Resource orchestration in start-ups: Synchronizing human capital investment, leveraging strategy, and founder start-up experience
Noni Symeonidou, Nicos Nicolaou
Strategic Entrepreneurship Journal · 2018 · Volume 12 · Issue 2
Abstract
Research Summary:We examine the performance effects of resource orchestration in start-ups by investigating three key contingencies of resource orchestration: human capital (HC) investment relative to rivals, leveraging strategy, and founder start-up experience. We find that deviating from rivals' resource investments (either above or below the industry mean) negatively affects performance, while conforming to the norms set by rivals positively affects performance. However, we also find that a higher investment in HC relative to rivals is less detrimental when aligned with a leveraging strategy focused on innovation. In addition, we find evidence that this relationship is conditioned by the entrepreneurial experience of the founders themselves. Managerial Summary:To create value, entrepreneurs need to assemble and manage various resources and capabilities. We explain how entrepreneurs can manage their resources to achieve higher performance. Using a sample of U.S. start-ups, we find that deviations in human capital (HC) investments relative to rivals (either below or above) harm the performance of start-ups. However, we also find that a higher investment in HC relative to rivals is less detrimental when the start-up is focused on innovation. In addition, we find thatexperiencedfounders benefit from actively orchestrating HC investments relative to rivals with a strategy focused on innovation.
Keywords
dynamic managerial capabilities, human capital investment, new ventures, resource orchestration, strategic entrepreneurship
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