Reading Tea Leaves Through a Warped Crystal Ball: How Experience and Divergence from Organizational Routines Influence Forecasts

34 Pages Posted: 30 Jan 2009 Last revised: 10 Mar 2013

See all articles by Russell Wayne Coff

Russell Wayne Coff

University of Wisconsin - Madison - School of Business

Rodolphe Durand

HEC Paris - Strategy & Business Policy

Violetta Gerasymenko

HEC Paris

Date Written: January 30, 2009

Abstract

Strategic management research highlights how routines can enhance efficiency and ultimately serve as a source of competitive advantage. However, there has been little research on the divergence from routines and how this might impact perceptions of strategic investments. Here, we explore how firms evaluate performance prospects for high-risk innovative investments using a survey of 23 French venture capital funds investing in over 300 startup firms. We test whether past experience and non-routine interventions influence fund managers' assessments of future performance for each startup of their portfolio. Findings suggest that positive past experience and suspension of investment management routines positively influence assessments of future prospects. These results entail important theoretical and epistemological consequences for future strategic management research.

Suggested Citation

Coff, Russell Wayne and Durand, Rodolphe and Gerasymenko, Violetta, Reading Tea Leaves Through a Warped Crystal Ball: How Experience and Divergence from Organizational Routines Influence Forecasts (January 30, 2009). Atlanta Competitive Advantage Conference 2009 Paper. Available at SSRN: https://ssrn.com/abstract=1335529 or http://dx.doi.org/10.2139/ssrn.1335529

Russell Wayne Coff (Contact Author)

University of Wisconsin - Madison - School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

Rodolphe Durand

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Violetta Gerasymenko

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

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