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Judging a business by its cover: An institutional perspective on new ventures and the business plan


  • Karlsson, Tomas
  • Honig, Benson


Business plans are widely spread among new businesses, and they are supported by various universities, governmental assistance agencies, management consultants and a wide array of literature. Business plans are often taken for granted as highly useful tools that should be frequently updated and used. This study is based on data from six companies and their environments, over five years, using several forms of data collection such as interviews, observations, and archival data. In contrast to previous studies, we found that initial conformity to business plan norms gradually and without exception lead to loose coupling. Entrepreneurs who wrote business plans never updated or rarely referred to their plans after writing them.

Suggested Citation

  • Karlsson, Tomas & Honig, Benson, 2009. "Judging a business by its cover: An institutional perspective on new ventures and the business plan," Journal of Business Venturing, Elsevier, vol. 24(1), pages 27-45, January.
  • Handle: RePEc:eee:jbvent:v:24:y:2009:i:1:p:27-45

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    References listed on IDEAS

    1. Wim Vanhaverbeke, 2001. "Realizing new regional core competencies: establishing a customer-oriented SME network," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(2), pages 97-116, April.
    2. Gartner, William B. & Birley, Sue, 2002. "Introduction to the special issue on qualitative methods in entrepreneurship research," Journal of Business Venturing, Elsevier, vol. 17(5), pages 387-395, September.
    3. Dean A. Shepherd & Andrew Zacharakis, 1999. "Conjoint analysis: A new methodological approach for researching the decision policies of venture capitalists," Venture Capital, Taylor & Francis Journals, vol. 1(3), pages 197-217, July.
    4. Venkataraman, Sankaran, 2004. "Regional transformation through technological entrepreneurship," Journal of Business Venturing, Elsevier, vol. 19(1), pages 153-167, January.
    5. Dodd, Sarah Drakopoulou, 2002. "Metaphors and meaning: A grounded cultural model of us entrepreneurship," Journal of Business Venturing, Elsevier, vol. 17(5), pages 519-535, September.
    6. Scott Shane & Daniel Cable, 2002. "Network Ties, Reputation, and the Financing of New Ventures," Management Science, INFORMS, vol. 48(3), pages 364-381, March.
    7. Delmar, Frederic & Shane, Scott, 2004. "Legitimating first: organizing activities and the survival of new ventures," Journal of Business Venturing, Elsevier, vol. 19(3), pages 385-410, May.
    8. A. W. Coats, 1996. "Introduction," History of Political Economy, Duke University Press, vol. 28(5), pages 3-11, Supplemen.
    9. Carter, Nancy M. & Gartner, William B. & Reynolds, Paul D., 1996. "Exploring start-up event sequences," Journal of Business Venturing, Elsevier, vol. 11(3), pages 151-166, May.
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    Cited by:

    1. Fisher, Greg & Kuratko, Donald F. & Bloodgood, James M. & Hornsby, Jeffrey S., 2017. "Legitimate to whom? The challenge of audience diversity and new venture legitimacy," Journal of Business Venturing, Elsevier, vol. 32(1), pages 52-71.
    2. Ruebottom, Trish, 2013. "The microstructures of rhetorical strategy in social entrepreneurship: Building legitimacy through heroes and villains," Journal of Business Venturing, Elsevier, vol. 28(1), pages 98-116.
    3. Troilo, Michael & Bouchet, Adrien & Urban, Timothy L. & Sutton, William A., 2016. "Perception, reality, and the adoption of business analytics: Evidence from North American professional sport organizations," Omega, Elsevier, vol. 59(PA), pages 72-83.
    4. Chwolka, Anne & Raith, Matthias G., 2012. "The value of business planning before start-up — A decision-theoretical perspective," Journal of Business Venturing, Elsevier, vol. 27(3), pages 385-399.


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