IMPACT OF KNOWLEDGE ACQUISITION ON NEW VENTURE

PERFORMANCE: EXAMINING THE MEDIATING EFFECT OF

ENTREPRENEURIAL ALERTNESS
 TABLE OF CONTENTS
INTRODUCTION
RESEARCH GAP
PROBLEM STATEMENT
RESEARCH QUESTION
CONTRIBUTION OF STUDY
RESEARCH OBJECTIVE
RESEARCH FRAMEWORK
RESEARCH HYPOTHESIS
RESEARCH METHODOLOGY
 INTRODUCTION
Entrepreneurship is the backbone of the economy and plays an important role in the development
of national economy (de vita, mari, & poggesi, 2014; welsh, memili, & kaciak, 2016).
More than 500 million people worldwide are involved and trying to start a new business
(zacharakis, 2010).
New venture creates a very large proportion of the innovative products and services
New venture generate new jobs and reduce unemployment rate (kirchhoff & phillips, 1988)
Pakistan has a factor driven economy which strongly depends on basic requirement such as
primary education, healthcare, infrastructure and so forth. New venture rate in Pakistan is 3.42%,
which is lower than many other countries(gem pakistan 2013)
Identifying and selecting right opportunities for new businesses are among the most important
abilities of a successful entrepreneur (Gumpert & Stevenson, 1985).
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Entrepreneurial opportunities are those situations that entrepreneurs meet a market need through a
creative combination of resources in the form of new goods, services, raw materials, and
organizing methods (casson, 1982; kirzner israel, 1973; schumpeter, 1934).
Entrepreneurial alertness is closely related to new venture performance (Thornhill, 2006).
Scholars have emphasized that knowledge plays a pivotal role in perceived opportunities by rise
alertness (Shane, 2000; Tang, Kacmar, & Busenitz, 2012)
Siegel and Renko (2012) found that market and technical knowledge help new ventures identify
new opportunities.
Previous studies demonstrate that knowledge of the market and technological knowledge increase
the firms potential to discover new opportunities and to exploit them effectively (Shane, 2000;
Wiklund & Shepherd, 2003)
 RESEARCH GAP
Previous studies have stressed the way in which social network play a crucial role in promoting
the growth of new venture. Little research has paid attention to the influence of knowledge
acquisition and entrepreneurial alertness on new venture performance.
Rong Ma and (Yen-Chih Huang) suggest that they examine the determinates of alertness rather
than its consequences
Short, Ketchen, Combs, and Ireland (2010) Also, highlight that outcomes or consequences of
alertness are relatively limited when compared to that which focused on antecedents alertness
Current study follow this direction to identify the consequences of entrepreneurial alertness.
Therefore, in order to fill this, gap this thesis will empirically examine the relationship between
knowledge acquisition and new venture performance with a mediating role of entrepreneurial
alertness
 PROBLEM STATEMENT
Although opportunity identification (or recognition) has recently received considerable attention
in entrepreneurship research, many important questions and unresolved issues remain (cox, 2016)
In Pakistan 31.34% of the total working age population express that they would not start new
business due to fear of failure.
About 24% of Pakistani people were involved in opportunity based early stage entrepreneurial
activity.
Opportunity based TEA rate (Total Early Stage Entrepreneurial Activity) for Pakistan is lower
than average based opportunity TEA rate of factor driven economy 43% (M. Shahid Qureshi,
2012).
 RESEARCH QUESTION
THIS STUDY AIMS TO ADDRESS SPECIFICALLY THE FOLLOWING RESEARCH QUESTIONS.
Does technical knowledge acquisition have a significant impact on entrepreneurial alertness?
Does Market Knowledge acquisition have a positively related to the entrepreneurial alertness?
Does Technical knowledge has a significant impact on new venture performance?
Does Knowledge Acquisition has a significantly impact on new venture performance?
Does entrepreneurs alertness significantly impact on new venture performance?
Does Entrepreneurial Alertness mediate the relationship between technical knowledge acquisition
and new venture performance?
