A New Venture's Cognitive Legitimacy: An Assessment by Customers

摘要: Many legitimacy problems associated with new ventures appear to stem from a lack of customers' knowledge and understanding the venture. Of particular concern entrepreneurs is cognitive legitimacy. The findings this article suggest that customers have preference for greater rather than lesser information about venture's product, organization, management (holding content constant). Furthermore, use contingent decision policy. For an independent startup business perceived as on all three dimensions; priority should be given building customer in followed by organization. Less attention customer's team, although such actions still will build Introduction number launched U.S. has grown rapidly 600,000 per year 1970s approximately 3.5 million 1996 (Timmons 1999). A more recent report estimates there are over 7.3 efforts under way at any time (Zacharakis et al. These new, small expanding firms generate virtually jobs also 50 percent innovations 95 radical 1999; Vesper 1996). However, fail alarmingly high rate. Twenty-four within their first two years 63 six While dispute rate failure, it generally acknowledged do established (Hannan Freeman 1984; Singh 1986; Stinchcombe 1965). In light economic benefit derived ventures, important understand why fail. What unique (relative organizations) results higher mortality risk? Business failure been investigated scholars using industrial organization (10) strategy perspective (for example, see Ashforth Gibbs 1990; Pfeffer Salancik 1978) sociological 1965), among others. particularly interesting, specifically addresses uniqueness early stage life how increases organization's risk (the probability death due failure). Some sociology suggested liability newness, which includes costs learning tasks (Singh 1965); characteristics product; strength conflicts regarding organizational roles presence or absence informal structures (Stinchcombe stability links key stakeholders degree stability/inertia 1984). Sociologists argue obtaining central process survival organizations More generally, faced newer due, part, external 1986). External conferred venture when its endorsed powerful collective actors 1968) strong relationships developed constituencies (Aldrich Fiol 1994; Hannan Carroll 1992). By gaining (including suppliers, distributors, customers, employees, society, etc.), finds easier obtain access resources respond competitive threats (Baum Oliver 1991) attract (Wiewel Hunter 1985). …