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Managerial determinants of decision speed in new ventures
Author(s) -
Forbes Daniel P.
Publication year - 2005
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.451
Subject(s) - new ventures , exploratory research , affect (linguistics) , business , venture capital , marketing , entrepreneurship , human capital , test (biology) , industrial organization , management , economics , sociology , finance , economic growth , paleontology , communication , anthropology , biology
This study helps to explain why some new ventures make strategic decisions more quickly than others. Drawing on life course theory and human capital theory, I develop a model of how entrepreneurs' individual characteristics affect new venture decision speed. I test the model using survey data from 98 Internet startups and their founder/managers. Results show that firms made faster decisions when they were managed by older entrepreneurs and by those with prior entrepreneurial experience. In addition, exploratory analyses indicating that fast decision‐making firms were more likely to close may indicate that prevailing theory in this area is contextually limited. Copyright © 2005 John Wiley & Sons, Ltd.