Journal of Business Research 124 (2021) 272–285

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Journal of Business Research

journal homepage: www.elsevier.com/locate/jbusres

One size does not fit all: Strategy configurations, complex environments,
and new venture performance in emerging economies
Yunzhou Du a, *, Phillip H. Kim b
a
School of Economics & Management, Southeast University, No. 2 Southeast University Road, Nanjing, Jiangsu Province 211189, China
b
Babson College, Blank Center for Entrepreneurship, 231 Forest Street, Babson Park, MA 02457, USA

A R T I C L E I N F O A B S T R A C T

Keywords: New ventures face a variety of competitive and external challenges as they seek high performance. This requires
Strategy configurations an assortment of market and non-market growth strategies best aligned with the complex environments they
fsQCA face. However, rather than holistically evaluating these multiple drivers of high performance, past research has
Market orientation
primarily focused on a narrow subset of strategies and environmental conditions. We attribute this to a mismatch
Entrepreneurial orientation
Political networking
between studying causally complex relationships with conventional symmetric regression methods. Instead, we
New venture performance advocate for an asymmetric configurational perspective that tests the causal complexity of high and not-high
venture performance. We employ fuzzy-set qualitative comparative analysis (QCA) to detect different strategy
configurations of entrepreneurial orientation, market orientation, and political networking amid complex en­
vironments of hostility, dysfunctional competition, and lack of institutional support for nearly 200 Chinese new
ventures. Instead of a one-size-fits-all approach with an “either/or” trade-off, our main findings reveal six
pathways with different configurations for high performance: either entrepreneurial or market orientation – or
both – are necessary for high performance, and there are no consistent pathways for unsuccessful ventures. This
offers a more complete picture of how new ventures operate and explains why individually conflicting results can
be true collectively. We also demonstrate how configurational theory and methods can be employed to analyze
the complexities of entrepreneurship.

1. Introduction “proactive identification and exploitation of opportunities for acquiring

Running a successful new venture is a challenging effort, regardless
of where it operates. Among their many priorities, these ventures must
find ways to meet their current and anticipate future customer’s needs,
respond to competitive pressures, and secure resources to run their
businesses effectively. These issues are magnified in emerging econo­
mies, where weak institutions and uneven government support across
regions or sectors complicate how new ventures operate (Li & Atuahene-
Gima, 2001). Given their complex environments, new ventures also
wrestle with conflicting demands for their limited time and resources.
Each set of environmental conditions calls for its own appropriate
strategies. Collectively, these strategies form a multi-faceted game plan
that new ventures can employ to confront interdependent threats to high
performance (Roig-Tierno, Huarng, & Ribeiro-Soriano, 2016; Wang &
Liu, 2020).
One approach to overcome these challenges is to employ entrepre­
neurial marketing (EM). By undertaking EM strategies – defined as
and retaining profitable customers through innovative approaches to
risk management, resource leveraging, and value creation” – new ven­
tures can better position themselves to achieve high performance
(Morris, Schindehutte, & LaForge, 2002, p. 5). When employed effec­
tively, entrepreneurial marketing enables new ventures to bring
together the right strategies that address their complex and multilayered
challenges. This expectation is driven by EM’s benefits from weaving
together both exploration and exploitation efforts to simultaneously
create opportunities and deliver value to customers. Both efforts are
vital to fend off competitors that impede performance. New ventures
may enact these strategies in different combinations and construct a
many-sided approach to overcome the complex challenges they face
(Gresov & Drazin, 1997). Entrepreneurial marketing affirms that no
single strategy can guarantee high performance on its own, but success is
more likely with multi-faceted strategy configurations best tailored to
their operating conditions.
Based on these operating realities, we should also expect that

* Corresponding author.
E-mail addresses: yunzhou@seu.edu.cn (Y. Du), pkim1@babson.edu (P.H. Kim).

