Path Dependency of Company Growth Sample Clauses

Path Dependency of Company Growth. ‌ To understand the sequencing and timing of capability development in technology-based new ventures, I reflect on the notion of path dependency as an important element of organisational research (Sydow, Schreyögg, and Koch 2005). Path dependency is mostly neglected in microeconomic theory where firms encounter an unlimited range of technologies and markets. Changes of product or factor costs are immediately addressed by replacing technologies according to criteria of value maximisation. Irreversibility does not exist in the end. In microeconomic theory, company history does not constrain future investments. Thus, path dependency is not considered, which represents a major limitation (Teece, Pisano, and Shuen 1997). Contrary to microeconomic theory, the notion of path dependency advocates the relevance of history. In fact, “history matters” since “bygones are rarely bygones” (Xxxxx, Xxxxxx, and Xxxxx 1997, p. 522). Path dependency is highly important with respect to the development of organisations. Reflecting on chapter 2.2.4, dynamic capabilities are path dependent and determined by the learning efforts of the firm. Different scholars (e.g., Xxxxxxxx and Cool 1989; Xxxxxx and Xxxxxxx 2003; Xxxxxxxxxx and Deeds 2006) identified three main aspects of these learning efforts: current resource endowments, past decisions as well as managerial competence and experience. In the following three chapters, I elaborate on these three determinants of capability development to investigate further the growth processes of technology start-ups regarding the timing and sequencing of dynamic capability evolution. Therefore, I derive various hypotheses that address the characteristics of entrepreneurial growth paths. In addition, I formulate hypotheses that link certain paths to company performance. Although this approach does not consider the entire process of organisational development, it sheds light on very specific elements of new venture growth.
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