Networking and Resource Strategies in New Ventures: A Study of Information Technology Start-ups

Abstract

While the network theory and the resource based view of the firm have gained great importance in management research in the recent years, researchers have shown limited interest in studying the dynamics of new venture resource strategy to explain how entrepreneurs continuously augment, manage, and develop resources to match the shifting product-market strategy and use networks in doing so on a sustainable basis. This paper, based on an analysis of two Information Technology (IT) start-ups, attempts to marry the insights from two popular theoretical lenses by exploring the innovative and dynamic resource and networking strategies such firms follow. An attempt has been made to conceptualise and explain how these firms maintain flexibility in resources by using network mode of organisation, so that they can avoid strategic rigidity and craft strategies that are suited to the high velocity environment. Several propositions have been developed and practical implications have been drawn in this regard.