https://doi.org/10.1016/j.jbusres.2020.11.059
Received 8 August 2020; Received in revised form 25 November 2020; Accepted 26 November 2020
Available online 11 December 2020
0148-2963/© 2020 Elsevier Inc. All rights reserved.
Y. Du and P.H. Kim
empirical research on the entrepreneurial marketing and new venture
performance (NVP) relationship should closely match the inherent
causal complexity involving multiple strategies to address different
environmental conditions (Morrish, Eggers, Pattinson, & Hills, 2020;
Hansen, Deacon, Pascal, & Sethna, 2020). We expose this theoretical
and empirical gap by comparing the expectations that entrepreneurial
marketing offers to new ventures to effectively manage their complex
operating challenges and the actual evidence to support these claims.
What is puzzling is if new ventures use multiple strategies to confront
multiple challenges, we should have more systematic configurational
theorizing and evidence to demonstrate how this works (Douglas &
Prentice, 2019; Furnari et al., 2020; Kraus, Ribeiro-Soriano, & Schüssler,
2018). Instead, EM-NVP research has focused more narrowly on
particular individual or dual strategies occurring amid only one envi­
ronmental condition (e.g., Covin & Slevin, 1989; Bradley, Shepherd, &
Wiklund, 2011). Although this focus may be empirically convenient and
the results for individual studies may be plausible, this narrow emphasis
has produced inconsistent empirical results. Even comparing these
studies to each other is a challenge, since they do not employ any
configurational theorizing or analyses that align with a causally complex
relationship (Morris et al., 2002; Morgan & Anokhin, 2020). Moreover,
this limited scope also overlooks vital combinations with other non-
market strategies needed for high performance, understates the true
causal complexity of what drives high performance, and inaccurately
implies an “either/or” choice of a unique ideal strategy. We attribute
these shortcomings to a mismatch between studying causally complex
relationships using conventional symmetric regression methods, which
can only analyze meaningful interactions for a maximum of three vari­
ables (Fainshmidt, Witt, Aguilera, & Verbeke, 2020; Woodside, 2013).
Since these analyses are only designed to handle single or paired ex­
planations, these techniques cannot adequately reveal entrepreneurial
marketing’s complex effectiveness, or which combinations of strategies
best correspond to certain conditions and lead to high performance
(Douglas, Shepherd, & Prentice, 2020). Consequently, an overreliance
on these techniques has painted an incomplete picture of how new
ventures actually navigate complex environments on the path to high
performance.
In our study, we address the following research question: how can
new ventures employ different strategy configurations to achieve high
performance (or avoid poor performance) amid complex operating
conditions? To address these issues, we apply asymmetric configurational
theorizing and methods to investigate exploration–exploitation-based
strategy configurations using the context of China, the largest emerging
economy in the world. We use this empirical context because of the
additional complexities produced by its weak institutional environment
(Aldrich, Ruef, & Lippmann, 2020; Marquis & Raynard, 2015; Zhang,
Wang, & Wei, 2019). Under such circumstances, we expect that new
ventures require an assortment of different strategy configurations –
each matched to certain operating conditions – to achieve high perfor­
mance (e.g., An, Rüling, Zheng, & Zhang, 2020; Sun, Garrett, Phau, &
Zheng, 2020; Woodside, 2013). Specifically, we examined three strate­
gies – entrepreneurial orientation (EO), market orientation (MO), and
political networking (PN) – and three operating conditions – environ­
mental hostility (EH), dysfunctional competition (DC), and lack of
institutional support (LIS). We focused on these strategies and operating
conditions because they represent common ways researchers have
analyzed entrepreneurial marketing, non-market strategy, and new
venture performance amid the challenges faced in emerging economies
(Marquis & Raynard, 2015; Du, Kim, & Aldrich, 2016; Li &
Atuahene-Gima, 2001; Morgan & Anokhin, 2020). We analyzed these six
drivers with a sample of nearly two hundred Chinese new ventures in
three municipalities and five provinces, representing a range of different
operating conditions using fuzzy-set qualitative comparative analysis
(fsQCA) and Necessary Condition Analysis (NCA). Our analyses revealed
that no strategies are individually necessary, but when combined with
each other, we identified six distinct configurations for high new venture
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Journal of Business Research 124 (2021) 272–285
performance. Our results present a composite set of strategy configu­
rations that mirror more closely to the ways new ventures operate in
complex conditions than what past research has reported.
Our study offers several contributions. First, we determine the
environmental conditions for which entrepreneurial marketing or other
strategy configurations can lead to high performance – a scenario known
as equifinality – and move beyond solely individual or dual strategy
explanations of new venture performance that emphasize an ideal
“either/or” strategy (e.g., Covin & Slevin, 1989; Morgan & Anokhin,
2020). Second, we extend insights from previous EM-new venture per­
formance (NVP) studies by invoking causal asymmetry (Ragin, 2008),
which reveals additional asymmetric pathways between high and not-
high performance obscured in past research (De Crescenzo, Ribeiro-
Soriano, & Covin, 2020; Douglas et al., 2020). Third, we demonstrate
the value of a “both/and” configurational theorizing that is better-suited
to assess the multi-faceted pathways of new venture performance in
complex environments (Furnari et al., 2020). Instead of a one-size-fits-
all approach, we back a more comprehensive set of options with
entrepreneurial marketing: that new ventures have multiple combina­
tions integrating exploration, exploitation, and non-market strategies
matched to particular operating conditions to achieve high
performance.
2. Exploration, exploitation, and non-market strategies in
complex operating environments
To understand what strategy configurations lead some new ventures
to perform better than others, we need a unifying framework that in­
corporates multiple strategies and environmental conditions. For this,
we draw on March (1991) exploration–exploitation framework
embedded within the entrepreneurial marketing concept. Since entre­
preneurial marketing is a broad concept, we dig deeper into each of its
component dimensions, which has its own established literature. We
focus on entrepreneurial orientation (EO) as an exploration strategy that
emphasizes the pursuit of new opportunities, and marketing orientation
(MO) as a responsive strategy that exploits competitive advantages for
addressing current and anticipated customer needs (Morgan & Anokhin,
2020; Wang & Liu, 2020). We also include political networking (PN) as
another exploitation strategy that is commonly employed as a non-
market strategy in emerging economies for securing resources and
legitimacy (Marquis & Raynard, 2015). Consistent with past research,
we refer to these three orientations as growth strategies (Wales, Monsen,
& McKelvie, 2011). Although tradeoffs in time and resources exist for
new ventures – such as how much to emphasize exploration versus
exploitation strategies (“either/or”) concurrently – this framework also
highlights the potential value for achieving high performance when both
are pursued jointly (referred to as ambidexterity).
To better appreciate the difference between symmetric contingency
and asymmetric configurational approaches, we highlight the following
summary of past research on entrepreneurial (EO) and market orienta­
tion (MO) and political networking (PN). When multiple strategies or
environmental conditions are examined, studies typically evaluate dual
strategies, such as the interaction between EO and MO (e.g., Morgan &
Anokhin, 2020), or between MO and PN, contingent on a single envi­
ronmental condition being strong or weak (Du et al., 2016). This body of
research depends on a symmetric contingency approach, which focuses
on the net effects of the key independent variables using regression
methods that can analyze meaningful interactions for no more than
three variables. This may explain why most previous studies limit their
analysis to single or paired explanations between EO, MO, or PN stra­
tegies, and are contingent on only a single environmental condition.
Even studies about EO and MO based in emerging economies such as
China have only focused on single or paired strategy explanations,
simplifying the much more complex conditions that exist in these re­
gions (Du et al., 2016; Tang, Zhi, Marino, Zhang, & Li, 2008; Cai, Chen,
Chen, & Bruton, 2017).
Y. Du and P.H. Kim
By contrast, we lack empirical studies about configurational expla­
nations that match the causal complexity between EO, MO, PN, and new
venture performance (Wiklund & Shepherd, 2005). While new ventures
benefit from entrepreneurial marketing and its component activities, we
lack systematic evidence demonstrating the multiple configurations for
employing these strategies and the alternative pathways for high per­
formance. This leads us to conclude that the appropriate methods are not
matched to these study contexts. Rather than holistically evaluating
these multiple drivers of high performance, past research has primarily
focused on certain market strategies and conditions. While the indi­
vidual study findings may be accurate, this narrow emphasis leads to
inconsistent results when studies are compared. The mismatch also
overlooks combinations of market and non-market strategies, un­
derstates the true causal complexity of what explains high performance,
and inaccurately implies the existence of an “ideal” strategy.
Most research on new venture growth strategies has generally
concluded any single strategy is “necessary but not sufficient” for high
performance, contingent on the operating conditions of their environ­
ments (e.g., Covin & Wales, 2019; Hult & Ketchen, 2001; Stam & Elfring,
2008; Peng, 2003). If the “necessary but not sufficient” arguments implied
in past research are indeed empirically valid, then we should expect that
high performance can occur only if enough emphasis on a particular
strategy is in place to overcome the bottleneck constraints to achieving
the outcome (Dul, 2016). These bottleneck constraints (or minimum
threshold values) cannot be determined using conventional regression
methods. Instead, it requires an asymmetric configurational approach,
where we can examine the necessity and sufficiency of different strate­
gies in combination and dependent on multiple environmental condi­
tions. This is especially needed for the complex environments in
emerging economies where new ventures likely employ multiple
strategies.
In the following sections, we review the research on each of the three
growth strategies – both individually and as dual strategies (using two-
way interactions) – and the performance outcomes that ensue when this
relationship is moderated by environmental conditions. We outline what
