From Obstacle to Opportunity: Problem-Solving and Competence Creation in New Firms

Centre for Technology Management (CTM) Working Paper, No. 2004/03

24 Pages Posted: 6 Sep 2011

See all articles by Oliver Hugo

Oliver Hugo

University of Cambridge - Centre for Technology Management

Elizabeth W. Garnsey

University of Cambridge - Judge Business School

Date Written: August 1, 2004

Abstract

This paper aims to identify how entrepreneurial responses to ‘barriers’ can give rise to opportunities for new firms. The poor predictive record of studies analysing success attributes and favourable initial factors as determinants of new firm growth reflects the diversity of entrepreneurial responses to problems of growth, as illustrated by three case studies of new companies which were able to overcome adverse initial conditions despite the lack of early ‘success attributes’. They did so by finding alternative opportunities and by achieving resource economy, resource leverage and resource creation, aided by strategic relationships formed with other players. Spurred by the problems they encounter, entrepreneurial firms revise their business conjecture and engage in innovative activities, their business model evolving through trial and error. Creative responses to unexpected developments by entrepreneurial decision makers have implications for research methodology and business support.

Keywords: Entrepreneurship, new firm development, Penrose, resource based perspective, process approach, case studies

JEL Classification: D21, L23, M13

Suggested Citation

Hugo, Oliver and Garnsey, Elizabeth W., From Obstacle to Opportunity: Problem-Solving and Competence Creation in New Firms (August 1, 2004). Centre for Technology Management (CTM) Working Paper, No. 2004/03, Available at SSRN: https://ssrn.com/abstract=1923120 or http://dx.doi.org/10.2139/ssrn.1923120

Oliver Hugo

University of Cambridge - Centre for Technology Management ( email )

Engineering Department
Trumpington Street
Cambridge, CB2 1PZ
United Kingdom

Elizabeth W. Garnsey (Contact Author)

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0) 1223 338183 (Phone)

HOME PAGE: http://www.jims.cam.ac.uk/people/faculty/garnseye.html

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