Portfolio Entrepreneurship and Resource Orchestration

• Author: Caroline Baert,Miguel Meuleman,Mike Wright,Marion Debruyne
• Date: 01 December 2016
• DOI: http://doi.org/10.1002/sej.1227
• Published date: 01 December 2016

PORTFOLIO ENTREPRENEURSHI P AND

RESOURCE ORCHESTRATION

CAROLINE BAERT,

1

MIGUEL MEULEMAN,

1,2

* MARION DEBRUYNE,

1

and MIKE WRIGHT

2,3

1

Vlerick Business School, Ghent, Belgium

2

Imperial College Business School, Imperial College London, London, U.K.

3

Ghent University, Ghent, Belgium

Research summary:This study examines the role of resource orchestration for the

exploration and exploitation of opportunities through portfolio entrepreneurship.

Adopting a single-case study approach, we identify eight distinctive resource

orchestration subprocesses that we group into three aggregate resource orchestration

processes that enable the development and exploitation of a set of resources and

capabilitiesacross a portfolio of ventures. Our findingsextend the literature on enduring

entrepreneurship by building theory on how resource orchestration across a portfolio of

ventures facilitates the emergence of synergies when exploring and exploiting

opportunities.

Managerial summary:This study examines the processesthrough which an entrepreneur

structures and rearranges resources and capabilities across multiple firms as he/she

grows a portfolio of firms to engage in the exploration and exploitation of market

opportunities. Entrepreneurs can obtain insights for building their businesses from the

eight processes we identify; these processes allow entrepreneurs to develop synergies as

they create and put to use a set of resources and capabilities across their businesses.

Through these synergies, entrepreneurs can share, transform, and harmonize resources

and capabilities across their firms. This can enable them to continuously and

simultaneously explore and exploit market opportunities, which ultimately facilitates the

sustainability of their businesses. Copyright © 2016 Strategic Management Society.

INTRODUCTION

Entrepreneurship involves identifying and exploiting

opportunities ina setting characterized by uncertainty

(Shane and Venkataraman, 2000). The strategic

entrepreneurship perspective has stressed the need to

focus on how firms create change by exploring

opportunities in the external environment while at

the same time exp loiting those opportunities to sustain

value creation across time (Hitt et al., 2001, 2011).

Some firms and individuals consistently engage in

high levels of entrepreneurial behavior through

constant renewal and repeated acts of entrepreneurial

activity such that entrepreneurship endures across

time and systems. A key question that arises then is

what processesand organizational practiceshelp firms

and individuals achieve enduring entrepreneurship?

The developmentof a group of new ventures in the

context of portfolio entrepreneurship provides an

opportunity to investigate these processes and

organizational practices. Portfolio entrepreneurship

has proven to be a valuable entrepreneurial

Keywords: portfolio entrepreneur; resource orchestration;

exploration/exploitation; enduring entrepreneurship; strategic

entrepreneurship

*Correspondence to: Miguel Meuleman, Vlerick Business

School, Reep 1, 9000 Ghent, Belgium. E-mail: Miguel.

Meuleman@vlerick.com.

Strategic Entrepreneurs hip Journal

Strat. EntrepreneurshipJ. 10:346–370 (2016)

Published online18 October 2016 in Wiley Online Library(wileyonlinelibrary.com).DOI: 10.1002/sej

Copyright © 2016 Strategic Management Society

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development model (Carter and Ram, 2003; Lechner

and Leyronas, 2009). Portfolio entrepreneurs

simultaneously hold ownership stakes in two or more

independent ventures that have either been

established, purchased, and/or inherited (Westhead

and Wright, 1998). The characteristics of portfolio

entrepreneursand their motivations to engage in small

business group formation have been researched

extensively (Iacobucci, 2002; Iacobucci and Rosa,

2010; Ucbasaran et al., 2008; Ucbasaran, Westhead,

and Wright, 2009). However, the microprocesses by

which portfolio entrepreneurs obtain and leverage

resources and capabilities across a portfolio of

ventures to exploit new opportunities and engage in

enduring entrepreneurship in such a setting remain a

black box.