we know already about their necessity from only a symmetric contin­
gency approach. We use this review to establish the basis for why our
investigation based on an asymmetric configurational approach is
needed.
2.1. Entrepreneurial orientation
Entrepreneurial orientation is a set of strategic processes and decision-
making practices that lead a new venture to make bold decisions to
explore new opportunity spaces (Covin & Lumpkin, 2011). Specifically,
EO consists of three dimensions: proactiveness, innovativeness, and risk
taking (Covin & Slevin, 1989). New ventures with high entrepreneurial
orientation favor exploring new and future growth opportunities. They
produce first-mover advantages by introducing innovative goods or
services, and execute these strategies even when the outcomes are un­
clear (Lumpkin & Dess, 1996; Wiklund & Shepherd, 2011). Up to now,
studies have shown inconsistent patterns regarding the EO-performance
relationship. In a meta-analysis of over 50 studies, Rauch, Wiklund,
Lumpkin, and Frese (2009) reported a moderate positive correlation.
However, other studies reveal plausible counterarguments about this
relationship. High EO also results in greater performance variance and
failure risk, so there is no guarantee that a high exploratory focus will
ensure positive returns (Wiklund & Shepherd, 2011). More generally,
past research has reported that EO is necessary but insufficient for high
performance (Stam & Elfring, 2008). This implies that high-performing
ventures depend on multiple strategies to navigate their complex
external environments, such as market exploitation employed concur­
rently with EO’s exploratory focus. EO impacts performance in multiple
ways, and this main relationship is contingent on other non-market
factors, such as political networking in emerging economies.
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2.2. Market orientation
Market orientation enables new ventures to create sustainable
competitive advantages by offering superior value for customers. This
occurs through a combination of competitor orientation, customer
orientation, inter-functional coordination, and responsiveness (Narver
& Slater, 1990; Raju, Lonial, & Crum, 2011). With MO, new ventures
respond to competitors, stay attuned to their customers’ needs, integrate
internal and external resources to create superior value for customers (e.
g., Jaworski & Kohli, 1993), and exploit opportunities for growth (Li,
Zhao, Tan, & Liu, 2008). Like EO, most MO research also implies that
MO is necessary but not sufficient for generating high performance (Hult
& Ketchen, 2001). However, MO-performance empirical findings are
inconsistent – ranging from positive (e.g., Morgan, Vorhies, & Mason,
2009) to negative effects (Kirca, Jayachandran, & Bearden, 2005).
2.3. Entrepreneurial marketing as a dual EO-MO strategy
One of the benefits of entrepreneurial marketing is that it affirms the
synergies when adopting both entrepreneurial and market orientations
as a joint approach to achieve high performance. Despite its appeal,
research about entrepreneurial marketing’s impact on performance has
also revealed inclusive results. On the one hand, new ventures operating
with a dual entrepreneurial and marketing orientation (EO-MO) strategy
achieve high performance by proactively launching innovative products
and services ahead of their competition, while continuing to exploit
ongoing opportunities. This is especially appropriate when competition
is fierce and long-term prospects depend on finding new growth pros­
pects (Covin & Slevin, 1989; Alqahtani & Uslay, 2020). On the other
hand, it is also possible that hostile conditions can weaken the EM-
performance relationship because new ventures may simply not have
enough time or resources to both fend off current competition and claim
new opportunities (Bradley et al., 2011; Morgan & Anokhin, 2020;
Wang & Liu, 2020). These conflicting drivers may lead new ventures
down different pathways for high performance, especially when the
contingent effects of the operating environments are considered. For
example, in a study based in China, firms with high EO were more likely
to pursue marketing strategies (i.e., EO-MO) rather than multiple
entrepreneurial strategies to achieve high performance amid intense
competitive hostility (Tang & Hull, 2012). Other research on Chinese
new ventures reveals that EO benefits depend on institutional quality
and active involvement in guanxi networks (Tang et al., 2008). These
inconclusive findings further reinforce the possibility that combining
exploration strategies like EO with other exploitation strategies provides
multiple pathways to achieve high performance.
We argue that a configurational perspective can clarify some of these
inconsistencies. We highlight two scenarios that provide conflicting re­
sults and imply that strategy configurations have not been adequately
dealt with in prior studies. First, MO’s effects may be enhanced or
weakened when combined with other growth strategies, such as a EO
or/and PN strategy (Morrish, Miles, & Deacon, 2010; Wang & Liu, 2020;
Li et al., 2008; Morgan & Anokhin, 2020; Du et al., 2016). Second, the
effectiveness of exploration–exploitation strategies on performance may
not be fully understood without a full consideration of the complex
environmental conditions at play. When operating in strong institutional
environments, new ventures can pursue individual and dual EO-MO
strategies more confidently because of formal legal infrastructures,
reliable regulatory protections, and generally transparent political pro­
cesses. However, when new ventures operate in weak institutional en­
vironments, these same assurances are often in doubt (Kim & Li, 2014).
2.4. Political networking
Political networking represents one non-market strategy entrepre­
neurs undertake to develop personal ties with government officials,
state-controlled financial bodies, and other regulatory organizations in
Y. Du and P.H. Kim
order to gain favors for their own ventures (Li & Zhang, 2007). PN has
also been argued as necessary but insufficient for new venture perfor­
mance (Peng, 2003). In weak institutions, new ventures use PN as a non-
market strategy to enhance sociopolitical legitimacy (Aldrich et al.,
2020), gain resources from the government (Peng, 2003), or protect
themselves from unfair regulations (Peng, 2003; Xin & Pearce, 1996). As
entrepreneurs cultivate ties with officials, they help new ventures to
build baohusan (literally: a form of protection). However, extensive
political ties can create situations where government officials interfere
with business operations, preventing new ventures from exploring new
opportunities with autonomy (Okhmatovskiy, 2010; Marquis & Ray­
nard, 2015).
Given the higher likelihood for government appropriation and other
unpredictable policies, the effectiveness of a dual EO-MO strategy may
be hindered by the lack of institutional support or political ties. Without
integrating non-market strategies and different environments into a
unified framework, we omit reasons why a dual EO-MO might not al­
ways lead to better performance. In weak institutional environments, we
argue that new ventures seeking high performance must expand their
entrepreneurial marketing configurations to include PN. Therefore, we
assess PN alongside other strategies within the exploration–exploitation
framework to better understand the pathways new ventures can take to
operate in complex conditions.
These two-sided effects of PN are also related to an ongoing debate
about whether market (MO) and non-market (PN) strategies are com­
plements to or substitutes for each other in emerging economies. On the
one hand, some scholars have argued that MO strategies eventually
substitute for PN strategies as formal institutions develop (North, 1990).
In contrast, others have argued for the benefits of a hybrid MO-PN
strategy (e.g., Holburn & Vanden Bergh, 2014). These inconsistent
findings indicate that multiple possibilities exist between PN, EO, and
MO strategies, which are contingent on their complex environments.
These configurations include a willingness to balance proactive and
responsive market strategies and to combine market and non-market
strategies (Marquis & Raynard, 2015; Wang & Liu, 2020).
2.5. Complex operating environments in emerging economies
In emerging economies, operating environments pose complex
challenges to new venture performance (Bruton, Ahlstrom, & Obloj,
2008). In these settings, ventures confront rampant unfair competition
(unchecked by adequate legal protections), and cannot always rely on
consistent government support (Shi, Markóczy, & Stan, 2014). More­
over, market reforms can vary by region, which create unbalanced sit­
uations that intensify the severity of certain conditions. We refer to these
environments as complex because new ventures need to manage both the
scope and scale of external environments (Greenwood, Raynard, Kodeih,
Micelotta, & Lounsbury, 2011). While there are many aspects of these
environments, we focus on three common conditions in emerging
economies: environmental hostility, dysfunctional competition, and lack
of institutional support.1 In the following sections, we delve into the
specific conditions – and the possible inter-dependence between them –
to explain why they are collectively complex for new ventures to navi­
gate, as well as justify the need for a more comprehensive configura­
tional model.
Environmental hostility (EH) refers to the extent of strategic threats
1
Although we support our choice of the three crucial external environments
conceptually, we also found no agreement among EO researchers regarding the
most important environmental conditions to analyze. Ireland, Covin, and Kur­
atko (2009) reported about 20 “environments” used in various EO study at the
time of their review. According to a meta-analysis of 53 EO studies by Rauch
et al. (2009), “There is little consensus on what constitutes suitable modera­
tors…and various environmental variables (e.g., Tan & Tan, 2005) have been
included in studies of EO” (p. 766).
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Journal of Business Research 124 (2021) 272–285
incurred by the “multifacetedness, vigour and intensity of the compe­
tition and the downswings and upswings of the firm’s principal in­
dustry” (Miller & Friesen, 1983, p. 222). EH increases as more firms vie
for the same set of customers where barriers to entry are low, as is the
situation in China for many industries. In such situations, competition
often focuses on price and speed. In China, low-cost players enter the
industry with shanzhai (imitation or knock-off) products and spark price
wars. The concern of immediate survival weighs more heavily on new
ventures than those pursuing longer-term strategies when weak formal
institutions make any long-term investments risky (Nee, 1992).
Dysfunctional competition (DC) represents the degree to which “the
competitive behavior of firms in a market is opportunistic, unfair, or
even unlawful” (e.g., Li & Atuahene-Gima, 2001, p.1125). In emerging
economies like China, opportunistic and other dysfunctional behaviors
are neither effectively monitored nor controlled (Kim & Li, 2014; Cai
et al., 2017). New ventures often lack protections against unfair business
