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Scale Barriers And Growth Opportunities: A Resource-Based Model Of New Venture Expansion

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  • LOIS M. SHELTON

    (Chapman University, Argyros School of Business and Economics, USA)

Abstract

The concept of scale barriers is introduced to shed light on new venture growth. Growth is a process of overcoming resource deficiencies, or scale barriers, resulting from the liabilities of newness and smallness. New ventures employ a variety of resource accumulation strategies to surmount three types of barriers - competitive deficiencies, management and organizational deficiencies, and financial deficiencies. A theoretical model shows how environmental munificence and industry conditions influence barrier size while resource accumulation strategies and initial venture endowments determine a venture's ability to overcome these barriers. The difficulties of growth are illustrated as an extension of the difficulties of survival.

Suggested Citation

  • Lois M. Shelton, 2005. "Scale Barriers And Growth Opportunities: A Resource-Based Model Of New Venture Expansion," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 13(04), pages 333-357.
    • Handle: RePEc:wsi:jecxxx:v:13:y:2005:i:04:n:s0218495805000197
    DOI: 10.1142/S0218495805000197
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    Cited by:

    1. Dirk De Clercq & Deva Rangarajan, 2008. "The Role of Perceived Relational Support in Entrepreneur–Customer Dyads," Entrepreneurship Theory and Practice, , vol. 32(4), pages 659-683, July.
    2. Huan Zou & Xiaoyun Chen & Pervez Ghauri, 2010. "Antecedents and consequences of new venture growth strategy: An empirical study in China," Asia Pacific Journal of Management, Springer, vol. 27(3), pages 393-421, September.
    3. Scuotto, V & Nicotra, M. & Del Giudice, M. & Krueger, N. & Gregori, G.L., 2021. "A microfoundational perspective on SMEs’ growth in the digital transformation era," Journal of Business Research, Elsevier, vol. 129(C), pages 382-392.
    4. Warner, Stacy & Chalip, Laurence & Woolf, Jules, 2008. "Fan Development Strategy: The Austin Wranglers' Game Plan," Sport Management Review, Elsevier, vol. 11(3), pages 309-330, November.
    5. Deligianni, Ioanna & Voudouris, Irini & Lioukas, Spyros, 2015. "Growth paths of small technology firms: The effects of different knowledge types over time," Journal of World Business, Elsevier, vol. 50(3), pages 491-504.
    6. Chen, Xiaoyun & Zou, Huan & Wang, Danny T., 2009. "How do new ventures grow? Firm capabilities, growth strategies and performance," International Journal of Research in Marketing, Elsevier, vol. 26(4), pages 294-303.
    7. Ali Smida & Nabil Khelil, 2010. "Repenser l’échec entrepreneurial des petites entreprises émergentes," Post-Print halshs-02505930, HAL.
    8. Ian Blount & Mingxiang Li, 2021. "How Buyers' Attitudes Toward Supplier Diversity Affect Their Expenditures with Ethnic Minority Businesses," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(3), pages 3-24, July.
    9. Lois M. Shelton, 2010. "Fighting an Uphill Battle: Expansion Barriers, Intra–Industry Social Stratification, and Minority Firm Growth," Entrepreneurship Theory and Practice, , vol. 34(2), pages 379-398, March.
    10. Sumit K. Majumdar & Rabih Moussawi & Ulku Yaylacicegi, 2014. "Do Incumbents’ Mergers Influence Entrepreneurial Entry? An Evaluation," Entrepreneurship Theory and Practice, , vol. 38(3), pages 601-633, May.

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