Organizational Routines and Capabilities in New Ventures
Babson College Entrepreneurship Research Conference (BCERC) 2005
Frontiers of Entrepreneurship Research 2005
14 Pages Posted: 21 Dec 2009
Abstract
Organizational routines and capabilities play a key role in organizational survival and prosperity. This inductive paper explores the interplay between the development of routines and capabilities in new firms. The rich field data revealed a surprising variety of processes through which new ventures develop routines and these routines intertwine with capabilities. Our findings show several distinct trajectories between routines and capabilities in new firms. For example, in some cases capabilities preceded supporting routines, rather than the other way around. Further, non-routine behavior including improvisational actions could provide foundations for capabilities.Our propositions advance theories of organizational learning and entrepreneurship. First, we uncovered a rich set of patterns through firms succeeded or failed to learn from their own experience in developing new routines and capabilities. Learning from failure in new ventures is aided by declarative knowledge but inhibited by procedural knowledge within founding team. Second, we also found a pattern of absorptive inertia – some new firms developed the capacity to absorb knowledge from outside the firm, but at the same time developed an unwillingness to absorb external knowledge.
Keywords: Entrepreneurship
JEL Classification: M13
Suggested Citation: Suggested Citation