Abstract:

With the and reform of technology, the new ventures based on new technology are becoming the main support for the economy development. While, there are more challenges and opportunities the new ventures should deal with. In this case, the entrepreneurial orientation plays a very important role. Entrepreneurship is a kind of essential strategy. Since the lack of resource in new ventures, the entrepreneurial orientation M&A behaviors are becoming the main way to implement the strategy for pursuing the new technologies and the new business. Even though many factors may influence the strategy decision-making, considering the characteristics of new ventures, the composition of board and technology trait should be paid adequate attention.
In order to figure out the effect and mechanism of board and technology on entrepreneurial orientation in newventures,the paper selected the companies listed Chi-Next before December 2012 as the samples. The total number of samples is 371, and the main data are from the company reports. Due to the lag in decision-making, the paper collected the data of M&A till the end of December 2015. Then, this paper used the regression analysis to do exam the hypothesis.
As there are two main forces in the new venture’s board- the founders and the investors, the conflict and complement resource will both make effect on the strategy decision-making. From the composition of board, this paper tried to find out the impact of openness of new venture founders and participation of institutional investors on the entrepreneurial orientation strategy decision. The founder of new venture is the representative of the founding team, most of whom is the technological professionalism and has the dual status of chairman and general manager. His personal characteristics will affect the strategic decision-making of the company. So, one of the main research question is whether the openness of founder can influence the new ventures entrepreneurial orientation decision. Meanwhile, the founding team of new ventures has homogeneity in education, industry experience, and functional majors, which is relatively weak in human resources and management knowledge. While, institutional investors can bring key resources such as capital and information to supervise and guide the strategic decision-making of the enterprise by possessing higher investment levels and capital operating capabilities. Unlike founding shareholders, institutional investors pay more attention to short-term interest. And the difference of interest appeal will also cause conflict that will be harmful to the strategy decision-making. Therefore, the second research question is how the institutional investor affect on the new ventures entrepreneurial orientation decision, and if there is the interaction effect with the founder’s openness. Further more, the technology is the basis for enterprises to formulate effective competition strategies. The development of high-tech new ventures depends on technological trajectory. New venture on different technological trajectories have enormous differences in terms of technology sources and technology strategies, which determines the possibility of entrepreneurial orientation strategy implement. So, verifying the different results of board composition on entrepreneurial orientation strategy in new venture based on the technological trajectory in also one of the main research question.
The results showed that: the openness of new venture’s founder had a positive relationship with the entrepreneurial orientation strategy, and the participation of institutional investors also had a positive relationship with the entrepreneurial orientation strategy. Further more, there was a complementary effect with the openness of founder and participate of institutional investors on the entrepreneurial orientation strategy. That’s because the founder with open characteristics has a more open vision and prefers to explore new technologies and products, which can promote entrepreneurial M&A. The institutional investors in the new venture have strong capital operation ability and short-term interest pursuit motivation, and can assist the founders to make entrepreneurial M&A decisions.
While, the effects above had significant differences under different technological trajectories. The openness of funder always had positive influence on the entrepreneurial orientation strategy among the five technological trajectories. That’s mean no matter in which technological trajectory, the openness of founder is a significant factor that push the new venture pursue the entrepreneurial orientation strategy. But the influence of institutional investor and the interaction effect showed the differences. In the supplier-led and scale-intensive enterprises, the institutional investor participation and the interaction was not significant. That’s for the technology acquisition mode of enterprises determines that the existence of institutional investors has little effect on the entrepreneurial oriented M&A; While, there was a significant complementary effect in the information-intensive and specialized supplier firms. Institutional investors can offer companies more opportunities for M&A; In science-based firms, the participation of institutional investor had a negative impact on entrepreneurial orientation strategy decision. The decision of enterprise entrepreneurship oriented M&A is dominated by founders with strong technical background and professional level.
Based on resource theory, technological trajectory theory and strategic theory, this paper put forward the mechanism of influence of founders and institutional investors of new ventures on the decision direction. It also tested the effect of the technological trajectory of the new ventures on the above effects, which has the following theoretical and practical contributions:
This paper used exploratory M&A decision to measure the entrepreneurial strategic behavior to enrich the corporate strategic theory. And this paper explored the motivation of strategic decision of new ventures with discussing the influencing factors and effects from the perspective of founder openness and institutional investor participation. Moreover, this paper involved in the technology trajectory to illustrate the dependence of new ventures’ development strategy on the technology source and technology strategy. The research of this paper also has important enlightenment for practice and policy making. For new ventures, the fierce competition environment and competition pressure led them tend to adopt the entrepreneurial approach to enter new industries and occupy new markets as soon as possible, and the openness of founder played a positive influence. However, many problems such as entrepreneurs’ blind self-confidence and lack of experience in capital operations resulted in a large number of new ventures ended in failure. The role of institutional investors introduced by new enterprises in enterprises is to promote entrepreneurial decision-making rather than to supervise and balance the decision-making power. Therefore, new ventures should try to involve various types of shareholders to improve governance mechanisms and increase their decision-making capabilities. Finally, the technological trajectory combines the technological direction and strategic choice of the new ventures, which reveals that the new ventures need to depend on the technological trajectory when making strategic decisions.

Key words: entrepreneurial orientation, openness, institutional investors, complementary effect