Navigating Environmental Threats to New Ventures: A Regulatory Fit Approach to Bricolage

Authors: 

R. Samuel Adomako, University of Birmingham
Dan K, Hsu, North Dakota State University
Baris Istiplile, University of Mannheim
Johan Wiklund, Whitman School of Management, Syracuse University
Fei Zhu, Institute of Automation of Chinese Academy of Sciences

Journal:

Journal of Management Studies

Summary:

Promotion (prevention) focus disposition is positively (negatively) related to bricolage, and both dispositions weaken the effect of environmental threat on bricolage.

Research Question:

Why do some entrepreneurs bricolage when facing environmental threats while others do not?



What We Know:

The majority of existing research examines new venture bricolage as a response to resource-constrained environments caused by various factors. This literature thus suggests an implicit assumption that resource-constrained or threatening environments drive bricolage. However, it overlooks cases in which entrepreneurs in similarly threatening environments choose not to bricolage, as evident in Baker and Nelson’s (2005) study.

Novel Findings:

The inconsistent findings in the existing literature suggest the necessity to examine the conditions under which threatening environments, or environmental threats, more or less drive bricolage. This research reconciles the inconsistency by identifying entrepreneurs’ regulatory focus as a boundary condition for the relationship between environmental threat and bricolage. More importantly, we show that entrepreneurs’ regulatory foci can override environmental influences.



Implications for Practice:

Entrepreneurs are encouraged to learn about their own dispositional regulatory focus and be aware of how such disposition interacts with environmental threat to influence bricolage. Specifically, low-threat environments can be favorable conditions for promotion-focused entrepreneurs, especially for female entrepreneurs, to bricolage, and thus should be made good use of. Entrepreneurs should also be made aware that, when facing high environmental threats, their co-entrepreneur who is reluctant to bricolage may have a strong prevention focus disposition due to the potential risks associated with bricolage. Therefore, if they decide to bricolage in such environments, they may avoid involving the prevention-focused co-entrepreneur but assign them to tasks that fit their prevention focus and yield positive outcomes (e.g., business idea screening and careful preparation before approaching resource providers).

Implications for Policy:

Governments can design support programs for entrepreneurs to learn about bricolage as a strategic approach to generate resources and innovations, how it may be influenced by an entrepreneur’s regulatory foci, and low-threat environments as enabling conditions for promotion-focused entrepreneurs to bricolage. Such programs may benefit not only promotion-focused entrepreneurs by enhancing their bricolage abilities but also prevention-focused entrepreneurs, if they are willing to partner with promotion-focused co-entrepreneurs to take advantage of some enabling conditions and reap the benefits of bricolage.



Full Citation:

Adomako, S., Zhu, F., Hsu, D.K., Istipliler, B., Wiklund, J, (2024). Navigating environmental threats to new ventures: A regulatory fit approach to bricolage. Journal of Management Studies.

Abstract:

Bricolage is a critical strategy used by entrepreneurs to generate resources for new ventures in response to environmental threat in which resources are constrained. However, inconsistent findings exist. Whereas the predominant view in the bricolage literature suggests that environmental threat motivates new ventures to bricolage to survive and thrive, some empirical evidence shows that some firms choose not to bricolage in such environments. This paper addresses the inconsistent findings by integrating regulatory fit theory with the bricolage literature, arguing that the effect of environmental threat on bricolage depends on entrepreneurs’ dispositional regulatory focus. Data from a time-lagged survey of 396 Taiwanese entrepreneurs support our hypotheses. Our findings suggest that promotion (prevention) focus disposition is positively (negatively) related to bricolage. More importantly, both promotion and prevention foci weaken the effect of environmental threat on bricolage, serving as boundary conditions for this relationship. Finally, our additional analysis reveals gender differences in bricolage and the contingent effect of promotion focus disposition, enabling us to contribute to regulatory fit theory.