...collected in 1999from 134 small firms on science parks in Sweden. The discussion in this paper is focused at the firm level. Analysis of firm behavior was conducted using a multivariate approach. The content of firm-level behavior is defined in terms of the firm's overall collection of business practices and competitive tactics. The investigation of customer preferences and competitors are the manifestations of the firm's more basic strategic direction and how the firm will reach the markets. Two different types of firms were analyzed: university spin-offs (USOs) and corporate spin-offs (CSOs). The importance of the science park was included in the study as a control variable. The variable showed whether the firms had received support from a science park. This study indicated that the relations between change of marketing activities and long-term forecasting are strongest for both USOs and CSOs. The long-term forecasting, technology-importance of science park, was another key factor. This is exemplified by the two samples used in this study.

Introduction

Entrepreneurial orientation is often conceptualized as a latent construct composed of three dimensions: innovativeness, risk-taking, and proactiveness. These three components of entrepreneurship are argued by Miller (1983) to comprise a basic, undimensional strategic orientation. Innovativeness involves seeking creative or unusual solutions to problems and needs. In entrepreneur-ship research and economic studies, innovativeness is often viewed as a surrogate measurement for entrepreneur-ship (Miller and Friesen 1982). The risk-taking dimension refers to the willingness of management to commit significant resources to opportunities in the face of uncertainty. Proactiveness is defined in terms of the firm's propensity, aggressively and proactively, to compete with its rivals.

On the basis of this three-dimensional construct of entrepreneurial orientation, a firm's strategic posture can be established along a variant ranging from conservative to entrepreneurial (Covin and Slevin 1989; Miller and Friesen 1983). Conservative firms tend to be risk-adverse, noninnovative, and reactive. Entrepreneurial firms tend to be risk-takers, innovative, and proactive. The conservative-entrepreneurial dichotomy also shares similarities with some of the dichotomies developed in the new technology-based firm (NTBF) literature. Findings demonstrate that small firms are generally expected to favor differentiation strategies, because they will only rarely will be able to utilize economies of scale. Small firms may possess various bundles of resources that serve as the foundations for development. According to the resource-based view (Penrose 1959), differences in resources should be utilized and lead to differences in sustainable competitive advantage.

According to Borch, Huse, and Senneseth (1999), entrepreneurial firms will have strategies related to innovation and growth characterized by risk-taking. Innovation may be defined as the willingness to place strong emphasis on technological development (Slevin and Covin 1994). The advantages of studying entrepreneurship and small business management from a firm behavior perspective are that (Slevin and Covin 1994): (1) firm behavior, as strategy, structure, and performance, are more clearly understood than when only studying characteristics of individual entrepreneurs; (2) firm behavior is more easily measured than at the individual level; and (3) firm behavior is more manageable. A firm-level behavior can be managed by the creation of particular resources and strategies and may thus allow considerable managerial intervention.

In this paper, we extend the literature by exploring how NTBFs can link elements of customer preferences, marketing activities, long-term forecasting of markets, and technology in an entrepreneurial environment (science parks) regarding the background of the firm: university spin-offs (USDs) or corporate spin-offs (CSOs). We seek to contribute to further convergence between firm strategies, firm background, and the environment, by highlighting these important links. The importance of NTBFs on science parks is related to their performance: they are expected to "perform better" than the average firm. The attitudes and motivation of the firm founders and managers is a key factor in the ability to raise funds and achieve high growth and profitability.

The question for this research is: Do new academic technology-based firms (USOs) benefit from the science park location differently than NTBFs from the private sector (CSOs)?

The variables used in our study relate to several basic dimensions of a firm's external environment. These dimensions include environmental hostility: customer preferences, competitors, marketing activities and long-term forecasting of markets, and technology-forecasting activities. The control variables and the questions asked were measures of satisfaction regarding what the science park environment had contributed to the firms. We seek to contribute to further convergence between entrepreneurship, firm behavior and background by highlighting these important links.

Hostile Environments, NTBFs, and Science Parks

Hostile Environments and Markets

The literature on the entrepreneur-ship-environment fit suggests that conservative and entrepreneurial firms manifest quite different characteristics in coping with their environments. Dynamic environments, which often typify high-technology industries, were found to encourage entrepreneurial firm-level behavior (Miller, Droge, and Toulouse 1988; Khandwalla 1987). Higher levels of innovative, risk-taking behavior are also associated with uncertain environments (Pierce and Delbecq 1977). When firms are faced with hostile environments, as in the high-technology sector, an entrepreneurial strategic orientation contributes to greater performance. According to Yeoh and Jeong (1995), a more conservative strategic orientation appears to promote performance among small firms (Covin and Slevin 1989), in benign environments.

Yeoh and Jeong (1995) say that in conceptualizing the external environment in terms of environmental hostility (Covin and Slevin 1989), an entrepreneurial orientation may be of particular interest to small exporting firms in hostile environments. The markets in which small high-tech firms operate are competitive. Marketing is often especially difficult for technologically innovative firms, particularly when they are addressing new needs and markets. Independent technology firms have a much wider market distribution throughout the United Kingdom and abroad than is typical of other small firms (Monck et al. 1988). The "typical" pattern of heavy dependence on a limited number of customers or geographical markets was not demonstrated in Lofsten and Lindelof (2001). Almost 65 percent of the NTBFs customers were "other markets."

Information on the location of customers shows whether firms are linked to local, national, or international markets, and thereby their potential for growth. Market research and market planning are important. Given the short product life cycle of many technology-based products and services, there is a requirement to reach a large international market quickly to exploit the profit potential of the product. Lofsten and Lindelof (2001) showed some differences between the experience of firms on-park and off-park in respect of innovation and marketing/market research issues. On-park firms clearly place a greater emphasis on market research. Ackroyd (1995) identified 11 distinguishing characteristics of small high-technology firms, such as lack of hierarchy and boundaries, high mobility including growth and replication, and an impressive ability to respond quickly to technological and market developments. These firms are also very customer-oriented, and innovative: their growth is often constrained by skills shortage.

Miller (1987) means that there should be some common relationships between environmental dimensions and those of strategy. The dimensions of dynamism, hostility, and heterogeneity have often been used to characterize the environment. These are representative of key challenges facing firms and are summarized in Table 1. The marketing differentiation strategy will typically be used in response to intense hostility.

Certain environmental characteristics may elicit entrepreneurial behavior on the part of organizations (Covin and Slevin 1991). Dynamic environments have been found to encourage entrepreneurial firm-level behavior (Miller, Droge, Toulouse 1988). Organizations often respond to challenging environmental conditions, such as those in high-technology environments. Several studies indicate that the relationship between entrepreneurial posture and firm performance is moderated by environmental conditions.

According to Covin and Slevin (1991), an entrepreneurial posture is reflected in three types of organizational-level behaviors: (1) top management risk-taking with regard to...

NOTE: All illustrations and photos have been removed from this article.



Looking for additional articles?
Search our database of over 3 million articles.

Looking for more in-depth information on this industry?
Search our complete database of Industry & Market reports by text, subject, publication name or publication date.

About Goliath
Whether you're looking for sales prospects, competitive information, company analysis or best practices in managing your organization, Goliath can help you meet your business needs.

Our extensive business information databases empower business professionals with both the breadth and depth of credible, authoritative information they need to support their business goals. Whether it be strategic planning, sales prospecting, company research or defining management best practices - Goliath is your leading source for accurate information.