Resources and capabilities in high-tech enterpreneurship : a study of two generations of Chinese startups

By examining the origin and growth dynamics of two generations of high-tech startups in China's information technology sectors, this study presents empirical research on how Chinese technology startup companies, despite their lack of many of the basic elements that are usually necessary for a successful enterprise, survived and thrived in a competitive environment. The first-generation firms appeared in the mid- and late 1980s, competing in computer-related areas such as Chinese-language processing software and hardware products, personal computers, and financial software products. The second-generation startups, namely Internet-related companies, emerged in the mid-1990s. The thesis presents case studies, which form the primary evidence for analysis, on major domestic players Legend, Founder, Great Wall, Sohu, Sina, and Netease. A framework was built based on a theoretical distinction between external resources and organizational capabilities. Case studies show that external resources are important, but richer resources do not always guarantee a startup's success if they fail to help build organizational capabilities. External resources might even become a hurdle in sustaining a competitive edge. The case studies indicate that organizational capabilities that were built during a startup's development, rather than just richer or "better" external resources alone, make significant contributions to success. Another observation is that in many cases resource constraints trigger startups to search for needed capabilities. Together with external resources and strategic alliances, trial-and-error learning is an effective vehicle to carry out capability-building processes. The unintentional nature of capability building is also discussed.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2002

Author dc:creator

• Xu, Lin, 1964 May 1-

Advisor dc:contributor.advisor

• Michael A. Cusumano.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/8433

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/8433