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Business planning, idea change, flexibility and performance: the best of both worlds?

Garonne, Christophe & Davidsson, Per (2012) Business planning, idea change, flexibility and performance: the best of both worlds? In Zacharakis, A, Carter , S, Gruber , M, leleux , B, Corbett , A, Honig, B., et al. (Eds.) Frontiers of Entrepreneurship Research, Volume 31 - 2011: Proceedings of the 31st Annual Entrepreneurship Research Conference, Babson College, Arthur M. Blank Center for Entrepreneurship, Syracuse, New York, p. 431.

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      Abstract

      The relationships between business planning and performance have divided the entrepreneurship research community for decades (Brinckmann et al, 2010). One side of this debate is the assumption that business plans may lock the firm in a specific direction early on, impede the firm to adapt to the changing market conditions (Dencker et al., 2009) and eventually, cause escalation of commitments by introducing rigidity (Vesper, 1993). Conversely, feedback received from the production and presentation of business plans may also lead the firm to take corrective actions. However, the mechanisms underlying the relationships between changes in business ideas, business plans and the performance of nascent firms are still largely unknown.

      While too many business idea changes may confuse stakeholders, exhaust the firm’s resources and hinder the undergoing legitimization process, some flexibility during the early stages of the venture may be beneficial to cope with the uncertainties surrounding new venture creation (Knight, 1921; March, 1982; Stinchcombe, 1965; Weick, 1979). Previous research has emphasized adaptability and flexibility as key success factors through effectual logic and interaction with the market (Sarasvathy, 2001; 2007) or improvisation and trial-and-error (Miner et al, 2001). However, those studies did not specifically investigate the role of business planning.

      Our objective is to reconcile those seemingly opposing views (flexibility versus rigidity) by undertaking a more fine-grained analysis at the relationships between business planning and changes in business ideas on a large longitudinal sample of nascent firms.

      Impact and interest:

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      ID Code: 53860
      Item Type: Conference Paper
      Keywords: Business Planning, Idea Change, Flexibility , Performance
      ISBN: 0-910897-34-4
      Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Entrepreneurship (150304)
      Divisions: Current > Research Centres > Australian Centre for Business Research
      Current > Research Centres > Australasian CRC for Interaction Design (ACID)
      Current > QUT Faculties and Divisions > QUT Business School
      Current > Schools > School of Management
      Deposited On: 28 Sep 2012 14:44
      Last Modified: 04 Oct 2012 14:17

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