Does Entrepreneurial Alertness mediate the relationship between market knowledge acquisition
and new venture performance?
 CONTRIBUTION OF STUDY
The finding of this study will be beneficial for new venture owner to identify new opportunities
and enhance their venture performance
Its will be also important for new venture to acquire market knowledge and technical knowledge
from their peers to exploit new opportunities.
THEORETICAL SUPPORT
Organizational knowledge is an important bundle of intangible resources that can be the source of
a sustainable competitive advantage (hitt, ireland, and hoskisson, 1999).
Knowledge permits the firm to predict more accurately the nature and commercial potential of
changes in the environment and the appropriateness of strategic and tactical actions (cohen and
levinthal, 1990).
Procedural knowledge refers to knowing the procedures for how to do things and arises from
experience with similar situations (Lesgold, 1988).
Two strands of procedural knowledge have been emphasized as specifically important for
creating competitive advantage and for discovering and exploiting new opportunities: knowledge
of markets and technology (Thorpe, Holt, Macpherson, & Pittaway, 2005; Wiklund & Shepherd,
2003).
Procedural knowledge fulfils the resource-based views criteria of being valuable, rare and
difficult to imitate as characteristics of resources that can lead to competitive advantage creation
(Barney, 1991)
CONCEPTUAL FRAMEWORK
 HYPOTHESIS
H1 technical knowledge acquisition has a significant impact on entrepreneurial alertness.
H2 market knowledge acquisition has a significant impact on entrepreneurial alertness.
H3 technical knowledge has a significant impact on new venture performance
H4 knowledge acquisition has a significant impact on new venture performance.
H5 entrepreneurs alertness has a significant impact on new venture performance.
H6 entrepreneurial alertness mediates the relationship between technical knowledge acquisition
and new venture performance.
H7 entrepreneurial alertness mediates the relationship between market knowledge acquisition and
new venture performance.
 RESEARCH METHODOLOGY
SAMPLING
In this study, all respondents will be founders or founding team members of new ventures.
Data will be collected from 500 new venture owners who carry out business in manufacturing
industry.
We carried out strict training to those who participating in this survey, to ensure them had a clear
understanding and purpose of this study before the investigation took place.
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Data collection
Considering the quantitative nature of the research and the required data, the questionnaire
instrument will be used for data collection
The standard questionnaire will be adopted from previous research.
This questionnaire is divided into four parts with 16 items, in total. It will be used the format of a
typical five-level Likert scale (i.e. strongly agree to strongly disagree).
For one item, it will be uses five Likert scale (i.e. very poor to very good).
First part in questionnaire will be cover the demographic information
the second one will be deal the items related to knowledge acquisition
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Third one will be entrepreneurial alertness, and the final one will be deal with new venture
performance.
The questionnaire will be distributed personally or through social media i.e. venture Facebook
page, LinkedIn, emails etc.
MEASURES
Knowledge acquisition
Knowledge acquisition will be divide into two parts; market and technical knowledge acquisition
(ylirenko, autio, & sapienza, 2001).
Knowledge which acquire from key partners, suppliers etc. all items will be assessed with five
point Likert scale 1= strongly disagree to 5= strongly agree.
ENTREPRENEURIAL ALERTNESS
In accordance with Tang et al. (2012), entrepreneurial alertness measured using five indicators
new information identification, identification new business ideas, consolidation of fragmented
information, identification of possible opportunities and good choice between multiple
opportunities.
All items will be assessed with five point Likert scale 1= strongly disagree to 5= strongly agree.
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NEW VENTURE PERFORMANCE
New venture performance can be measured through four indicators; sale growth, market share, net
profit after tax and customer consistency (H. Ma & tan, 2006; zhan & chen, 2013)
In this survey responded will be asked to assess their performance over the past three years.
All indicators will be assessed with five point Likert scale, from 1= very poor to 5=very good
 CONTRIBUTION OF STUDY
The finding of this study will be beneficial for new venture owner to identify new opportunities
and enhance their venture performance
Its will be also important for new venture to acquire market knowledge and technical knowledge
from their peers to exploit new opportunities.