practices, and must employ strategies to combat against perceived
threats (Tuggle & Gerwin, 1980). These strategies and their effects are
contingent on perceived DC, and vary across regions and industries Liu
and Atuahene-Gima, 2018; Du et al., 2016). Negative environments
could be more serious if DC and EH are perceived to co-exist.
Lack of institutional support (LIS) represents the extent to which
formal governmental institutions fail to protect organizations from the
negative effects of imperfect markets and legal systems (Xin & Pearce,
1996). New ventures in China must cope with weak market structures,
ineffective property rights protection, and fewer opportunities to receive
governmental assistance compared to SOEs (Shi et al., 2014). Given
these concerns, we frame this condition as a lack of institutional support to
highlight the threat this poses on new venture performance. The
“invisible hand” guides markets in developed economies. However, in
emerging economies like China, the level of market reforms and insti­
tutional support can vary across regions or sectors (Li & Qian, 2013).
While the government can appear to act as a “helping hand” to foster
business growth, LIS can also enable officials to use their “grabbing
hand” to expropriate rents from new ventures (Frye & Shleifer, 1997;
Williamson, 1991). As a result, new ventures need to calibrate their
strategies, depending on which one of the three forms of governmental
roles regarding institutional support (or lack thereof) they confront.
Given the scope and scale of these three conditions, we argue that
new ventures must employ appropriate strategies to navigate the com­
plexities of their external environments. They are complex not only
because new ventures need to address multiple conditions concurrently
(scope) but also because each condition may vary in their intensity
(scale). Depending on the region or sector, new ventures may operate in
uniformly difficult or supportive conditions, or some complex combi­
nations of each (Greenwood et al., 2011). In emerging economies with
weak institutions, combining EH, DC, and LIS provides a more realistic
picture of the external environments that new ventures face (Covin &
Slevin, 1989).
From an analytical standpoint, assessing the different strategy com­
binations for these complex environments also requires a configura­
tional approach. Most research on external conditions has focused on the
relationship between either a single strategy (such as EO) or dual
strategy (EO-MO or MO-PN) with new venture performance moderated
by a single external condition (such as EH). Accommodating the causal
complexity between multiple strategies and high performance amid
combinations of different external conditions requires an asymmetric
approach open to multiple pathways (equifinality) (Douglas et al.,
2020).
To summarize our configurational arguments using the
entrepreneurial-marketing exploration–exploitation framework: we
argue that new ventures in emerging economies employ different com­
binations of EO (to generate new opportunities), MO (to respond to
market demand and competition), and PN (to secure resources or legit­
imacy) as strategies to maneuver through complex operating environ­
ments. To properly explore different combinations of growth strategies
Y. Du and P.H. Kim
(EO, MO, and PN) and three operating conditions for high performance,
we require an asymmetric configurational methodology that accom­
modates multiple conditions simultaneously to untangle causal
complexity based on abductive inference (Douglas et al., 2020; Wood­
side, 2017). These combinations can clarify how and why the incon­
sistent dual EM strategy findings can be explained once causal
complexity is considered.
3. Methods
3.1. Sample
For our configurational analysis, we examined a sample of new
ventures located in China collected by a leading professional survey firm
(Beijing Ebuywww) between October 2009 and June 2010. The survey
included questions about the new ventures’ growth strategies, operating
environments, and performance. We used standard procedures such as
back-translation methods to translate English versions of the scales into
Chinese and back into English (Brislin, 1980) and invited practitioners
to assess the scales’ face validity. Using their proprietary database of
new ventures developed from the National Economic Census and Census
of Basic Units (National Bureau of Statistics of China), the survey firm
originally contacted 900 new ventures in China across sixteen industries
located in twenty cities in three municipalities and five provinces (Bei­
jing, Guangdong, Hebei, Heilongjiang, Hunan, Jiangsu, Shanghai,
Tianjin). 209 new ventures participated in the survey. After deleting 10
cases because of missing data, we formed our study’s analytic sample of
199 cases. Our sample represents a broad regional and industry distri­
bution of new ventures in China and variation in the perceived operating
conditions related to the arguments for our study. To ensure high quality
data, we implemented several checks into the data collection process.2
Although our sample has been previously examined (Du et al., 2016), we
conducted a new set of analyses with this same dataset to demonstrate
how investigating necessary and sufficiency conditions can yield
different results from our previously published conventional regression
analyses. With our programmatic research interests in mind (Covin &
McMullen, 2019), we also introduce procedures for using specific
methods to test conditions in ways that are novel to existing entrepre­
neurial growth strategy research.
3.2. Fuzzy-set QCA procedures, methods and data preparation
To conduct our tests for necessary and sufficient causality, we used
fuzzy-set qualitative comparative analysis (fsQCA), a method appro­
priate for investigating asymmetric and configurational arguments (e.g.,
Ragin, 2008). This approach allows for several analytical possibilities.
First, fsQCA can identify whether single conditions are necessary for
achieving the outcome. Second, it can explore the sufficiency of multiple
configurations associated with the same outcome, a situation called
equifinality, where “a system can reach the same final state from different
initial conditions and by a variety of different paths” (Katz & Kahn,
1978, p. 30). Third, fsQCA can examine causal asymmetry for high and
not-high performance (Fiss, 2011; Ragin, 2008).
We report our results using the conventional notations: core condi­
tions are present or absent , peripheral conditions are present or
absent , and a blank space where the presence or absence of conditions
does not matter (Fiss, 2011). Core conditions are those present in both
parsimonious solutions (or necessary conditions) and corresponding
intermediate solutions. Peripheral conditions are those present in in­
termediate solutions (i.e., only easy counterfactual analysis is used), but
not in parsimonious solutions (Fiss, 2011). For identifying easy
2
These checks included carefully reviewing the responses of the first 30
companies surveyed for accuracy, independently verifying the information by
contacting the respondents, and conducting preliminary descriptive analyses.
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Journal of Business Research 124 (2021) 272–285
counterfactuals, we make a conservative assumption: that a presence of
market orientation leads to a presence of high performance.
3.3. Measures and calibrations for set membership
Before conducting the configurational analysis, we needed to cali­
brate each variable for set membership. There are three techniques to
determine which qualitative anchors to use for scale measures. First, we
used substantive knowledge from pre-validated scale anchors [such as
“strongly disagree” (minimum), “neither agree nor disagree”
(midpoint), and “strongly agree” (maximum)] as the three threshold
values (i.e., fully out, crossover point, and fully in) (Misangyi et al.,
2017). This technique works best when the variable distribution aligns
closely with the anchors and “only through the use of theoretical and
substantive knowledge” (Ragin, 2008, p. 30). We used this technique for
five of our seven variables. For the remaining two variables (which
revealed a substantially different distribution from their scale anchors),
we used a second technique relying on their sample minimum, mid-
point, and maximum values as the threshold values, which provides
partial substantive knowledge about the scale anchors (Fiss, 2011;
Ordanini & Maglio, 2009; Misangyi et al., 2017).3 Following established
practices, we also recalibrated each set with an exact 0.5 membership
score by adding a small constant (0.001) (e.g., Fiss, 2011). Table 1
summarizes the variables, calibration anchors for each fuzzy set, and
descriptive statistics. In the Appendix, we list the survey questions used
to collect information for these variables.
3.3.1. Outcome variable and calibration
We assessed new venture performance (NVP) using a scale validated by
previous studies (e.g., Li & Atuahene-Gima, 2001; Adomako, Opoku, &
Frimpong, 2018). The performance measure consists of five financial
indicators and four market indicators. Respondents assessed their ven­
ture’s performance compared with principal competitors over the past
three years on five-point scale, anchoring with 1 referring to “much
worse” and 5 representing “much better” (α = 0.86). Since the sample
distribution deviated from the scale anchors, we calibrated it for set
membership using the minimum (1.67), maximum (5), and mid-point
value (3.35) as the threshold values for fully out, fully in, and cross­
over point of high performance (Fiss, 2011). The next two versions –
absence of high (or not-high) performance, low performance – were
created to examine different (or asymmetric) causes of successful and
unsuccessful venture performance. Not-high performance is simply the
negation of the high-performance measure. Membership in the low
performance set was fully out at the anchor value of 3 and fully in at the
minimum observed value of 1.67. The crossover point was 2.24.
3.3.2. Independent variables and calibrations
We measured entrepreneurial orientation (EO) using the scale devel­
oped by Covin and Slevin (1989) and employed in previous studies
(Stam & Elfring, 2008; Morgan & Anokhin, 2020). This scale contained
nine items (on a seven-point scale) assessing a firm’s entrepreneurial
postures in proactiveness, innovativeness and risk-taking (α = 0.72).4
3
A third calibration technique – based on the percentile breakpoints – is
employed when substantive knowledge about scale anchors is unavailable (De
Crescenzo et al., 2020). Since the two primary calibration methods were
possible using substantive knowledge, we did not employ the third technique
for our data.
4
Similar to Stam and Elfring (2008), we replaced the “undo competitors” or
to “live and let live” item from Covin and Slevin (1989) with an item asking
whether a firm has a strong tendency to be follower or first-mover relative to
other competitors in introducing new products and services. This minor change
improved the reliability from 0.70 to 0.72 and produced three (instead of four)
dimensions, which are more consistent with EO conception of Covin and Slevin
(1989).
Y. Du and P.H. Kim Journal of Business Research 124 (2021) 272–285

