Small Business Management: Bricolage

Parallel bricolage (survive)

Allows firms to survive with the bare minimum of conventional resources something from nothing

Neo-Institutional

An enviornment of objectified normative rules strongly constrains an organization. Essentially, think outside the box and rules.

Mike Matthews Multiplex Ties

When he tried to befriend and mentor his mechanics "After a number of bail bond payments, I decided to take a 'strictly business' attitude toward my employees (He would also never enter partnerships with relatives or close friends ever again)

Who founded Bricolage?

Levi Strauss

Stevenson

Entreprenurial focus on pursuit of opportunity.

Multiplex Ties

Network ties that helped to sustain parallel bricolage

True or False? Most results of bricolage that were observed were reusable

False Most of them were one-time applications/solutions that created no reusable design. But on occasion, bricolage represented valuable product or service innovations (Jim Roscoe cable-testing) Biggs - cleanup of old mining properties

True or False? Most organizational entrepreneurship starts out with a wide array of employees

False No employees or only a family member to share the work

True or False If a firm is funded by a capital market, they're typically well off.

False They find it difficult to attract specific human, financial, or other resources when needed Many entrepreneurs embrace or pursue new challenges despite their inability to track new resources.

Second

Firms have tried and failed in their resource-seeking activities Instead take paths that avoid the new challenges (downsizing/disbanding)

Third

Firms in prenurious environment sometimes engage in bricolage (applying combinations of the resources at hand to new problems and opportunities.

What did Penrose argue?

Firms possessing very similar material and human resource inputs may offer substantially different sets of services to the market because of differences in their ability to grasp possible uses and combinations from those inputs. Not all minds think alike (essentially)

Characteristics of parallel bricolage for resources

Firms that engaged in parallel bricolage moved swiftly from project to project as parts became available and as interest fluctuated.

Bricolage and amateur skills

It's a potent mechanism for permitting employees to make use of a variety of amateur skills and resources at hand to them and for generating solutions that their jobs would otherwise be unlikely to elicit from them.

Kogut and Zander

Knowledge can be created onlyl as combinations of what is already known

Bricolage

Making do with what is at hand Explained many of the behaviors we observed in small firms that were able to create something from nothing (exploiting physical, social, or institutional inputs that other firms rejected or ignored

Grayson Hill Farms (Tim Grayson)

Mammoth sink holes due to methane He got a generator and crudely retrofitted ti to burn the methane. His bricolage produced electricity. greenhouse for hydroponic tomatoes

Is funding through capital markets available to most firms?

No Some firms in high-growth sectors are able to fund entrepreneurial activities through the venture and public capital markets, they aren't widely available to new firms

Weick

The enactment of limitations constraints from the "failure to act" based on "avoidance of testing"

Selective Bricolage

They escaped the self-reinforcing dynamics of the parallel bricolage

Resources are independent or dependent to the organization.

They remain independent Resources remain objective and definable independent of the specific organizations ennbedded in a resource environment. Resources are what they are, and organizations either have the resources they need or they do not.

True or False? Most organizational entrepreneurship starts out with severe constraints

True The majority of new firms begin with very limited resources, generally less tan $5000 (U.S. Department of Commerce)

Dig's most remarkable success

When he succeeded in extracting and selling of carbon from a huge toxic tailing pond. Dig wanted to start a fish farm in that toxic pond. This attracted national attention and netted Dig a high-profile environmental award. (Dig secured a contract to use his pristine lake to raise trout.

Generally, resources at hand are acquired for ______

cheaply or for free. Often because others judge them to be useless or substandard Garud and Karnoe made a wind turbine out of scrap metal. (American Engineers purchased new materials specifically for a wind turbine)

Testing and Rejecting Institutional Constraints

fundamental to the process of bricolage

By refusing to enact limitations reflecting external rules and standards, bricolage created space for these firms to "_________" solutions that would otherwise seem impermissible

get away with

How did Penrose describe the resource environment to firms?

idiosyncratic they are what the individual sees them as (wide scope for judgment), the resource environment is neither as powerful nor as constraining as it might appear.

