour supply, there is an increasing policy emphasis on extending working lives of older workers among the industrialised nations (Hirsch, 2003; Keese, 2005; Taylor, 2006). However, recent commentaries have tended to focus on the relationship between population aging and the labour market, largely ignoring other critical factors that are affecting older workers’ relationship with the labour market. This contrasts with extensive research undertaken in the 1980s and 1990s when the forces acting upon older workers at that time were thoroughly elucidated (e.g. Kohli et al., 1991). The focus of this paper is on the labour supply challenges for employers and nations arising from demographic trends, in combination with social and technological changes and the wider forces of globalisation, how each is responding, and how these trends are affecting older workers’ trying to secure or maintain footholds in a labour market but facing, as Richard Sennett (2006) puts it, the ‘spectre of uselessness’ as jobs they could do have either migrated to other parts of the world or have been destroyed in the wake of industry failure.

Unmanned Aerial Vehicles UAVs attitude, height, motion estimation and control using visual systems

This paper presents an implementation of an aircraft pose and motion estimator using visual systems as the principal sensor for controlling an Unmanned Aerial Vehicle (UAV) or as a redundant system for an Inertial Measure Unit (IMU) and gyros sensors. First, we explore the applications of the unified theory for central catadioptric cameras for attitude and heading estimation, explaining how the skyline is projected on the catadioptric image and how it is segmented and used to calculate the UAV’s attitude. Then we use appearance images to obtain a visual compass, and we calculate the relative rotation and heading of the aerial vehicle. Additionally, we show the use of a stereo system to calculate the aircraft height and to measure the UAV’s motion. Finally, we present a visual tracking system based on Fuzzy controllers working in both a UAV and a camera pan and tilt platform. Every part is tested using the UAV COLIBRI platform to validate the different approaches, which include comparison of the estimated data with the inertial values measured onboard the helicopter platform and the validation of the tracking schemes on real flights.

Knowledge is not power, but it’s a start : young people and employment entitlements

This paper employs empirical evidence from a survey of Queensland secondary school students to examine their knowledge about their wages and working conditions. It does so within the theoretical lens of the Gagne (or Gagne-Briggs) theory of instruction, which centres on the content of learning and how learning is acquired (Gagne, Briggs & Wager, 1988). While Gagne articulates five categories of learning, our focus here is on two; verbal information or declarative knowledge (facts that people can declare), and procedural knowledge (the rules and procedures for achieving outcomes). We show that student workers know little about the instruments governing their employment, or their workplace entitlements. Of the total sample of year 9 and year 11 students surveyed (n=892), those students who worked, or who had worked in the past year (n=438), were asked to identify whether they were employed under an award, collective agreement or AWA. Eighty three per cent of students did not know which industrial instrument set their wages. We argue that if young workers do not have declarative knowledge of their entitlements, nor basic procedural knowledge about redress, then they are not in a position to deploy Gagne’s ‘cognitive strategies’ that would enable them to take action to ensure their working conditions meet legal minima. We advocate that young workers should be given summary information on their wages and other entitlements on appointment and that such summary information should be readily available on employers’ noticeboards and electronically on company websites, and that the information should include a brief summary of avenues for redressing issues of underpayment or sub-standard conditions.

Managing a portfolio of corporate venture units : challenges in achieving within-unit focus and between-unit coordination