Table 1
Sets, calibrations and descriptive statistics.
Fuzzy set calibrations Descriptive statistics

Sets Fully out Crossover Fully in Mean SD Min Max

New venture performance (NVP) 1.67 3.34 5 3.58 0.62 1.67 5.00
Entrepreneurial orientation (MO) 1 4 7 4.22 0.96 1.22 6.67
Market orientation (MO) 2 3.5 5 3.76 0.70 2.00 5.00
Political networking (PN) 1 3 5 2.90 0.96 1.00 5.00
Environmental hostility (EH) 1 4 7 4.55 1.28 1.00 7.00
Dysfunctional competition (DC) 1 3 5 2.84 0.91 1.00 4.75
Lack of institutional support (LIS) 1 3 5 3.14 0.89 1.00 5.00

Note: Set membership calibration for NVP and MO were based on the minimum (fully out), median (crossover), and maximum (fully in) since the actual sample
distributions deviated substantially from the scale anchors (Fiss, 2011). The calibration for the other variables were based on their respective scale anchors: lowest
(fully out), midpoint (crossover), and highest (fully in).

We assigned the scale anchors 1, 4, and 7 as the thresholds for fully out, 4. Results
crossover point, and fully in the high EO set.
We measured market orientation (MO) using a scale taken from pre­ Using the fsQCA method, we conducted both necessary (“No Y
vious studies (Narver & Slater, 1990; Morgan & Anokhin, 2020). The without X”) and sufficient causality analyses (“If X, then Y”). With this
respondents evaluated their ventures’ market activities over the three two-step analytical sequence, we can determine whether any strategy is
previous years on the five-point scale, with 1 referring to “strongly necessary and/or sufficient for high performance amid complex oper­
disagree” and 5 to “strongly agree” (α = 0.90). We calibrated the min­ ating conditions.
imum observed value (=2) for fully out, and the maximum observed
value (=5) for fully in high MO set.5 The crossover point was 3.5.
4.1. Necessary conditions analysis
We measured political networking (PN) using a scale created by Li and
Atuahene-Gima (2001). The scale contains four items that assessed the
Following established QCA practices, we first conducted a fuzzy-set
extent to which entrepreneurs tried cultivating relationships with gov­
analysis of necessary conditions (see Table 2) using a consistency
ernment officials and agencies in the last three years (Du et al., 2016).
benchmark of 0.90. We found no pathways where just a single strategy
The assessment was conducted on a five-point scale, anchored by 1,
of EO, MO, or PN was necessary for high performance.6 However, we did
representing “to no extent,” and 5, representing “to a great extent.” We
find that a union set of EO and MO is necessary. This means that high
assigned the scale anchors 1, 3, and 5 as the thresholds for fully out,
performance does depend on deploying at least one of the two strategies
crossover point, and fully in the high PN set.
(i.e., EO, MO, or both).
We measured environmental hostility (EH) using a scale from Miller
(1987). The scale contains three items to capture changes in hostility by
principal competitors and environmental constraints in law, politics, 4.2. Sufficiency analysis for performance
and the economy (Welsh, Kaciak, & Shamah, 2018). Subjective envi­
ronmental measures are used, because strategic choices are based on the We conducted a sufficiency analysis following established QCA
extent to which decision makers are aware of their external environ­ procedures by using a frequency benchmark ≥ 2, raw consistency
ments (Tuggle & Gerwin, 1980). We used a seven-point scale, with an­ benchmark ≥ 0.8, and a proportional reduction in inconsistency (PRI) ≥
chors 1 and 7 representing two end-points, and 4 referring to no change. 0.70 (Greckhamer, Furnari, Fiss, & Aguilera, 2018). We report two sets
We combined the four items into a single EH scale (α = 0.61), assigning of results: the configurations for the presence of high performance,
the scale anchors 1, 4, and 7 as the thresholds for fully out, crossover followed by the results for the absence of high and low new venture
point, and fully in the high EH set. performance.
We measured dysfunctional competition (DC) using a scale developed
by Li and Zhang (2007). It assesses the extent to which new ventures Table 2
perceive opportunistic behaviors in their principal industries over the Analysis of necessary conditions for high new venture performance in fsQCA.
past three years (Cai et al., 2017). The five-point scale was anchored Sets of conditions Consistency Coverage
with 1 meaning “to no extent” and 5 meaning “to a great extent” (α =
Entrepreneurial orientation + Market orientation 0.922 0.772
0.73). We calibrated the scale anchors 1, 3, and 5 for fully out, crossover
Entrepreneurial orientation 0.801 0.829
point, and fully in the high DC set. ~Entrepreneurial orientation 0.617 0.824
We measured lack of institutional support (LIS) using a scale developed Market orientation 0.833 0.813
by Li and Atuahene-Gima (2001). This scale contains four items to ~Market orientation 0.537 0.780
Political networking 0.673 0.813
capture the extent to which the government and its agencies have sup­
~Political networking 0.690 0.777
ported firms in the past three years (Adomako et al., 2018). We used a Environmental hostility 0.788 0.766
five-point scale for the four items anchored by 1, meaning “to no extent,” ~ Environmental hostility 0.590 0.860
and 5, meaning “to a great extent.” We reversed the scales to have 1 Dysfunctional competition 0.668 0.834
reflect low lack of institutional support, and 5 reflect high lack of ~Dysfunctional competition 0.716 0.783
Lack of institutional support 0.696 0.761
institutional support (α = 0.77). Ventures were fully out of the LIS set at
~Lack of institutional support 0.679 0.848
the lower limit of 1, fully included at 5, and the crossover point was 3.
Note: ~ means the absence of. For example: ~ Entrepreneurial Orientation =
absence of high EO.

5
Our MO variable distribution is consistent with other studies: According to
Ordanini and Maglio (2009),“managers tend to overestimate the market
6
orientation of their firms, leading to right-skewed distributions of answers” (p. They are insufficient but necessary conditions for a configuration that is
612). itself unnecessary, but sufficient for performance (INUS) (Mackie, 1965)