Bricoloage provides survival advantages during periods of

low resource stocks

9 of the 25 firms they studied exhibited

no discernible evidence of bricoloage Paul Hatchett's Auto Tech would not make repair unless they were confident of being able to do it the right way No bricolage, standard procedures

Bricolage is an important means of counteracting the ______

organizational tendency to enact limitations without testing them

No firm ever __________ the complete range of services available from any resource

perceives

Firms with similar organizational features will _______ While firms that are diverse organizationally will ________

stagnate grow

IN summary

the objective environment affects an organization's outcomes. Even when it doesn't affect the organization's behavior

Prenumerous Environment

An environment that presents new challenges to a firm's prospective. Whether opportunities or problems, without providing new resources.

Three theories that construed resource scarcity of the enviornment

1. Population Ecology 2. Objectified Normative Rules 3. Research Dependence studies

How would a firm solve the lack of resources constraint? 2 choices

1. They could engage in resource-seeking attempts to ease constraints. Many entrepreneurial firms do this generate debt or equity inflows for their firms 2. Escape from the need to accomplish challenging tasks with the limited resources at hand. (think of another approach)

Jason Bond

Before Wireless telecommunications Old software forced clerks to manually adjust computer billing and accounting files for customers (made it complex) Jason combined his firm's software with a "homegrown" spreadsheet. His self-taught programming skills allowed him to construct a program that avoids investing any money in its billing system. Saved thousands of dollars.

Terry Starr

Has a great deal of equipment knowledge of the content of the troves was a primary factor

Parallel Bricolage

Multiple ongoing projects relying on bricolage most complex pattern

Results of the bricolage study

Shows that firms engaged in entrepreneurial bricolage often create something from nothing and that such bricolage is an engine driving the enactment of resource environments

Enhancement of the definition of bricolage

Social construction of resource environments can be influential as the objective limitations of the environments in determining behaviors. Extracting services from inputs can deviate.

3 characteristics for bricolage based on Penrose

1. Each firm is unique in its idiosyncratic relation to its resource environment (each firm views materials in a completely different way to its environment) Different environment = different points of view Different viewpoints = different services 2. Substantial difference among firms in their ability to survive/prosper giving similar resource constraints each firm will have different services and combinations of services from similar objective resources 3. The same resource may be worthless to one firm but valuable to another

5 Environmental Domains in which bricolage was used to create something from nothing

1. Physical - By imbuing forgotten, discarded, worn or presumed "single-application" materials with new use value, bricolage turns valueless or even negatively valued resources into valuable mate rials. 2. Labor - By involving customers, suppliers, and hangers-on in providing work on projects, bricolage sometimes creates labor inputs 3. Skills - By permitting and encouraging the use of amateur and self-taught skills (electronics repair, sol- dering, road work, etc.) that would otherwise go unapplied, bricoiage creates useful ser- vices. 4. Customer/Market - By providing products or services that would otherwise be unavailable (housing, cars, billing system, etc.) to customers (because of poverty, thriftiness, or lack of availability), bricolage creates products and markets where none existed. 5. Institutional and Regulatory Environment - By refusing to enact limitations with regard to many "standards" and regulations, and by actively trying things in a variety of areas in which entrepreneurs either do not know the rules or do not see them as constraining, bricolage creates space to "get away with" solu- tfons that would otherwise seem impermissible.

3 input domains of bricolage

1. material 2. skills 3. labor

Jim Jarvis's Cycle Tech

2-3 hours before closing, members of the firm's multiplex network would join up with beers. Work continued, jokes/gossip and information were exchanged Customers would help with unfinished work bikes were bought and sold spare parts located disputes mediated and informal rides planned "beer time = turns into a bar without stools. Blurred the distinct interaction between customer, owner, employee, and supplier as well. Cycle Tech was a cultural entity

Study

40 independent local businesses 16 fit the bricolage 40 firms did not appear to engage in bricolage, but was similar in size and was capital intensive

Compton Rentals

Bricolage radically started a business, but rejected once the business was established. Dave Compton bought an ailing trailer park (troublesome clientèle) and a disaster. Taking advantage of an environment in which local codes were seldom enforced, Compton and his employee made do by practicing the same sorts of scavenging, coaxing, and bricolage favored by the prior owners. Slowly improving the park's aesthetics and clientèle. The sheriff doesn't ask to see the title to the trailer, only the moving permit. When cash improved, he Compton abondoned bricolage of a business model with higher costs but with higher rents.

