Page 1 of 14

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 5

May 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 35

Entrepreneurial Strategy and Business Performance: The

Moderator Role Of Resources Acquisition in Nascent

Venture: A Proposed Framework.

1Rusnifaezah Musa, 2Noorashidah Hashim,

3Thi Lip Sam

1 School of Business Management, Universiti Utara Malaysia,

rusnifaezah@gmail.com

2 Centre of Entrepreneurial Development Institute, Universiti Utara Malaysia,

norashidah@uum.edu.my

3 School of Business Management, Universiti Utara Malaysia,

thi@uum.edu.my

Abstract

This conceptual paper is to study the

relationship between entrepreneurial

strategy and nascent venture performance of

Malay-owned nascent venture in Malaysia.

This paper proposes a framework which

illustrates the moderating role of resources

acquisition in the relationship between

entrepreneurial strategy and nascent venture

performance. The proposed framework is

developed based on the review of extant

literature. Based on the proposed framework,

it is presumed that the effect of

entrepreneurial strategy factors,

entrepreneurial orientation and

entrepreneurial bricolage on nascent venture

performance is dependent on whether

resources acquisition of online social

networking and government assistance

programs are supportive or not.

Keyword: Organizational life-cycle,

nascent venture performance, entrepreneurial

strategy, entrepreneurial orientation,

entrepreneurial bricolage, resources

acquisition, government assistance programs,

online social networking, conceptual

framework.

Introduction

In the entrepreneurship study, the organization

life cycle theory has been widely used by the

researchers to provide an understanding on the

development of the business venture. Most

entrepreneurship scholars agreed on the three

stage of organizational life cycle which are

emergence, adolescence and post adolescence in

the entrepreneurship research (Churchill &

1Lewis, 1983; Kazanjian & Drazin, 1990; Lester,

Parnell, & Carraher,2003) while recent study by

Duobiene (2013) agreed with established, grow- up and decline stage to represent the stage of

organizational life cycle. The early stage; the

Page 2 of 14

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 5

May 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 36

stage of emergence is found to be most crucial

stage not only for entrepreneurs, but also for a

researcher. In this stage, the review of nascent,

new or start-up studies remains to be a focal point

in entrepreneurship studies. Nascent

entrepreneurship research exposed it uniqueness

of the study where the discipline of the studies is

still at the early stage (Saade, 2013; Parker &

Belghitar, 2006) but has received much attention

in recent years. This area of study is crucial when

there is no consensus in definition of nascent, new

or start-up ventures. While for entrepreneurs, in

the emergence stage, there is a need of study to

determine the best strategy to develop their

business to the maturity stage. Most of the

entrepreneurship researchers agreed that the

creation of new venture contributes to the

economic growth of a country (Ahlstrom, 2010;

Wong, Ho & Autio, 2005; Wennekers & Thurik,

1999). While Acs and Szerb (2007) highlighted

in their study where there is a positive effect of

entrepreneurial activity on economic growth in

the highly develop countries while the negative

effect is found on the relationship entrepreneurial

activity and economic growth in the developing

country. Malaysia is ranked as the most ease in

doing business and the start-up business rate also

shows promising figure. This is proved by the

TEA rate and business density rate. Lowrey

(2005) defined business density as the number of

business firms per 1,000 persons. However, the

creation of nascent ventures in Malaysia do not

contributed to extensive gross of economic

growth and employment compared to Turkey and

Poland. In addition, although the result of

discontinue rate showed that Malaysian

entrepreneurs have low rate in discontinue of

business, but the closing business rank by

NationMaster (2014) proved that the higher

number, ranked 43 over 155 countries signifies

there were high number of business failure. This

evidence also leads to the need of study at nascent

ventures context as in this emerging stage, the

high number of nascent venture creation

contributes to high growth of economy in one’s

country.

In addition, recent study by Haltiwanger, Jarmin,

and Miranda (2013) found that, most of the

nascent ventures at the emerging stage contribute

substantially to the job creation. Previous studies

also agreed that the creation of nascent ventures

contributes to GDP growth (Davidsson, 2003;

Wagner, 2007). They further explained that the

venture’s age and net growth have weak

relationship when exclude starts-up while in the

survival perspectives, nascent and new ventures

contribute to the higher growth of employment.

