IDEAS home Printed from https://ideas.repec.org/p/cbr/cbrwps/wp413.html
   My bibliography  Save this paper

Turning Digital: Diversification in UK Design Consultancy Services

Author

Listed:
  • Wennberg, K.
  • Tether, B.
  • Li, C.
  • Mina, A.

Abstract

Why do small firms in emerging industries choose to diversify? Theories of strategic management suggest that diversification is driven by search for exogenous market opportunities, deployment of slack resources, or the exploitation of current knowledge. Institutional organization theory suggests that firms may diversify for reasons unrelated to performance, such as by mimicking similar firms. We analyse the diversification of small UK design consultancies into the field of digital design between 1996 and 2009, a period characterized by the dot-com 'boom', 'bust' and recovery. Panel data analyses reveal that financial performance had little causal impact upon diversification. Instead, most firms diversified into digital design triggered by internal growth aspirations or by the following of similar firms. We contribute to the literature on small firm growth and diversification by highlighting the interactive nature of strategic and institutional drivers to diversification, and their relationship with firms' internal growth aspirations.

Suggested Citation

  • Wennberg, K. & Tether, B. & Li, C. & Mina, A., 2010. "Turning Digital: Diversification in UK Design Consultancy Services," Working Papers wp413, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp413 Note: PRO-2
    as

    Download full text from publisher

    File URL: https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp413.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Johan Wiklund & Dean Shepherd, 2003. "Aspiring for, and Achieving Growth: The Moderating Role of Resources and Opportunities," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 1919-1941, December.
    2. Arora, Ashish & Arunachalam, V. S. & Asundi, Jai & Fernandes, Ronald, 2001. "The Indian software services industry," Research Policy, Elsevier, vol. 30(8), pages 1267-1287, October.
    3. James O. Fiet, 2007. "A Prescriptive Analysis of Search and Discovery," Journal of Management Studies, Wiley Blackwell, vol. 44(4), pages 592-611, June.
    4. Karl Wennberg, 2009. "Knowledge combinations and the survival of financial services ventures," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 259-276, April.
    5. Antonelli, Cristiano, 1999. "The Evolution of the Industrial Organisation of the Production of Knowledge," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 243-260, March.
    6. Klevorick, Alvin K. & Levin, Richard C. & Nelson, Richard R. & Winter, Sidney G., 1995. "On the sources and significance of interindustry differences in technological opportunities," Research Policy, Elsevier, vol. 24(2), pages 185-205, March.
    7. Coviello, Nicole & Munro, Hugh, 1997. "Network relationships and the internationalisation process of small software firms," International Business Review, Elsevier, vol. 6(4), pages 361-386, August.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Diversification; Business Services; SMEs; Market Entry;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbr:cbrwps:wp413. 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: (Ruth Newman and Georgie Cohen). General contact details of provider: http://www.cbr.cam.ac.uk .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.