Working Paper | HBS Working Paper Series | 2012

Clear and Present Danger: Planning and New Venture Survival Amid Political and Civil Violence

by Shon Hiatt and Wesley Sine

Abstract

Although entrepreneurs constitute a key economic driving force for many emerging economies, they often face unstable environments due to the failure of governments to maintain civil and political order. Yet, we know very little about how environments characterized by weak institutions and high levels of political and civil violence directly affect new venture survival. Moreover, it is unclear whether standard theories about organizational strategy, such as planning, hold true in such environments. Building upon the institution-based view of strategy and past research on planning, we explore these issues using a sample of 730 new ventures in Colombia from 1997 to 2001. We find that political and civil violence decreases firm survival, increases the benefits of incremental planning, and decreases the benefits of comprehensive planning.

Keywords: Entrepreneurship; Business Startups; Developing Countries and Economies; Government and Politics; Crime and Corruption; Balance and Stability; Strategic Planning;

Citation:

Hiatt, Shon, and Wesley Sine. "Clear and Present Danger: Planning and New Venture Survival Amid Political and Civil Violence." Harvard Business School Working Paper, No. 12-086, March 2012.