This study envisaged the significance of starts-up

ventures plays a significant role towards

Malaysia economy (Hilmi & Ramayah, 2008;

Hashim & Hassan, 2008) and their development

also crucial in creating economic resilience and

national growth (Shinozaki, 2012). Although

nascent ventures play a significant role in

economic growth, however their emergence

remains debatable as not many ventures able to

survive in maturity stage of business life-cycle. a

study done by Jamak, Salleh, Sivapalan and

Abdullah (2011) indicates, “only 10 percent

of the start-ups business survived beyond 10

years marked while more than 90 percent of

new start-ups businesses have failed within 5

years of their operations” (p.863). Not to

mention, Malaysian researchers in

entrepreneurship studies also found out the

rate of failure among bumiputera where

majority are malay entrepreneurs is highest

(Roddin et al. 2011; Abu Bakar et al.,2004)

while non-bumiputera are seen more

proactive in generating wealth (Zainol &

Ayadurai, 2011; Zainol & Daud, 2011).

Understanding how nascent ventures emerge

is a major research challenge, especially in

Page 3 of 14

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 5

May 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 37

having a better explanation of how

entrepreneurial ventures are created and

developed is warranted (Alvarez and Barney,

2007). The entrepreneurial process is

inherently complex due to uncertainty

regarding how best to develop a business

concept (Bhave, 1994), acquire necessary

resources (Baker and Nelson, 2005), and

make effective decisions (Sarasvathy, 2001).

Thus, the nascent venture needs a broad set of

different competencies to be able to proceed

from an idea to a value creating firm. In

emerging phase, entrepreneurial strategy is

affected by initial benefactions. Unlike

established ventures, nascent ventures often

begin with few resources (Hallen &

Eisenhardt, 2012) and face many challenges

that reduce their chances of survival and

success. As a result, entrepreneurs attempt to

deal with resource deficiencies such as

having few partners, limited financial capital,

may not have well-accepted markets for their

products and services; and they often operate

in highly ambiguous contexts (Stinchcombe

& March, 1965). Entrepreneurial strategy is

defined as “the patterns of decisions that

shape the venture’s resource configuration

and deployment and guide alignment with the

environment” (Dollinger, 2008). resources

acquisition is vital for nascent ventures to

survive. In a contingencies perspective,

understanding of under which situations

entrepreneurial orientation enhances venture

performance is important to achieve the fit

between venture’s strategic posture and other

constructs of interest (Lumpkin & Dess, 1996).

Gaining access to external resources is often one

of the most important activities new ventures

must engage in, in order to grow or even survive.

The purposes of this study is to examines the

factors contributing to nascent ventures’

performance in Malaysia and to evaluate the

moderating effect of resources acquisition on the

relationship between entrepreneurial strategy and

performance of nascent venture in Malaysia.

Literature Review

Nascent venture performance

in emerging phase

In entrepreneurship research, the early stage of

venturing a business is regarded as critical stage

for most entrepreneurs. They need to manage

their resources efficiently in lessen the risk of

discontinuity of business and drives their venture

to be an establish venture (West & Noel, 2009).

Nascent venture is defined as a new and

independent start-up business by nascent

entrepreneurs or new entrepreneurs, where they

venturing the business on their own (Wagner,

2007). In the entrepreneurial process, nascent

ventures are in the second transition, between

gestation and infancy stage where in this process

(refer Figure 1), from the individual

entrepreneurs to fledgling firm and from

fledgling firm to new establish business

(Reynolds, 1994; Bosma & Amoros, 2013;

Wagner, 2004) and the age of venture is not more

than 5 years (Dzathor, Mosley & White, 2013;

Driessen & Zwart, 1999). From the GEM report

prepared by Bosma and Amoros (2013), nascent

entrepreneurs and new entrepreneurs are actively

engaging with the nascent activities in the

emerging stage of entrepreneurship.