Principal Topic: There is increasing recognition that the organizational configurations of corporate venture units should depend on the types of ventures the unit seeks to develop (Burgelman, 1984; Hill and Birkinshaw, 2008). Distinction have been made between internal and external as well as exploitative versus explorative ventures (Hill and Birkinshaw, 2008; Narayan et al., 2009; Schildt et al., 2005). Assuming that firms do not want to limit themselves to a single type of venture, but rather employ a portfolio of ventures, the logical consequence is that firms should employ multiple corporate venture units. Each venture unit tailor-made for the type of venture it seeks to develop. Surprisingly, there is limited attention in the literature for the challenges of managing multiple corporate venture units in a single firm. Maintaining multiple venture units within one firm provides easier access to funding for new ideas (Hamel, 1999). It allows for freedom and flexibility to tie the organizational systems (Rice et al., 2000), autonomy (Hill and Rothaermel, 2003), and involvement of management (Day, 1994; Wadwha and Kotha, 2006) to the requirements of the individual ventures. Yet, the strategic objectives of a venture may change when uncertainty around the venture is resolved (Burgelman, 1984). For example, firms may decide to spin-in external ventures (Chesbrough, 2002) or spun-out ventures that prove strategically unimportant (Burgelman, 1984). This suggests that ventures might need to be transferred between venture units, e.g. from a more internally-driven corporate venture division to a corporate venture capital unit. Several studies suggested that ventures require different managerial skills across their phase of development (Desouza et al., 2007; O'Connor and Ayers, 2005; Kazanjian and Drazin, 1990; Westerman et al., 2006). To facilitate effective transfer between venture units and manage the overall venturing process, it is important that firms set up and manage integrative linkages. Integrative linkages provide synergies and coordination between differentiated units (Lawrence and Lorsch, 1967). Prior findings pointed to the important role of senior management (Westerman et al., 2006; Gilbert, 2006) and a shared organizational vision (Burgers et al., 2009) to coordinate venture units with mainstream businesses. We will draw on these literatures to investigate the key question of how to integratively manage multiple venture units. ---------- Methodology/Key Propositions: In order to seek an answer to the research question, we employ a case study approach that provides unique insights into how firms can break up their venturing process. We selected three Fortune 500 companies that employ multiple venturing units, IBM, Royal Dutch/ Shell and Nokia, and investigated and compared their approaches. It was important that the case companies somewhat differed in the type of venture units they employed as well as the way they integrate and coordinate their venture units. The data are based on extensive interviews and a variety of internal and external company documents to triangulate our findings (Eisenhardt, 1989). The key proposition of the article is that firms can best manage their multiple venture units through an ambidextrous design of loosely coupled units. This provides venture units with sufficient flexibility to employ organizational configurations that best support the type of venture they seek to develop, as well as provides sufficient integration to facilitate smooth transfer of ventures between venture units. Based on the case findings, we develop a generic framework for a new way of managing the venturing process through multiple corporate venture units. ---------- Results and Implications: One of our main findings is that these firms tend to organize their venture units according to phases in the venture development process. That is, they tend to have venture units aimed at incubation of venture ideas as well as units aimed more at the commercialization of ventures into a new business unit for the firm or a start-up. The companies in our case studies tended to coordinate venture units through integrative management skills or a coordinative venture unit that spanned multiple phases. We believe this paper makes two significant contributions. First, we extend prior venturing literature by addressing how firms manage a portfolio of venture units, each achieving different strategic objectives. Second, our framework provides recommendations on how firms should manage such an approach towards venturing. This helps to increase the likelihood of success of their venturing programs.