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Y. Du and P.H. Kim
4.2.1. Configurations for high new venture performance
In Table 3, we display results for four first-order configurational
solutions that are sufficient for high new venture performance with high
solution consistency and solution coverage (0.89, 0.75, respectively)
and that satisfied consistency and coverage for each solution (De Cre­
scenzo et al., 2020). Solution 1 (S1) shows a dominant MO strategy. We
observe that high MO (without high PN) is sufficient for high perfor­
mance amid environmental hostility and lack of institutional support.
S1′ s consistency (0.92) exceeds the accepted threshold of 0.80 and as
shown by its raw coverage (0.48), S1 accounts for a substantial pro­
portion of the high new venture performance outcome.7
Solution 2 (S2) contains different permutations of a dual EO-MO
strategy. New ventures can achieve high performance by pursuing an
ambidextrous high exploration (EO) and high market exploitation (MO)
strategy when faced with high EH (S2a), or high LIS / high DC (S2b). We
refer to S2c as a triple EO-MO-PN strategy, since it adds high PN as a
form of non-market exploitation to address high LIS. The consistency
values of S2a (0.92), S2b (0.94), and S2c (0.95) all exceed the acceptable
threshold of 0.80. The raw coverages of S2a (0.61), S2b (0.45), S2c
(0.43) confirm that S2 explains a considerable percentage of the high
new venture performance results.
Solution 3 (S3) represents a dual EO-PN strategy. New ventures can
achieve high performance using high exploration (EO) combined with
high non-market exploitation (PN) amid high DC and when EH and LIS
conditions are both absent. In this situation, when the competition is not
hostile and governmental support resources are available, new ventures
can achieve high performance by combining high EO (exploration) with
high PN (non-market exploitation) to confront the downsides of high
dysfunctional competition. Solution 3′ s consistency (0.96) exceeds the
accepted threshold of 0.80. S3 explains about a third of the high new
venture performance results (raw coverage = 0.33).
In Solution 4 (S4), we identify a dual MO-PN strategy. We find that
high MO combined with high PN is sufficient in EH and when LIS is
absent (or government support exists). For this scenario, new ventures
can achieve high performance by focusing on dual market-non-market
exploitation strategies to fight against their competition (EH) and
secure government support resources. Solution 4′ s consistency (0.94)
exceeds the accepted threshold of 0.80. S4′ s raw coverage (0.46) in­
dicates that S4 explains a sizeable proportion of the high new venture
performance outcome.
4.2.2. Configurations for absence of high and low new venture performance
Besides investigating the pathways for high performance, we relied
on the principle of asymmetric causality to conduct separate analyses on
the absence of high performance, and low new venture performance.
Because of asymmetric causality, it is possible that pathways for the
absence of high performance are different for high performance and not
simply the negation of conditions for the presence of high performance.
If true, this means that the causes for growth are different than the
causes of non-growth (e.g., Ucbasaran, Shepherd, Lockett, & Lyon,
2013). In separate analyses using procedures provided by Fiss (2011),
we did not find any sufficiently consistent solutions for the absence of
7
In fuzzy-set QCA, raw coverage measures how much the outcome Y is
explained by certain pathways (Xs). Raw coverage is defined by the sum of
minimum membership (i.e. interset) between X and Y for all cases divided by
the sum of membership of Y for all cases.
278
Journal of Business Research 124 (2021) 272–285
high performance and low new venture performance to produce a set of
configurations to compare with the high-performance configurations in
Table 3. Instead, we interpret the low consistency values as evidence
that new ventures have many possible (but no consistent) pathways to
be nonperforming, an interpretation we adapted from a similar finding
by Fiss (2011, p. 410).8
4.3. Robustness checks
To rule out common method bias (CMB) issues in our data, we
conducted a Harman’s single factor test. The analysis showed about only
18.3% total variance was explained by the largest factor, much lower
than corresponding 22.4% of the variance explained by the largest factor
in similar research (Fiss, 2011). This is in line with Rauch et al. (2009)
review, who concluded that CMB from perceived and single-informant
measures was not an issue.
We also conducted several robustness checks for both necessary and
sufficiency findings. To confirm our necessary causality findings, we
conducted a follow up analysis using Necessary Condition Analysis
(NCA). A benefit of NCA is that it can also pinpoint the range of ne­
cessity, which is not available in the QCA necessary analysis (which only
provides a binary assessment). Table 4 summarizes the NCA results on
calibrated data (i.e., membership scores) using the two procedures for
calculating necessary effect sizes (CR and CE). In NCA, a condition is
necessary when its effect size (d) is at least 0.1 (Dul, 2016) and the
permutation test indicates the effect size is impossible due to chance
(Dul et al., 2018). The effect sizes of MO (d = 0) and PN (d = 0) are
small, and their permutation tests reveal they are not significant (p = 1).
These results indicate that neither MO nor PN is necessary for high NVP
and confirm our QCA findings. EO also did not pass the two necessary
condition tests because of its small effect size (d = 0.047, p = 0.245)
using the CR method.9
We also conducted two additional robustness checks for our suffi­
ciency analyses. First, we reran our calibrations for two conditions – EO
(6.67) and DC (4.75) – using their actual maximum values instead of
their scale endpoints of EO (7) and DC (5), since EO and DC had little
deviation between the sample distributions and the scale anchors. This
change produced the same configuration results and confirmed that
when the observed maximum or minimum values are close to the scale
anchors, the calibrations from both procedures (actual values, scale
anchors) produce similar solutions. Second, we reran our sufficiency
analysis with a higher proportional reduction in inconsistency of PRI ≥
0.75 (compared to PRI ≥ 0.70 used in our main models) (Misangyi &
Acharya, 2014). The solutions remained similar.
5. Discussion
We return to the puzzle that compelled us to conduct our study.
Although new ventures confront daunting operating conditions with an
assortment of strategies, we lack configurational evidence detailing
these options. When past research on individual or dual entrepreneurial
marketing strategies are compared collectively, it reveals inconsistent
empirical results, overlooks vital combinations with non-market stra­
tegies, and obscures the true causal complexity of what drives high
8
Since we did not find any sufficiently consistent configurations for the
absence of high or low performance outcomes, we could not prepare a “side by
side” table to compare with the high-performance configurations similar to De
Crescenzo et al. (2020). Our interpretation is guided by Fiss (2011): “These
findings indicate the absence of a clear set-theoretic relationship when either
the absence of high performance or the presence of low performance is used as
the outcome. In other words, there are many ways to be nonperforming here,
but no consistent pattern” (p. 410).
9
When we used the CE method (for discrete variables with less than five
levels), we found a small effect size (d=0.066, p=0.092).
Y. Du and P.H. Kim Journal of Business Research 124 (2021) 272–285

Table 3
Configurations for achieving high new venture performance (fsQCA).
Solutions
Configuration S1: MO S2a: Dual EO-MO strategy S2b: Dual EO-MO strategy S2c: Triple EO- S3: Dual EO-PN strategy S4: Dual MO-PN strategy
strategy (exploration + market (exploration + market MO-PN (exploration + nonmarket (market + nonmarket
exploitation) exploitation) strategy exploitation) exploitation)

Growth strategies
EO
MO
PN
Operating
conditions
EH
DC
LIS
Consistency 0.92 0.92 0.94 0.95 0.96 0.94
Raw coverage 0.48 0.61 0.45 0.43 0.33 0.46
Unique coverage 0.03 0.04 0.02 0.01 0.03 0.02
Overall solution 0.89
consistency
Overall solution 0.75
coverage

= core causal condition present; = core causal condition absent; = peripheral condition present; = peripheral condition absent.

When competition is highly intense and institutional support is highly

Table 4 lacking, the negative value of high PN becomes more evident. Thus,
Results of Necessary-Condition Analyses (NCA).
avoiding high PN altogether in place of a strong emphasis on MO can be
Fuzzy-set Method Accuracy Ceiling Scope Effect P beneficial (S1: MO as a dominant strategy). When EH is high or both DC
conditiona zone sizeb (d) valuec
and LIS are high, a dual EO-MO strategy (S2a-S2b) works well by
EOfs CR 99% 0.037 0.79 0.047 0.245 combining a proactive EO stance with responsively meeting market
CE 100% 0.052 0.79 0.066 0.092 needs. When LIS is high, a triple EO-MO-PN strategy (S2c) generates
MOfs CR 100% 0.000 0.81 0.000 1.000
CE 100% 0.000 0.81 0.000 1.000
governmental resources to fuel the exploration and exploitation of new
PNfs CR 100% 0.000 0.81 0.000 1.000 opportunities needed for ongoing growth. When operating conditions
CE 100% 0.000 0.81 0.000 1.000 are more favorable, the value of high PN becomes more evident when it
Note: NCA procedures are taken directly from Dul (2016).
can complement EO as an exploration (S3: dual EO-PN) or MO as an
a
Membership scores are used instead of values in raw variables. exploitation (S4: dual MO-PN) strategy. Collectively, by incorporating
b
0.0 ≤ d < 0.1: “small size”; 0.1 ≤ d < 0.3: “medium size.” PN as non-market strategy needed in complex environments, our find­
c
NCA analysis with the permutation test (resampling = 10,000). ings provide a more unified explanation for how and why seemingly
inconsistent patterns for the EO-MO-performance relationship can all be
performance. We discuss how our research helps to rectify these short­ valid when different environmental conditions are properly considered
comings. We also demonstrate how configurational theories and (S1, S2a, S2b) (Morrish et al., 2010; Morgan & Anokhin, 2020; Wang &
methods can be employed to analyze the complexities of Liu, 2020). In addition, our findings also reveal how new ventures have
entrepreneurship. different exploration–exploitation pathways available to achieve high
performance: S2c as a triple EO-MO-PN strategy, S3 as a dual EO-PN
strategy, and S4 as a dual MO-PN strategy. Table 5 (Column D) sum­
5.1. Theoretical implications marizes our key findings, how these findings compare to published
research, and the implications of their differences.
Multiple pathways to growth: In our asymmetric analysis, we identified No single strategy of exploration or non-exploration is necessary for high
six second-order equifinal configurations sufficient for high NVP in NVP: Prior studies on NVP have assumed specific entrepreneurial
China. Although tradeoffs in time and resources exist between explo­ growth strategies as necessary conditions for achieving high perfor­
ration versus exploitation strategies (“either/or”) (Morgan & Anokhin, mance. As summarized in Table 5 (Columns B, C), we highlight various
2020; Wang & Liu, 2020), a configurational framework shows high new studies that assumed necessary conditions in terms of EO (Covin &
venture performance results from when joint strategies are implemented Slevin, 1989; Stam & Elfring, 2008), MO (e.g., Hult & Ketchen, 2001),
(“both/and” referred to as ambidexterity) (Morrish et al., 2010; Debrulle, and PN (Peng, 2003) for achieving high performance. However, our
Steffens, De Bock, De Winne, & Maes, 2020). The six combinations causal complexity analysis revealed that no single strategy is necessary
revealed by our configurational approach help address conflicting for achieving high venture performance. This finding opens up the
strategy-environment-performance relationships reported in past possibility that new ventures can benefit from flexible strategies when
studies, especially puzzling when reviewed collectively. A configura­ facing strong selection pressures in complex environments (Aldrich,
tional approach helps resolve this puzzle by affirming these in­ 2008; Ott & Eisenhardt, 2020).
consistencies actually represent distinct pathways to high performance Asymmetric pathways for growth and non-growth: Our asymmetric
in complex environments. configurational findings for high performance, not-high (i.e., any level
Our primary takeaway is that when new ventures operate in below high) performance, and low performance provide new insights for
extremely complex environments, they can still achieve high perfor­ the entrepreneurial growth and failure literatures (e.g., De Crescenzo
mance using entrepreneurial marketing in different ways: by focusing et al., 2020; Naldi & Davidsson, 2014; Shepherd, 2003). Past studies
solely on MO (Solution 1) or combining high exploration (EO) with showed the opposite effects of an EO strategy on performance, contin­
exploitation via market (MO – Solution 2) or non-market (PN – Solution gent on networking efforts (Stam & Elfring, 2008) or an inverted U-
3) strategies to balance proactive exploration and responsive exploita­ shape relationship between EO and new venture performance in China
tion (Morrish et al., 2010; Morgan & Anokhin, 2020; Wang & Liu, 2020).

