The Importance of the Entrepreneur’s Perception of “Success”
Purpose - In spite of the fact that the success of new ventures has been a widely studied topic in the field of entrepreneurship, no consensus on what is understood by the success of a firm can be found in the literature. Thus, the objective of this work is to discover what the entrepreneur really understands by the success of his/her business in its early years. To that end, this study clarifies the principal indicators used by entrepreneurs and analyses the relationship between how entrepreneurs understand the success of their business and the performance of that business. Design/methodology/approach – In a logit regression model, the research data are analyzed, using a sample of 98 entrepreneurs who are the heads of new firms in various sectors of activity. Findings - The study shows that there is a relationship between the way in which the entrepreneur measures how the business is doing and the performance of that business. More specifically, this research reveals that it is not the use of a greater number of indicators to measure the success that identifies the successful newly-created business from the unsuccessful, but the fact that those indicators are from different perspectives. Moreover, the results show that customer-related indicators are more effective than financial indicators to distinguish between successful and unsuccessful organizations. Research limitations/implications – Future research including qualitative interviews will help to further investigate the relationship between the entrepreneur’s perception of success and company performance. Practical implications – As a result of this research, the entrepreneurs can be conscience about how important it is the way they understand “the success” before they constitute their business. The results of this study mean a valuable knowledge to the academics that research in the entrepreneurship field, specifically to those that are focused on the success factors study. Originality/value – This research is pioneering in relating the way that the entrepreneur measures his company’s success and demonstrating its importance.
Volume (Year): 10 (2009)
Issue (Month): 5 (December)
|Contact details of provider:|| Postal: |
Web page: http://www.management.ase.ro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Man, Thomas W. Y. & Lau, Theresa & Chan, K. F., 2002. "The competitiveness of small and medium enterprises: A conceptualization with focus on entrepreneurial competencies," Journal of Business Venturing, Elsevier, vol. 17(2), pages 123-142, March.
- Audretsch, David B. & Keilbach, Max, 2002.
"Entrepreneurship Capital and Economic Performance,"
ZEW Discussion Papers
02-76, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Audretsch, David B & Keilbach, Max, 2003. "Entrepreneurship Capital and Economic Performance," CEPR Discussion Papers 3678, C.E.P.R. Discussion Papers.
- David B. Audretsch & Max Keilbach, 2004. "Entrepreneurship Capital and Economic Performance," Papers on Entrepreneurship, Growth and Public Policy 2004-01, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004.
"The Value of Human and Social Capital Investments for the Business Performance of Startups,"
Small Business Economics,
Springer, vol. 23(3), pages 227-236, October.
- Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2002. "The Value of Human and Social Capital Investments for the Business Performance of Start-ups," Tinbergen Institute Discussion Papers 02-027/3, Tinbergen Institute.
- Gerrit de Wit & Niels Bosma & Roy Thurik & Mirjam van Praag, 2002. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Scales Research Reports N200204, EIM Business and Policy Research.
- Zahra, Shaker A. & Bogner, William C., 2000. "Technology strategy and software new ventures' performance: Exploring the moderating effect of the competitive environment," Journal of Business Venturing, Elsevier, vol. 15(2), pages 135-173, March.
- Bamford, Charles E. & Dean, Thomas J. & McDougall, Patricia P., 2000. "An examination of the impact of initial founding conditions and decisions upon the performance of new bank start-ups," Journal of Business Venturing, Elsevier, vol. 15(3), pages 253-277, May.
- McDougall, Patricia P. & Robinson, Richard Jr. & DeNisi, Angelo S., 1992. "Modeling new venture performance: An analysis of new venture strategy, industry structure, and venture origin," Journal of Business Venturing, Elsevier, vol. 7(4), pages 267-289, July.
- Duchesneau, Donald A. & Gartner, William B., 1990. "A profile of new venture success and failure in an emerging industry," Journal of Business Venturing, Elsevier, vol. 5(5), pages 297-312, September.
- Baron, Robert A. & Markman, Gideon D., 2003. "Beyond social capital: the role of entrepreneurs' social competence in their financial success," Journal of Business Venturing, Elsevier, vol. 18(1), pages 41-60, January.
- Santos-Requejo, Libia & Gonzalez-Benito, Oscar, 2000. " Economic Success Factors in Spanish Small Retail Businesses: An Analysis Based on Sector-Relative Definitions," Small Business Economics, Springer, vol. 15(3), pages 209-22.
- Chandler, Gaylen N. & Hanks, Steven H., 1993. "Measuring the performance of emerging businesses: A validation study," Journal of Business Venturing, Elsevier, vol. 8(5), pages 391-408, September.
- Gavin C Reid & Julia A Smith, 1996.
"What Makes a New Business Start-Up Successful?,"
CRIEFF Discussion Papers
9618, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Herron, Lanny & Robinson, Richard Jr., 1993. "A structural model of the effects of entrepreneurial characteristics on venture performance," Journal of Business Venturing, Elsevier, vol. 8(3), pages 281-294, May.
- Libia Santos-Requejo & Óscar González-Benito, 2000. "Economic Success Factors in Spanish Small Retail Businesses. An Analysis Based on Sector-Relative Definitions," Small Business Economics, Springer, vol. 15(3), pages 209-222, November.
- Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
- Watson, Warren & Stewart, Wayne Jr. & BarNir, Anat, 2003. "The effects of human capital, organizational demography, and interpersonal processes on venture partner perceptions of firm profit and growth," Journal of Business Venturing, Elsevier, vol. 18(2), pages 145-164, March.
- Stuart, Robert & Abetti, Pier A., 1987. "Start-up ventures: Towards the prediction of initial success," Journal of Business Venturing, Elsevier, vol. 2(3), pages 215-230.
- Reynolds, Paul D., 1987. "New firms: Societal contribution versus survival potential," Journal of Business Venturing, Elsevier, vol. 2(3), pages 231-246.
- Zahra, Shaker A. & Covin, Jeffrey G., 1995. "Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis," Journal of Business Venturing, Elsevier, vol. 10(1), pages 43-58, January.
- Brush, Candida G. & Vanderwerf, Pieter A., 1992. "A comparison of methods and sources for obtaining estimates of new venture performance," Journal of Business Venturing, Elsevier, vol. 7(2), pages 157-170, March.
- Murphy, Gregory B. & Trailer, Jeff W. & Hill, Robert C., 1996. "Measuring performance in entrepreneurship research," Journal of Business Research, Elsevier, vol. 36(1), pages 15-23, May.
- Bruderl, Josef & Preisendorfer, Peter, 1998. " Network Support and the Success of Newly Founded Businesses," Small Business Economics, Springer, vol. 10(3), pages 213-25, May.
When requesting a correction, please mention this item's handle: RePEc:rom:rmcimn:v:10:y:2009:i:5:p:990-1010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marian Nastase)
If references are entirely missing, you can add them using this form.