E value of planning in new venture creation

Journal of Business Venturing 22 (2007) 782 – 807

Uncovering the value of planning in new venture creation: A process and contingency perspective
Marc Gruber
Ecole Polytechnique Fédérale de Lausanne, College of Management of Technology, Chair of Entrepreneurship and Technology Commercialization, Odyssea 2.02, Station 5, CH-1015 Lausanne, Switzerland
Received 1 July 2005; received in revised form 1 July 2006; accepted 1 July 2006

Abstract
Researchers are engaged in a major debate on the value of business planning in new venture creation. This study suggests a potential resolution by applying a process and contingency perspective.
The results indicate that planning is beneficial, yet planning processes need to be governed by different planning regimes depending on the type of founding environment. In highly dynamic environments, entrepreneurs will get most value from planning when they focus on select planning activities, and speed up the planning task. In less dynamic environments, they are better of pursuing a munificent approach to planning. The analysis thus reveals a major component of theorization on business planning that has been neglected in previous discussions. As for entrepreneurship teaching and practice, the findings suggest the importance of an adaptive, “toolkit” approach to business planning.
Hypotheses were developed based on information-processing and decision-making theory and were tested with an ordered probit analysis on a sample of 100 start-ups backed by venture capital.
© 2006 Elsevier Inc. All rights reserved.
Keywords: Business planning; Planning regimes; Opportunity exploitation; Venture creation process; Toolkit approach 1. Executive summary
The field of entrepreneurship is engaged in an important debate on the value of business planning (Bhidé, 2000; Delmar and Shane, 2003). Whereas one group of researchers views
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