Management, strategy, and industry structure as influences on the success of new firms: A structural model

This study develops and tests a model examining the interrelationships and relative importance of management characteristics, business strategy and industry structure as influences on the performance of new, technology based companies. For a sample of 36 companies the founding managers had a sizeable influence on the quality of the industry/strategy positions, though exogenous forces were even more important; and regardless of source, industry/strategy positions exerted important influence on performance. Management characteristics influenced success through implementation, in addition to their influence on industry/strategy. The study demonstrates the effect of the founding managers on the eventual performance of a new venture. It suggests that formulation of the initial concept and execution of that concept call upon different characteristics, and therefore may be separable. That is, one group might initially devise the plan and another carry it out.