View in EDS HTML Full Text PDF Full Text

Amundsen versus Scott: are growth paths related to firm performance?

Saved in:
Bibliographic Details
Authors: Coad, Alex1 (AUTHOR) alex.coad@waseda.jp, Daunfeldt, Sven-Olov2,3 (AUTHOR), Halvarsson, Daniel4 (AUTHOR)
Source: Small Business Economics. Aug2022, Vol. 59 Issue 2, p593-610. 18p. 9 Charts, 3 Graphs.
Subject Terms: *Organizational performance, *Sales statistics, *Growth rate, Weather, Death rate
People: Scott, Robert Falcon, 1868-1912
Abstract: In the race to the South Pole, Roald Amundsen's expedition covered an equal distance each day, irrespective of weather conditions, while Scott's pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. In the context of firm growth, the Amundsen hypothesis suggests that smoother growth paths are associated with better performance in subsequent periods. We develop a new method to investigate how firms' sales growth deviates from their long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but also with higher exit rates. However, this result is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival, providing nuanced support for the Amundsen hypothesis. Plain English Summary: In the race to the South Pole, Roald Amundsen and Robert Falcon Scott adopted different strategies that resulted in victory for Amundsen and death for Scott. Amundsen's approach was to consistently pace his team (to cover a fixed and equal distance each day), while Scott sought to cover as much distance as possible each day. In the context of firm growth, this relates to the tradeoff between steady growth (low volatility in growth rates) and growing as fast as possible in each period (potentially leading to high volatility in growth rates). We develop a new set of indicators for quantifying firms' growth paths, observing that growth path volatility in general is associated with higher growth of sales and profits, but also with higher death rates. This result is driven by firms with negative sales growth, however. Like Amundsen, it seems beneficial for firms with positive sales growth to pace themselves to increase their subsequent growth and likelihood of survival. [ABSTRACT FROM AUTHOR]
Database: Entrepreneurial Studies Source
Full text is not displayed to guests.
FullText Links:
  – Type: pdflink
Text:
  Availability: 1
Header DbId: ent
DbLabel: Entrepreneurial Studies Source
An: 157911640
AccessLevel: 6
PubType: Academic Journal
PubTypeId: academicJournal
PreciseRelevancyScore: 0
IllustrationInfo
Items – Name: Author
  Label: Authors
  Group: Au
  Data: <searchLink fieldCode="AR" term="%22Coad%2C+Alex%22">Coad, Alex</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> alex.coad@waseda.jp</i><br /><searchLink fieldCode="AR" term="%22Daunfeldt%2C+Sven-Olov%22">Daunfeldt, Sven-Olov</searchLink><relatesTo>2,3</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Halvarsson%2C+Daniel%22">Halvarsson, Daniel</searchLink><relatesTo>4</relatesTo> (AUTHOR)
– Name: TitleSource
  Label: Source
  Group: Src
  Data: <searchLink fieldCode="JN" term="%22Small+Business+Economics%22">Small Business Economics</searchLink>. Aug2022, Vol. 59 Issue 2, p593-610. 18p. 9 Charts, 3 Graphs.
– Name: Subject
  Label: Subject Terms
  Group: Su
  Data: *<searchLink fieldCode="DE" term="%22Organizational+performance%22">Organizational performance</searchLink><br />*<searchLink fieldCode="DE" term="%22Sales+statistics%22">Sales statistics</searchLink><br />*<searchLink fieldCode="DE" term="%22Growth+rate%22">Growth rate</searchLink><br /><searchLink fieldCode="DE" term="%22Weather%22">Weather</searchLink><br /><searchLink fieldCode="DE" term="%22Death+rate%22">Death rate</searchLink>
– Name: SubjectPerson
  Label: People
  Group: Su
  Data: <searchLink fieldCode="PE" term="%22Scott%2C+Robert+Falcon%2C+1868-1912%22">Scott, Robert Falcon, 1868-1912</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: In the race to the South Pole, Roald Amundsen's expedition covered an equal distance each day, irrespective of weather conditions, while Scott's pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. In the context of firm growth, the Amundsen hypothesis suggests that smoother growth paths are associated with better performance in subsequent periods. We develop a new method to investigate how firms' sales growth deviates from their long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but also with higher exit rates. However, this result is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival, providing nuanced support for the Amundsen hypothesis. Plain English Summary: In the race to the South Pole, Roald Amundsen and Robert Falcon Scott adopted different strategies that resulted in victory for Amundsen and death for Scott. Amundsen's approach was to consistently pace his team (to cover a fixed and equal distance each day), while Scott sought to cover as much distance as possible each day. In the context of firm growth, this relates to the tradeoff between steady growth (low volatility in growth rates) and growing as fast as possible in each period (potentially leading to high volatility in growth rates). We develop a new set of indicators for quantifying firms' growth paths, observing that growth path volatility in general is associated with higher growth of sales and profits, but also with higher death rates. This result is driven by firms with negative sales growth, however. Like Amundsen, it seems beneficial for firms with positive sales growth to pace themselves to increase their subsequent growth and likelihood of survival. [ABSTRACT FROM AUTHOR]
PLink https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=ent&AN=157911640
RecordInfo BibRecord:
  BibEntity:
    Identifiers:
      – Type: doi
        Value: 10.1007/s11187-021-00552-y
    Languages:
      – Code: eng
        Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 18
        StartPage: 593
    Subjects:
      – SubjectFull: Organizational performance
        Type: general
      – SubjectFull: Sales statistics
        Type: general
      – SubjectFull: Growth rate
        Type: general
      – SubjectFull: Weather
        Type: general
      – SubjectFull: Death rate
        Type: general
      – SubjectFull: Scott, Robert Falcon, 1868-1912
        Type: general
    Titles:
      – TitleFull: Amundsen versus Scott: are growth paths related to firm performance?
        Type: main
  BibRelationships:
    HasContributorRelationships:
      – PersonEntity:
          Name:
            NameFull: Coad, Alex
      – PersonEntity:
          Name:
            NameFull: Daunfeldt, Sven-Olov
      – PersonEntity:
          Name:
            NameFull: Halvarsson, Daniel
    IsPartOfRelationships:
      – BibEntity:
          Dates:
            – D: 01
              M: 08
              Text: Aug2022
              Type: published
              Y: 2022
          Identifiers:
            – Type: issn-print
              Value: 0921898X
          Numbering:
            – Type: volume
              Value: 59
            – Type: issue
              Value: 2
          Titles:
            – TitleFull: Small Business Economics
              Type: main
ResultId 1