II-S2

SUMMARY

THE OPPORTUNITY DISCOVERY PROCESS: RESOURCE AND PERFORMANCE IMPLICATIONS

Gaylen N. Chandler, Utah State University and Jönköping International Business School
Per Davidsson, Jönköping International Business School
Jonas Dahlqvist, Jönköping International Business School

Principal Topic

There seems to be little current effort to understand the circumstances that are favorable to the detection and exploitation of opportunities. The actual process followed is likely to be influenced by antecedent conditions such as availability of financial, organizational, intellectual, and technical resources and may be may be influenced by other environmental conditions. The antecedent conditions and the discovery process itself may have implications for subsequent performance outcomes. The proposed research has two central questions: (1) How do environmental and organizational circumstances impact the opportunity discovery process? (2) How does the opportunity discovery process influence subsequent performance outcomes?

Method

The data for this study were collected from a panel of 7256 firms that have been tracked since their start-up in 1994. The original sample was a 30% stratified random sample of all new business registrations in Sweden during 1994. Since its inception, the panel has been surveyed in the years 1998, 2000 and 2001. In order to find firms involved in new business initiatives, a two-stage screening procedure was used on the approximately 4950 firms that were still in the panel at the end of 2000. This process generated a sub-sample of 250 firms that received a paper questionnaire in June 2001. Usable responses were obtained from the directors of 136 firms, resulting in an effective 54% response rate. Based on responses to questionnaire items we conducted a hierarchical cluster analysis. After identifying three major processes, we used multiple discriminant analysis to isolate differences between groups with respect to antecedent resource availability and outcomes of reaching new product/service milestones and financial performance.

Results and Implications

Results indicate that three major processes were followed: proactive search, reactive search, and fortuitous discovery. Preliminary results indicate that there are differences among firms involved in each of the three different processes. These differences are evident with respect to the available organizational, intellectual, financial and technological resources. Firms employing proactive search processes tend to complete necessary gestation milestones more rapidly and reach sales and profitability more rapidly.

Ongoing surveys of the panel will provide information about longer term performance outcomes associated with the discovery process. We believe the research provides a new perspective on the opportunity discovery process and thus makes a substantial contribution to both theory and practice.

CONTACT: Gaylen N. Chandler, Dept. of Management and Human Resources, Utah State University, Logan, UT 84322-3555; (T) 435-797-2365; (F) 435-797-1091; chandler@b202.usu.edu