Resource orchestration theory h as recently been

advanced to address the previous neglect of the

processes by which managers accumulate, combine,

and exploit resources to support current opportunities

while developing future opportunities to achieve a

competitive advantage (Sirmon and Hitt, 2003).

Resource orchestration theory suggests that it is the

combination of resources, capabilities, and

managerial action that ultimately results in superior

firm performance (Chadwick, Super, and Kwon,

2015; Helfat et al., 2007; Sirmon, Hitt, and Ireland,

2007; Sirmon et al., 2011). However, we still lack

detailed insights into how firms orchestrate resources

in dynamic environments to facilitate the

implementation of firm-level and corporate-level

strategies to sustain enduring entrepreneurship

(Sirmon et al., 2011). Additionally, extant research

has primarily examined how managers orchestrate

resources within a single firm to develop capabilities

and sources of co mpetitive advan tage. A separate

important and yet unexamined issue concerns how

resources might be orchestrated across a portfolio of

ventures to develop portfolio-level capabilities and

synergies when pursuing opportunities.

We build on this prior work to address an

important gap in understanding the behavior of

portfolio entrepreneurs and, by doing so, shed new

light on resource orchestration processes across a

portfolio of ventures that help sustain entrepreneurial

activity. Accordi ngly, we address the following

research questions: (1)What specific processes of

resource orchestration across a portfolio of ventures

are aimed at exploring a nd exploiting new

opportunities?; and (2)How do these processes

develop over time to facilitate enduring

entrepreneurship?

Following previous studies on knowledge and

capability development (Cope, 2011; Deakins and

Freel, 1998), we use a single interpretive case study

approach. Throughan iterative process involving rich

narrative accounts of both successful and failed

activities of a portfolio entrepreneur in the digital

web industry, we identify eight distinctive resource

orchestration subprocesses across the entrepreneur’s

portfolio of ventures; these subprocesses enable the

exploration and exploitation of new opportunities.

We group these into three aggregate resource

orchestration processes new to resource orchestration

theory—sharing,transforming,andharmonizing.In

essence, resource orchestration across a portfolio of

ventures enables the portfolio entrepreneur to create

and exploit synergies in the pursuit of new

opportunities over time.

We contribute to theory development in several

ways. First, we add to the enduring entrepreneurship

literature by building theory on how resource

orchestration across a portfolio of ventures may

facilitate the emergence of synergies when exploring

and exploiting new opportunities. Second, in doing

so, we respond to the general call by Sirmon et al.

(2011) to uncover new processes underlying resource

orchestration and capability development to support

an entrepreneurial strategy in dynamic environments.

Third, examining portfolio entrepreneurs enables us

to extend previous studies by providing a more fine-

grained analysis of the distinctive constructs

associated with the resource orchestration processes

across a group of ventures that have hitherto been

largely neglected (Sirmon et al., 2011). As such, we

contribute by begi nning to identify s ome boundary

conditions of Sirmon et al.’s (2007) general

framework on resource orchestration and, more

generally, add to the understanding of heterogeneous

resource positions between firms (Maritan and

Peteraf, 2011). Our findings suggest that simply

extending existing resource orchestration theory to

across firms/portfolio entrepreneurship contexts

would miss important distinctive mechanisms in the

resource orchestration process.

THEORETICAL BACKGROUND

The strategicentrepreneurship perspective stresses the

importance of resource orchestration practices to

support the simultaneous explorationand exploitation

of opportunities to sustain firm performance. Merely

Portfolio Entrepreneurship and Resource Orchestration 347

Copyright© 2016 Strategic Management Society Strat. EntrepreneurshipJ. 10:346–370 (2016)

DOI: 10.1002/sej