Growth Orientation as Liability: Growth Strategy and Performance During Industry Slowdown

HEC Lausanne Institut Stratège Working Paper No. 2005-1

24 Pages Posted: 2 May 2005

Date Written: January 20, 2005

Abstract

We examined whether growth volition and related strategies and organizational structures have a robust positive effect on growth during a period of dramatic slowdown in industry growth. Received literature has not examined this question using longitudinal study designs. We found that a dominant growth orientation strategy may lead to sub-optimal performance in such conditions because of inertial forces that hamper the adjustment of strategies. Specifically, and as an interesting contribution to received literature, we found that the presence of external investors can operate as a strong traditionalizing force which hampers the firm's ability to modify its strategies during dramatic slowdown in industry growth. We employed longitudinal study design in the context of Finnish software product firms during the period from 1998 to 2002. This period and context represents a particularly dramatic change in an industry's fortunes, thus making it an appropriate context for our study.

Keywords: Entrepreneurship , growth, growth orientation

JEL Classification: M13

Suggested Citation

Autio, Erkko and Autere, Jussi, Growth Orientation as Liability: Growth Strategy and Performance During Industry Slowdown (January 20, 2005). HEC Lausanne Institut Stratège Working Paper No. 2005-1, Available at SSRN: https://ssrn.com/abstract=710721 or http://dx.doi.org/10.2139/ssrn.710721

Erkko Autio (Contact Author)

HEC Lausanne ( email )

Institut Stratège
BFSH1
Lausanne, 1015
Switzerland

Jussi Autere

Gearshift Group ( email )

+358 400 422 565 (Phone)

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