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Y. Du and P.H. Kim Journal of Business Research 124 (2021) 272–285

Table 5 Table 5 (continued )

Growth strategies and new venture performance: Review of past studies and A B C D
summary of study findings.
Growth General argument Summary findings Our findings using a
A B C D Strategies for a single strategy regarding effect of configurational
Growth General argument Summary findings Our findings using a single strategies or approach (QCA &
Strategies for a single strategy regarding effect of configurational dual strategies in NCA)
single strategies or approach (QCA & various operating
dual strategies in NCA) conditions using
various operating conventional
conditions using regression methods
conventional MO-NVP
regression methods relationship (Du
EO EO involves - On average, EO is Fuzzy-set analysis of et al., 2016).
exploration or positively related to necessary
Growth strategies: EO = Entrepreneurial orientation, MO = Market orientation,
experimentation business performance conditions:
PN = Political networking, Operating Condition: EH = Environmental hostility,
behaviors that based on meta- - No single strategy
generate forward- analyses (e.g., Rauch (EO, MO, PN) is DC = Dysfunctional competition, LIS = Lack of institutional support, Outcome:
looking et al., 2009). necessary for high NVP = New venture performance.
opportunities. Past - EO-performance NVP.
research reported relationship is - Union set of EO and
(Tang et al., 2008). A configurational approach again offers a way to
that EO is necessary strengthened in hostile MO is necessary for
but not sufficient for environments high NVP.
reconcile these inconsistent findings and provides new insights by
high performance because firms need to Sufficient conditions analyzing the asymmetric roles of inter-dependent conditions across
(e.g., Covin & explore new analysis: configurations for the same outcome, or asymmetric causality of the
Slevin, 1989; opportunities to Exploration (EO)- presence and absence of the outcome. Specifically, our findings reveal
Wiklund & grow (Lumpkin & Exploitation via
that high EO leads to high performance in some configurations with MO
Shepherd, 2011; Dess, 2001). Market pathways
Stam & Elfring, - EO-performance - High EO combined or PN (S2a, S2b, S2c, S3), while it does not play a crucial role in other
2008). relationship is with high MO can pathways (S1 and S4). Second, since experimentation from high EO does
weakened in hostile produce high NVP not guarantee immediate results, new ventures need to manage the time
environment when when EH is high and resource challenges of this exploration strategy. They can do this by
new firms lack (S2a).
organizational slack - High EO combined
leveraging resources gained through a high MO strategy or from the
(Bradley et al., with high MO can government through a high PN strategy (Wiklund & Shepherd, 2011).
2011). produce high NVP These alternative pathways become evident through an asymmetric
- Entrepreneurial when LIS and DC are approach.
marketing (EM) is high (S2b), PN and
Because of the lack of any consistent causal combinations for not-
important for dealing LIS is high (S2c).
with increasing Exploration (EO)- high performance and low performance, our findings offer another
complex competitive Exploitation via Non- way to evaluate the complexities associated with venture “non-success.”
landscape (Morris, market pathway We show there are many additional possible and inconsistent pathways
Schindehutte, & - High EO combined (or reasons) for “non-success.” From a practical standpoint, it is more
LaForge; Morris with high PN can
et al., 2002). produce high NVP
challenging to avoid the risks of an unsuccessful venture. It is not as
- EO-MO dual when EH and LIS are simple as avoiding a single strategy or transferring knowledge from a
strategy for small not high, and DC is failed past attempt to the current one (Toft-Kehler, Wennberg, & Kim,
firms is inefficient high (S3). 2014).
due to resource Exploitation via
Symmetric contingent versus asymmetric configurational theoretical ex­
constraints, Market + Non-market
strategies choice pathways planations: Up to now, the common approach to analyzing the joint ef­
needed for proactive - High MO combined fects of multiple strategy and environmental conditions on performance
MO and responsive with high PN can outcomes has been to focus on contingency effects using symmetric and
MO (Morgan & produce high NVP traditional linear regression models (e.g., Morgan & Anokhin, 2020;
Anokhin, 2020; when EH is high and
Wang & Liu, 2020). LIS is not high (S4).
Wiklund & Shepherd, 2005). This symmetric approach oversimplifies
MO MO involves - On average, MO is - High MO combined the realities of how different strategies work with each other (Douglas
responding to positively related to with avoiding PN et al., 2020; Woodside, 2013). Our study affirms the benefits of using an
competitors and business performance can produce high asymmetric configurational approach to evaluate the full range of ven­
customer needs. Past based on meta- NVP when EH and
ture performance pathways. Our results confirmed that the individual
research reported analyses (Kirca et al., LIS are high (S1).
that MO is necessary 2005). strategies do not simply substitute for or complement one another, like
but not sufficient for - Competitive hostility equivalent menu items on a growth strategy checklist. This distinction is
high performance positively moderates especially pertinent for determining optimal combinations of EO, MO,
(e.g., Hult & MO-performance and non-market strategies necessary for high venture performance (e.g.,
Ketchen, 2001, p. relationship (Kumar,
900). Subramanian, &
Peng, 2003; Morrish et al., 2010; Morgan & Anokhin, 2020; Wang & Liu,
Yauger, 1998). 2020).
- DC positively Importance of context: Scholars emphasize the importance of context
moderates MO-NVP in shaping performance outcomes (Kim, Wennberg, & Croidieu, 2016;
relationship (Du
Welter, 2011). We described how emerging economies are ideal contexts
et al., 2016).
PN PN as non-market - At low DC, dual PN- to study strategy configurations because of the complex environments
strategy is necessary MO strategies they embody. By examining entrepreneurial- and market-oriented stra­
but not sufficient for positively moderate tegies (EO, MO) in combination with political networking, our findings
high performance in NVP. show how ventures can use this non-market to navigate the uncertainties
emerging economies - At high DC, PN
(Peng, 2003). negatively moderates
of whether the government extends a “helping hand” or a “grabbing
hand.” Although high PN is beneficial for securing institutional support,

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it can also have its downsides, since high PN does not always reduce the
“grabbing hand” threat by powerful governments (Frye & Shleifer,
1997). Rather, high PN can increase the possibility of governmental
interference and have a negative consequence on performance (Marquis
& Raynard, 2015; Okhmatovskiy, 2010).
Without properly differentiating these opposing influences, any
analysis of the government’s influence will yield mixed findings. Our
findings indicate that when highly dysfunctional competition occurs,
institutional support from government sources may act as a “helping
hand” in advancing exploratory or market activities of new ventures, but
this support has asymmetric properties. Our findings confirm this
viewpoint. A strong dual EO-PN or MO-PN strategy leads to high per­
formance when institutional support exists to help overcome dysfunc­
tional competition (S3) or environmental hostility (S4). However, our
findings also show configurations without PN – an MO dominant (S1) or
a dual EO-MO (S2b) strategy – lead to high performance even with a
strong lack of institutional support. While these findings would be
contradictory in conventional regression-based studies, our asymmetric
configurational approach validates both solutions.
5.2. Limitations and future research
5.3. Practical implications and conclusion
New ventures in China face daunting growth prospects amid complex
conditions related to weak institutions. Knowing which growth strate­
gies to employ in these complex environments influences the success of
new ventures. By applying a configurational perspective, we evaluate
strategic effectiveness of new ventures based on causal complexity logic.
Specifically, using fsQCA in analyzing a dataset of nearly 200 new
ventures in China, we show how strategy-configuration-performance
relationships are causally asymmetric, that multiple conditions (i.e.,
strategies and environments) form six equifinal paths can lead to high
performance, and that there is no consistent path to not-high or low
performance. This confirms a much more causally complex relationship
between market and non-market, exploration and exploitation strate­
gies, complex environments, and venture performance in our study’s
context. New ventures in emerging economies are best positioned to
succeed when they avoid a single one-size-fits-all strategy. To succeed,
these ventures can rely on different combinations of exploration,
exploitation, and non-market strategies based on their contexts, and
depend on entrepreneurial or market orientation or both as necessary
strategies for success, all of which are especially relevant in China’s
complex operating environments.

