Built to Sustain: The Effect of Entrepreneurial Decision-Making Logic on New Venture Sustainability

Abstract

How entrepreneurs make entrepreneurial decisions to improve entrepreneurial performance is a popular concern in both theoretical and practical circles. Existing studies mostly analyze the effect of entrepreneurial decision-making logic on the survival and growth of new ventures from the perspective of financial performance, but few studies focus on new venture sustainability. Based on datasets from the first two survey rounds of CPSED (Chinese Panel Study of Entrepreneurial Dynamics), this paper selects a group of 259 entrepreneurs as a sample and uses logistic regression analysis as a research method. The purpose of this study is to examine the effects of entrepreneurial decision-making logic on new venture sustainability. There are two main entrepreneurial logics, namely effectuation and causation. The paper discusses causation in terms of four dimensions, namely goal orientation, expected returns, competitive analysis, and avoiding contingencies. It examines effectuation in terms of the dimensions of means orientation, affordable loss, partnerships, and leveraging contingencies. The empirical results show that goal orientation plays a negative role in promoting new venture sustainability, while avoiding contingencies has a positive influence on it. Partnerships are conducive to new venture sustainability, while means orientation and leveraging contingencies have a negative effect.

Exploring the affordable loss principle: a systematic literature review

“…In the Performance cluster, for example, Deligianni (2023) analyzes internationalization performance from the perspective of the ALP principle the company's performance in environments of uncertainty (Fischer, Greven, Tornow, & Brettel, 2021;Haneberg, 2021;Long, Wang, & Wang, 2021;Monllor, Pavez, & Pareti, 2020), and other studies analyze the ALP and innovation sectors (Li, Zou, Guo, & Guo, 2022;Nyoni & Moos, 2022). The article with the most connec-tions is the work by Deligianni, Voudouris and Lioukas (2017).…”

New venture top management team's shared leadership and its indirect effect on strategic performance: findings from SEM and fsQCA

“…From the start, a new venture must seriously think about how to operate sustainably (Parrish, 2010;Fischer et al, 2020;Long et al, 2021) or contemplate how it can obtain strategicrather than just financialperformance (West and Noel, 2009;Khattak and Ullah, 2021). Therefore, it is crucial to identify the antecedents that affect new ventures' strategic performance.…”

Driving New Venture Sustainability: A Study Based on Configuration Theory and Resource Orchestration Theory

“…New venture sustainability plays a huge role in the long-term development of new ventures and is an important foundation for social progress and economic stability. There is currently no consensus in academia on the concept of new venture sustainability [36].Ronald et al [37] argue that new venture sustainability refers to the performance of new ventures in balancing the social, economic and environmental aspects. Salzmann [38] points out that sustainability requires the consideration of many factors, such as environment, society and profit.…”