This study examines differences between independent ventures (IVs), which are established by individual entrepreneurs, and corporate ventures (CVs), which are controlled by larger companies. It focuses on differences between these ventures related to the resources, strategies, and performance of firms in the computer and communications equipment manufacturing industries. Thus, the findings increase the understanding of the different challenges faced by each venture type and provide insight into how each venture type should be managed. The study finds that managers of CVs and IVs emphasized different resources and strategies. Specifically, CVs emphasized the following resources: internal capital sources, proprietary knowledge, and marketing expertise. IVs emphasized external capital sources, technical expertise, and development of brand identification. They also differed in their strategies; IVs pursued greater strategic breadth, more customer service, and focused more on specialty products. The findings that CVs had less strategic breadth was surprising in that CVs emphasized resources, such as internal capital sources, which could make pursuing broad strategies more feasible for CVs. It is possible that some CVs do not pursue broad strategies because they may be “infringing upon someone else's turf” within the corporation and thus may be discouraged. In spite of finding significant strategy and resource differences, the study found that IVs and CVs did not differ in performance and that resources were not directly related to performance. Based on the concept of equifinality, it follows that both venture types can be equally successful, even if they follow different roads to success. Success may be less a function of the different resources IVs and CVs have and more a function of what strategies the firms choose based upon their resources. Strategy variables did relate to performance: a low cost strategy lowered performance regardless of venture type and the influence of an aggressive strategy (i.e., wide strategic breadth) on performance depended upon venture origin. Managers pursuing a low cost strategy may have had lower performance if they became penny wise and pound foolish, missing opportunities in their efforts to lower costs. This suggests that regardless of venture type, managers of new ventures in these industries and perhaps in other volatile industries may need to be opportunistic. This study indicates that pursuing broad strategies increased the performance of IVs and decreased the performance of CVs. This finding was surprising in that CVs had greater resources, which one might think would lead to successful implementation of aggressive strategies. In securing enough resources to pursue aggressive strategies from their parents, CVs may lose the freedom of action they need to cope with the dynamism of high technology industries. This suggests that managers of CVs within the computer and communications equipment manufacturing industries should either not pursue broad strategies, or if pursuing broad strategy, they should maintain their flexibility. In contrast, IVs that pursued broad strategies achieved higher performance, indicating that perhaps IVs, unencumbered by the bureaucracy that characterizes CVs, may be able to pursue aggressive strategies while simultaneously maintaining flexibility. Thus, this study offers IV and CV managers several valuable insights. First, it argues that managers of each type of venture may need to pursue different strategies to increase venture performance and make optimal use of their unique resources. Furthermore, it suggests that CV managers encounter difficulties in applying resources to strategies and not in accessing resources. Whereas political obstacles may occur, CV managers may primarily encounter these difficulties when trying to implement strategies rather than when accumulating resources from the parent, suggesting a pitfall that managers of CVs and their parents need to avoid. Although this study has indicated that both venture types can be equally successful, it suggests that they may face different obstacles and follow different roads to success.

The recession of 1990–1991 adversely affected nearly every industry in the United States, and entrepreneurial manufacturing firms were among those hardest hit by the recession. The failure rate among this group by mid-year 1991 had risen 37% from the previous year. Thus, recessions pose a serious threat to the survival of entrepreneurial firms. Understanding how the business cycle influences performance and what strategies are effective in such turbulent times has practical value for managers of entrepreneurial firms. In this paper we report a large-scale empirical research study involving subjective and financial information from 118 publicly traded U.S. manufacturing firms. The participating firms are involved in technologically demanding and highly innovative industry segments: Industrial and Computer Equipment; Electrical Equipment and Components; and Measuring, Analysis, and Control Instruments. None of the firms has achieved a market share of more than one half of one percent ( extless 0.5%). The goal of the study was to determine the components of a marketing strategy that enabled a firm in these industries to withstand the negative financial consequences of a recession. We find that, in these industries, a company's marketing strategies preceding a recession strongly impact the extent of economic downturn on the firm, and influence its odds of a timely and complete recovery. Our specific prescriptions follow: First, maintain marketing activities in the core business as assurance against recession. Increasing sales and advertising, increasing breadth of production, and increasing geographic coverage improve performance during both the peak and the contraction of the business cycle. Second, during the peak period, cautiously expand with an emphasis on marketing efficiency. Increasing the number of channels of distribution and cutting price have a negative effect unless accompanied by sales-force performance measurement. A simple emphasis on incentives and efficiency alone hurts a firm as a recession hits. All of these prescriptions run counter to existing views that suggest that recession simply requires cutbacks and retrenchment. Recessions seem to be different from other threats to firm viability, and marketing activities appear to help pull the firm through a macroeconomic downturn.