Sowing the seeds of failure: Organizational identity dynamics in new venture pivoting

Pivots as strategic responses to crises: Evidence from Italian companies navigating Covid-19

“…In line with previous research ( Berends et al, 2016 ), this process of experimentation on the firm’s business model takes place as a continuous interplay between cognition—through hypothesis formulation and learning that takes place at the layer of reflection—and action—through building, testing, and gathering market feedback, taking place at the layer of enactment. Experimentation can also provide fertile ground for overcoming the inertia toward identity-challenging innovation ( Garud and Karunakaran, 2018 ) that can encumber pivots, by sparking enthusiasm and fostering employee identification with the reorientation ( Snihur and Clarysse, 2022 ) as documented by our findings regarding the awareness of the pivot experience in the response stage.…”

“…However, previous studies assumed that firms could modulate the timing of their response when faced with unexpected events that lead to a pivot ( Berends et al, 2021 ), or that firms pivot as the result of multiple and incremental strategic changes over time ( Kirtley and O’Mahony, 2020 ). Through our study, we contend that pivots can provide a useful tool for any firm coping with the unexpected falsification of previously verified assumptions, such as crises, by enabling firms to move particularly quickly, repurposing existing resources ( Contigiani and Levinthal, 2019 ) to seek new opportunities ( Snihur and Clarysse, 2022 ), thus changing their course of action in a short amount of time. This view is also consistent with other previous accounts ( Camuffo et al, 2020 ; Contigiani and Levinthal, 2019 ; Eisenmann et al, 2013 ; Ries, 2011 ), that recognize pivots as vehicles of experimentation that allow firms to learn about the outcomes of otherwise unknowable endeavors ( Pillai et al, 2020 ).…”

“…Previous studies agree that the nature of pivots is inherently experimental ( Pillai et al, 2020 ). Pivots enable firms to learn when their business model is no longer viable ( Hampel et al, 2020 ; McDonald and Gao, 2019 ), or when problems or new possibilities arise ( Berends et al, 2021 ; Kirtley and O’Mahony, 2020 ), suggesting a need for fundamental alterations in strategy, goals, technological applications, market focus, or identity ( Berends et al, 2021 ; Camuffo et al, 2020 ; Contigiani and Levinthal, 2019 ; Hampel et al, 2020 ; McDonald and Gao, 2019 ) to preserve competitive advantage ( Snihur and Clarysse, 2022 ). Because of their nature, pivots ensure the flexibility that is fundamental to cope with environmental uncertainty characterizing nascent markets and new ventures ( Flechas Chaparro and de Vasconcelos Gomes, 2021 ; Zuzul and Tripsas, 2020 ).…”

“…On the other hand, other scholars have argued that pivoting firms engage in paradoxical behavior ( Gans et al, 2019 ) as pivoting requires them to irreversibly commit significant resources to the new strategic orientation ( Pillai et al, 2020 ), missing out on the experimental nature of the pivot itself. Several authors have also underlined the identity shifts that may arise from the strategic reorientation entailed by pivots, potentially disrupting relations with external stakeholders, such as customers ( Hampel et al, 2020 ; McDonald and Gao, 2019 ), investors and the media ( McDonald and Gao, 2019 ), the firm’s own employees ( Snihur and Clarysse, 2022 ), as well as the entrepreneur’s own identification with their entrepreneurial ideas ( Crilly, 2018 ; Grimes, 2018 ).…”

Internationalization Issues in Chinese Firms: One Belt, One Road-Based Perspective

“…Whereas the majority of this study has focused on existing organizations, altering the organizational identity of new ventures is as difficult and can take longer than the age of the venture at the time the transition occurs ( Tripsas, 2009 ; Snihur and Clarysse, 2022 ). Such results emphasize intriguing questions about the impact of organizational identity all through internationalization, as well as the interaction between organizational members’ cognition and the ongoing change implied by pivoting in nascent markets, which is frequently depicted by academics and practitioners as seemingly smooth transitions ( Blank, 2013 ; Marx and Hsu, 2015 ).…”