Despite our best efforts, our study is not without limitations. First, we
acknowledge that fsQCA’s strength is to extend theory based on neces­
sary and sufficiency causality using an abduction logic (Douglas et al.,
2020; Fainshmidt et al., 2020; Furnari et al., 2020). Future studies can
test causal complexity using deduction logic to complement our
configurational findings. Second, the conditions contained in fsQCA
studies are limited by observed cases. Possible configurations increase
exponentially with the number of conditions contained (i.e., 2N), so
inclusion of too many conditions leads to “limited diversity” (Ragin,
2008). In our study, we included a moderate number of conditions.
Future research can examine more complex settings involving additional
cases, strategies, and operating conditions. Third, we did not integrate
temporal effects, such as dynamism and turbulence, that deal with
unpredictability and changes in market trajectory over time (Miller,
1987). Future research can collect more longitudinal information about
these evolving trajectories to analyze temporal effects in a QCA
framework.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Acknowledgements
We appreciate the helpful comments and assistance from Charles C.
Ragin, Benoit Rihoux, Peer C. Fiss, Thomas Greckhamer, Johannes
Meuer, Bill Wales, and Nikki Bown. We also thank the participants to the
7th International QCA Expert workshop held in Zurich in December
2019 for their valuable comments. This work was supported by the
National Science Foundation of China under Grant 72072030,
71672033; Major Program of National Social Science Fund of China
under Grant 20AGL001. The study’s conclusions, however, are those of
the authors, and do not necessarily represent those of the Foundation.

Appendix. Measures used in present study

New Venture Performance (Source: Li & Atuahene-Gima, 2001) measured on a five-point scale:
1 = “much worse” and 5 = “much better” (α = 0.86)
Relative to principal competitors, rate your new venture performance over the last three years on: return on investment, return on sales, profit
growth, return on assets, cash flow from market operations, sales growth, market share growth, overall efficiency of operation, and the firm’s overall
reputation
Entrepreneurship Orientation: “the processes, structures, and behaviors of firms that are characterized by innovativeness, proactiveness, and
risk taking“ (Source: Covin & Slevin, 1989; No. 6 from Stam & Elfring, 2008), anchored at 1 and 7 as two end points (α = 0.72)

1 In general, the top managers of my new venture favor:

(1)… a strong emphasis on the marketing of tried and true products or services.
(7)… a strong emphasis on R&D technology leadership and innovations.

2 How many new lines of products or services has your company marketed during the past 3 years?

(1)… no new lines or products or services.

(7)… very many new lines of products and service.

3 How many new lines of products or services has your company marketed during the past 3 years?

(1)… changes in product or service lines have been mostly of a minor nature

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(2)… changes in product or service lines have usually been quite dramatic

4 In dealing with its competition, my company:

(1)… typically responds to actions which competitors initiate.

(7)… typically initiates actions to which competition then respond.

5 In dealing with its competition, my company:

(1) … is very seldom the first business to introduce new products or services, administrative techniques, operating technologies, etc.
(7) …is very often the first business to introduce new products or services, administrative techniques, operating technologies, etc.

6 In dealing with introducing new products and services, my company:

(1)… has a strong tendency to follow the leader.

(7)… be ahead of other competitors.

7 In general, the top managers of my company have:

(1)… a strong proclivity for low risk projects (with normal and certain rates of return).
(7)… a strong proclivity for high-risk projects (with chances of very high returns).

8 In general, the top managers of my company believe that:

(1)… owing to the nature of the environment, it is best to explore it gradually via cautious, incremental behavior.
(7)… owing to the nature of the environment, bold, wide-ranging acts are necessary to achieve the firm’s objectives.

9 When confronted with decision-making situations involving uncertainty, my firm:

(1)…Typically adopts a cautious, ’wait-and-see’ posture in order to minimize the probability of making costly decisions.
(7)…Typically adopts a bold, aggressive posture in order to maximize the probability of exploiting potential opportunities.
Market Orientation (Source: Narver & Slater, 1990) measured on five-point scale: 1 = “strongly disagree” and 5 = “strongly agree” (α = 0.90)
For each of the following questions, please indicate the response that most closely describes your organization.

1. In our new venture, our salespeople share information about competitor information
2. Our top managers from each business function regularly visit customers.
3. Information about customers is freely communicated throughout our organization
4. Business functions within are integrated to serve the target market needs.
5. We respond rapidly to competitive actions.
6. Top management regularly discusses competitors’ strength and weaknesses.
7. Customers are targeted when we have an opportunity for competitive advantage.
8. Our business objectives are driven by customer satisfaction.
9. We closely monitor and assess our level of commitment in serving customers’ needs.
10. Our competitive advantage is based on understanding customers’ needs.
11. We frequently measure customer satisfaction.
12. We pay close attention to after-sales service.
13. Our managers understand how employees can contribute to value of customers.
14. We share resources with other business units.

Political Networking (Source: Li & Atuahene-Gima, 2001) measured on a five-point scale: 1 = “to no extent” and 5 = “to a great extent” (α = 0.78)
Please indicate the extent to which top management of your firm over the last three years have:

1. Spent much effort in cultivating personal connections with officials of government and its agencies.
2. Maintained good relationships with officials of state banks and other government financial agencies
3. Devoted substantial resources to maintain good relationships with officials of administrative agencies.
4. Spent a lot of money on building relations with the top officials in government.

Environmental Hostility (Source: Miller, 1987, α = 0.61)

Changes in firm’s external environment over the past 3 years:

Market activities of your key competitors 1. Have become far more hostile 12345 Have become less hostile
67
(continued on next page)

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(continued )
Changes in firm’s external environment over the past 3 years:

2. Now affect the firm in many more areas (pricing, marketing, delivery, 12345 Now affect the firm in far
service, production, quality, etc.) 67 fewer areas
Legal, political and economic constraints (e.g. 3. Have proliferated greatly over the past 3 years 12345 Almost no change
government regulations) 67

Dysfunctional Competition (Source: Li & Atuahene-Gima, 2001) measured on a five-point scale: 1 = “to no extent” and 5 = “to a great extent” (α =
0.73)
Indicate the extent to which your principal industry has experienced the following in the last 3 years:

1. Unlawful competitive practices such as illegal copying of new products or services

2. Counterfeiting of your firm’s own products and trademarks by other firms.
3. Ineffective market competitive laws to protect your firm’s intellectual property.
4. Increased unfair competitive practices by other firms in the industry.

Institutional Support: “reflects the extent to which administrative institutions (such as government departments) provide support for firms in
order to reduce the adverse effects of the inadequate institutional infrastructure in the transition process (Source: Li & Atuahene-Gima, 2001)
measured on a five-point scale:
1 = “to no extent” and 5 = “to a great extent” (α = 0.77)
Please indicate the extent to which in the last three years government and its agencies have:

1. Implemented policies and programs that have been beneficial to your firm’s operations.
2. Provided needed technology information and technical support to your firm.
3. Played a significant role in providing financial support for your firm.
4. Helped your firm to obtain licenses for imports of technology, manufacturing and other equipment.

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Phillip H. Kim is a Professor of Entrepreneurship at Babson College, USA. His research
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