Attractiveness of venture ideas : a conjoint study

Principal Topic : According to Shane & Venkataraman (2000) entrepreneurship consists of the recognition and exploitation of venture ideas - or opportunities as they often called - to create future goods and services. This definition puts venture ideas is at the heart of entrepreneurship research. Substantial research has been done on venture ideas in order to enhance our understanding of this phenomenon (e.g. Choi & Shepherd, 2004; Shane, 2000; Shepherd & DeTienne, 2005). However, we are yet to learn what factors drive entrepreneurs' perceptions of the relative attractiveness of venture ideas, and how important different idea characteristics are for such assessments. Ruef (2002) recognized that there is an uneven distribution of venture ideas undertaken by entrepreneurs in the USA. A majority introduce either a new product/service or access a new market or market segment. A smaller percentage of entrepreneurs introduce a new method of production, organizing, or distribution. This implies that some forms of venture ideas are perceived by entrepreneurs as more important or valuable than others. However, Ruef does not provide any information regarding why some forms of venture ideas are more common than others among entrepreneurs. Therefore, this study empirically investigates what factors affect the attractiveness of venture ideas as well as their relative importance. Based on two key characteristics of venture ideas, namely venture idea newness and relatedness, our study investigates how different types and degrees of newness and relatedness of venture ideas affect their attractiveness as perceived by expert entrepreneurs. Methodology/Key : Propositions According to Schumpeter (1934) entrepreneurs introduce different types of venture ideas such as new products/services, new method of production, enter into new markets/customer and new method of promotion. Further, according to Schumpeter (1934) and Kirzner (1973) venture ideas introduced to the market range along a continuum of innovative to imitative ideas. The distinction between these two extremes of venture idea highlights an important property of venture idea, namely their newness. Entrepreneurs, in order to gain competitive advantage or above average returns introduce their venture ideas which may be either new to the world, new to the market that they seek to enter, substantially improved from current offerings and an imitative form of existing offerings. Expert entrepreneurs may be more attracted to venture ideas that exhibit high degree of newness because of the higher newness is coupled with increased market potential (Drucker, 1985) Moreover, certain individual characteristics also affect the attractiveness of venture idea. According to Shane (2000), individual's prior knowledge is closely associated with the recognition of venture ideas. Sarasvathy's (2001) Effectuation theory proposes a high degree of relatedness between venture ideas and the resource position of the individual. Thus, entrepreneurs may be more attracted to venture ideas that are closely aligned with the knowledge and/or resources they already possess. On the other hand, the potential financial gain (Shepherd & DeTienne, 2005) may be larger for ideas that are not close to the entrepreneurs' home turf. Therefore, potential financial gain is a stimulus that has to be considered separately. We aim to examine how entrepreneurs weigh considerations of different forms of newness and relatedness as well as potential financial gain in assessing the attractiveness of venture ideas. We use conjoint analysis to determine how expert entrepreneurs develop preferences for venture ideas which involved with different degrees of newness, relatedness and potential gain. This analytical method paves way to measure the trade-offs they make when choosing a particular venture idea. The conjoint analysis estimates respondents' preferences in terms of utilities (or part-worth) for each level of newness, relatedness and potential gain of venture ideas. A sample of 50 expert entrepreneurs who were awarded young entrepreneurship awards in Sri Lanka in 2007 is used for interviews. Each respondent is interviewed providing with 32 scenarios which explicate different combinations of possible profiles open them into consideration. Conjoint software (SPSS) is used to analyse data. Results and Implications : The data collection of this study is still underway. However, results of this study will provide information regarding the attractiveness of each level of newness, relatedness and potential gain of venture idea and their relative importance in a business model. Additionally, these results provide important implications for entrepreneurs, consultants and other stakeholders as regards the importance of different of attributes of venture idea coupled with different levels. Entrepreneurs, consultants and other stakeholders could make decisions accordingly.

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.

How can entrepreneurial musicians use electronic social networks to diffuse their music

