The study is theoretically grounded in the resource-based view and applied to a service industry-tourism. It examined the performance of small ventures by utilizing an integrated dynamic model of entrepreneur choices and resource accumulation. Each phase in the process is added to previous one. Findings from 305 small tourism ventures revealed that the human capital of the entrepreneur, particularly managerial skills, were the greatest contributing factor to performance. This was followed by venture type. The study illustrates the unique nature of the entrepreneurial process among small ventures, often defined as “lifestyle businesses”.
The article draws on the resource-based view of the firm to analyze the role of resource accumulation in the entrepreneurial process. In accordance with the resource-based perspective, entrepreneurship can be viewed as a process of identification, acquisition and accumulation of resources to take advantage of perceived opportunities (Bergmann-Lichtenstein and Brush, 2001 and Stevenson et al., 1994). Thus, ventures can be viewed as tangible and intangible “bundles of resources”. According to this theory, resources can be combined or developed over time to generate unique capabilities (Bergmann-Lichtenstein and Brush, 2001). These valuable resources are difficult to imitate and rare, and are thus key to firm performance and sustainability (Barney, 1991). In service industries, the quality and experience of the service personnel is frequently viewed as an inimitable resource that contributes to the competitive advantage of the venture (Grönroos, 2000 and Schneider and Bowen, 1995). Focusing on small ventures in the tourism industry, often regarded the world's largest industry (WTTC, 1996), it is argued that ability to utilize and control valuable and industry-specific resources, while designing the offered tourist service and experience, may secure the future of the venture in the long run. Although the number of small tourism ventures has been accelerating rapidly, no attempts have been made to explore the unique resources used during the entrepreneurial process and to examine their impact on performance (Olsen and Roper, 1998). This is long overdue, given the scale and importance of small tourism ventures in most countries (Getz and Carlsen, 2000).
The decision to invest or to be involved in a specific type of venture within an industry determines the nature of resources required to achieve sustainability (Barney, 1997). Thus, the premise of this paper is that the decision to invest in tourism is associated with the accumulation and utilization of particular resources. Moreover, this industry presents special environmental and managerial challenges for entrepreneurs, such as seasonality, which have a direct impact on the profitability and long-term sustainability of the venture (Getz and Carlsen, 2000). Additionally, the small tourism ventures in many countries such as Israel are highly susceptible to geopolitical conflicts that frequently impact on their performance (Pizam and Mansfeld, 1996). Such conditions reinforce the need for accumulation of valuable resources for gaining sustainability.
Given the recognized need for data-based and integrative process studies of the steps leading to venture creation and sustainable growth (Bhave, 1994), the purpose of the current study is to conduct an empirical examination of the contribution of various resource accumulation in the entrepreneurial process to venture performance. After presenting the theoretical background and describing the proposed research model of resource accumulation in the entrepreneurial process, the general research hypothesis is presented. Then, each phase of resource accumulation and its contribution to performance is described. Finally, the research findings are discussed, including their theoretical and practical implications.
As noted earlier, the study's general research hypothesis stipulated that the human capital of the entrepreneur, the type of venture, attractiveness of venture location, existence of a written business plan, level of planning and design, and use of external financial and advisory support positively affect the venture performance. In testing the hypothesis, multivariate examinations were performed by means of hierarchal regression analyses to assess the contribution of each of the independent variables to explaining the variance of each of the performance variables as indicated by the general research hypothesis (Table 3). Descriptive statistics of research variables and Pearson correlation coefficients between independent variables and performance were also performed (Table 2).
