Strategies, uncertainty and performance of small business startups

Personal strategies of owners/founders of small business startups are relat ed to performance and to environmental uncertainty. This is done using a lo ngitudinal data set. Personal strategies are operationalized by a behaviora l measure of the manners in which small business founders deal with situati ons. The results suggest a dynamic process between strategy and performance . Business owners that perform poorly employ a Reactive Strategy, with poor performance leading to increased use of reactive behavior. High performing business owners start out focussing on the most crucial issues (Critical P oint Strategy), with high performance leading to a more top-down (Complete Planning) approach. These relations are controlled for characteristics of t he environment of the firm. Strategy use is dependent upon the type and lev el of environmental uncertainty. Complete Planning strategy is used less fr equently in a fast changing environment and more often in a complex environ ment. Use of Opportunistic Strategy is negatively related to the complexity of the environment, while the Reactive Strategy is used more frequently in a non-munificent environment.