Principal Topic: ''In less than ten years music labels will not exist anymore.'' Michael Smelli, former Global COO Sony/BMG MCA/QUT IMP Business Lab Digital Music Think Thanks 9 May 2009, Brisbane Big music labels such as EMI, Sony BMG and UMG have been responsible for promoting and producing a myriad of stars in the music industry over the last decades. However, the industry structure is under enormous threat with the emergence of a new innovative era of digital music. Recent years have seen a dramatic shift in industry power with the emergence of Napster and other file sharing sites, iTunes and other online stores, iPod and the MP3 revolution. Myspace.com and other social networking sites are connecting entrepreneurial artists with fans and creating online music communities independent of music labels. In 2008 the digital music business internationally grew by around 25% to 3.7 Billion US-Dollar. Digital platforms now account for around 20% of recorded music sales, up from 15 % in 2007 (IFPI Digital music report 2009). CD sales have fallen by 40% since their peak levels. Global digital music sales totalled an estimated US$ 3 Billion in 2007, an increase of 40% on 2006 figures. Digital sales account for an estimated 15% of global market, up from 11% in 2006 and zero in 2003. The music industry is more advanced in terms of digital revenues than any other creative or entertainment industry (except games). Its digital share is more than twice that of newspapers (7%), films (35) or books (2%). All these shifts present new possibilities for music entrepreneurs to act entrepreneurially and promote their music independently of the major music labels. Diffusion of innovations has a long tradition in both sociology (e.g. Rogers 1962, 2003) and marketing (Bass 1969, Mahajan et al., 1990). The context of the current project is theoretically interesting in two respects. First, the role of online social networks replaces traditional face-to-face word of mouth communications. Second, as music is a hedonistic product, this strongly influences the nature of interpersonal communications and their diffusion patterns. Both of these have received very little attention in the diffusion literature to date, and no studies have investigated the influence of both simultaneously. This research project is concerned with the role of social networks in this new music industry landscape, and how this may be leveraged by musicians willing to act entrepreneurially. Our key research question we intend to address is: How do online social network communities impact the nature, pattern and speed that music diffuses? Methodology/Key Propositions : We expect the nature/ character of diffusion of popular, generic music genres to be different from specialized, niche music. To date, only Moe & Fader (2002) and Lee et al. (2003) investigated diffusion patterns of music and these focus on forecast weekly sales of music CDs based on the advance purchase orders before the launch, rather than taking a detailed look at diffusion patterns. Consequently, our first research questions are concerned with understanding the nature of online communications within the context of diffusion of music and artists. Hence, we have the following research questions: RQ1: What is the nature of fan-to-fan ''word of mouth'' online communications for music? Do these vary by type of artist and genre of music? RQ2: What is the nature of artist-to-fan online communications for music? Do these vary by type of artist and genre of music? What types of communication are effective? Two outcomes from research social network theory are particularly relevant to understanding how music might diffuse through social networks. Weak tie theory (Granovetter, 1973), argues that casual or infrequent contacts within a social network (or weak ties) act as a link to unique information which is not normally contained within an entrepreneurs inner circle (or strong tie) social network. A related argument, structural hole theory (Burt, 1992), posits that it is the absence of direct links (or structural holes) between members of a social network which offers similar informational benefits. Although these two theories argue for the information benefits of casual linkages, and diversity within a social network, others acknowledge that a balanced network which consists of a mix of strong ties, weak ties is perhaps more important overall (Uzzi, 1996). It is anticipated that the network structure of the fan base for different types of artists and genres of music will vary considerably. This leads to our third research question: RQ3: How does the network structure of online social network communities impact the pattern and speed that music diffuses? The current paper is best described as theory elaboration. It will report the first exploratory phase designed to develop and elaborate relevant theory (the second phase will be a quantitative study of network structure and diffusion). We intend to develop specific research propositions or hypotheses from the above research questions. To do so we will conduct three focus group discussions of independent musicians and three focus group discussions of fans active in online music communication on social network sites. We will also conduct five case studies of bands that have successfully built fan bases through social networking sites (e.g. myspace.com, facebook.com). The idea is to identify which communication channels they employ and the characteristics of the fan interactions for different genres of music. We intend to conduct interviews with each of the artists and analyse their online interaction with their fans. Results and Implications : At the current stage, we have just begun to conduct focus group discussions. An analysis of the themes from these focus groups will enable us to further refine our research questions into testable hypotheses. Ultimately, our research will provide a better understanding of how social networks promote the diffusion of music, and how this varies for different genres of music. Hence, some music entrepreneurs will be able to promote their music more effectively. The results may be further generalised to other industries where online peer-to-peer communication is common, such as other forms of entertainment and consumer technologies.