When Is Less More? Boundary Conditions of Effective Entrepreneurial Bricolage.
Entrepreneurial bricolage is a coping mechanism for early-stage, resource-constrained ventures by applying combinations of resources available, which others usually regard as useless as potential resources, to new problems and opportunities. As firms deploy capabilities despite lacking usual resources that competitors normally rely on, they can solve problems or face challenges that they would not have otherwise been able to. Thus, through a resource replacement mechanism, bricolage enhances venture competitiveness through new or improved organizational capability.
However, bricolage comes with reduced firm’s functional performance and reliability compared to when standard resources are used. Solutions derived from bricolage are labelled “second-best solutions” as they usually are imperfect, has lots of bugs and gaps, frictions, and unusable components. Moreover, bricolage solutions are often fragile, unreliable, and prone to continuous maintenance, adjustments, and fixes, thus creating “tinkering traps” that require firms to repeatedly invest time and attention on bug fixing. The intertwined mechanisms of “second-best solutions” and “tinkering traps” may thus create a accumulation of compromises for ventures, which may result in detrimental path dependencies that limit firm growth.
While literature on bricolage has identified its positive effects on new ventures’ development as well as negative performance outcomes, little is known about what determines its net effects. This paper explores the boundary conditions for effective bricolage. It draws on theoretical concepts in prior work to theorize the two important boundary conditions shaping the net effects of effective bricolage: the venture’s stage of development (nascent vs. operational) and its growth expectations. Through systematic empirical testing of hypotheses, it proposes a theoretical model through which venture stage and growth expectations influence the effects of bricolage on venture competitiveness.
Method and sample
A five-wave survey of early-stage ventures in Australia was conducted with a founder of each venture through phone interview. The first two waves, 12 months apart, were used to examine the influence of bricolage on the development of the venture’s competitiveness. Purposive sampling was used to sufficiently represent ventures that had not reached the operational stage and had adequate variance in growth expectations, resulting in a final primary sample of N=155. To test the hypotheses, the study also used a secondary random sample of N=456 that was statistically representative of the population of all early-stage ventures in Australia.
Key findings
It was found that venture stage has a moderating effect on the influence of bricolage on venture competitiveness such that the influence is more positive for nascent than for operational ventures. In fact, bricolage has a significant effect on the competitiveness of nascent ventures but no meaningful effect on that of operational ventures. However, the moderating effect of growth expectations on the influence of bricolage on competitiveness was found to be insignificant.
Through post hoc analysis, the study further explored whether growth expectations moderate the influence of bricolage on competitiveness of nascent ventures differently than operational ones. For nascent ventures, bricolage was found to increase competitiveness regardless of growth expectations. However, for operational ventures, the effect of bricolage on competitiveness is dependent on growth expectations, with bricolage more effective for high-expectations ventures. Especially in the primary sample, bricolage even has a negative effect on the competitiveness of low-expectations ventures.
Recommendations
The proposed theoretical framework helps clarify the common misconception that simply doing “too much” bricolage is what generates negative effects. Certain firms with higher expectations adopt higher acceptability thresholds and enact limitations in their use of bricolage to mitigate the negative effects of second-best solutions and tinkering traps, and thus the self-reinforcing accumulation of compromises. This does not mean firms necessarily should do less bricolage, which limits their benefits from resource replacements. Instead, they should do it in a way that allows them to avoid the accumulation of compromises and hence increase competitiveness.
Overall, entrepreneurial bricolage is a double-edged sword with both positive and negative impacts. Understanding the boundary conditions that shape when bricolage is more-or-less beneficial facilitates the decision-making process of early-stage ventures regarding employing resourcefulness in general and bricolage in particular not just as coping mechanisms but also means of advantage-seeking.
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This research is also available on eprints.