Labor inputs

Broad self-taught skills. Not many of their employees had formal education in any of the trades or professions they practiced. Jim Roscoe spent time doing carpentry when he wasn't repairing TVs. He learned auto repair by watching shade-tree mechanics as a youth. (Self-Taught skills that weren't learned in any educational institution) HE's knee deep in shit in the basement, fixing a broken sewer line

Bricolage encourages

Creativity Improvisation Social network skills Bricolage relies heavily on trial and error and tolerance for setbacks (creates situations in which out-of-the-ordinary behavior can result in visible, out-of-the-ordinary results.

Bricolage and Improvisation

Cunha Improvisation - The deliverate and substantive fusion of the design and execution of a novel production Bricolage often appeared as the cause of improvisation (Moran and Ghoshal)

Multiplex Ties (friend)

Friends and customers would frequently contribute labor or expertise to projects (located scavenging opportunities, acted as brokers for physical inputs) Suppliers frequently became customers and vice versa.

Green example of bricolage (car)

Green substituted a length exhaust pipe for a fouled catalytic converter. Saving the customer several hundred dollars while increasing air pollution and creating the risk of heavy fines.

George Love Multiplex Ties

Half of the houses he had acquired would have otherwise been torn down. He sold out old houses inexpensively to people who would otherwise simply not have been part of the housing market. He extended credit to buyers and provided inexpensive fixes for inevitable problems (using parts from his resource trove to fix hourses)

Narrow Selective Vricolage

Helped the firms to grow by allowing resources to go to areas that senior managers viewed as strategic 3 out of 4 cases were successful

Rege Cano

His cleaning business didn't face the same liability issues that the auto repair has. Yet he relies on standard equipment and methods. We found nothing but standard methods and equipment

Jim Roscoe

His electronic repair service wasn't a success. Coal mines have miles of high-voltage underground power lines that became damaged from movement. Combine old components into a useful tool for technicians who needed to troubleshoot underground cables. Teamed up with his friend who welded Bricolage provided temporary source of income but didn't alter his business activity in any substantial way.

Resource-Based View

How firms may gain advantages that allow them to appropriate the value they have created

Bricolage social psychology

Objectified and constraining social structure Bricolage = positive identity Members requently expressed some pride, in the form of disdain for other firms unable to make do with the resources at hand.

Resource Dependence

Patterned scarcity of critical resources: 1. shapes 2. organizes 3. industry helps to shape these areas.

Resources to Penrose

Physical objects and people Services are "the contributions these resources can make to the productive operations of the firm" Resource = bundle of possible services

selected bricolage

Support or drive firm growth varied considerably (parallel bricolage0 selective bricolage = there was no single organizational or operational pattern

Bricolage typically appeared to involve a general awareness of existing practices and norms and a conscious willingness to _______ them.

abrogate evade

Levi Strauss's rules for bricolage

always make to with whatever is at hand"

In a very crowded and competitive market, a decline in resources might have an overall positive effect for

bricolage

Combination of resources for new purposes Bricolage

combination and reuse of resources for different applications than those for which they were originally intended or used. Neolithic tribes adopted the symbols of neighboring tribes but combined them in a new ways to represent new meanings. Danish engineers combined resources to solve problems in the wind turbine industry

Biggs Dig

combined ravaged/abandoned mining properties with surplus mining equipment to generate an impressive variety of services fuel sales/delivery/aquaculture/farming Created all these things from virtually nothing (bricolage)

Bricolage shaped both what seemed to be _____ and ______

desirable and feasible The bricoleurs in our study did not view opportunities as objective and external to the resources and activities of the firm. Discovering opportunities and enacting resources were often one and the same.

Parallel bricolage

external rules and standards represented real constraints for businesses. Jim Roscoe disregarded credentials, codes, and intellectual property law Roger Barnfield = burn anything except water in his furnace Didn't care about the emission standards and the hazards of burning different materials (if I can see through the stack gases, I'm probably OK)

Population Ecology

factors associated with environmental munificence—largely unmediated by variations in firms' ability to respond—strongly affect organizational births and deaths. Across evolutionary perspectives more generally (Campbell, 1969), patterns of resource scarcity create selec tion environments that determine patterns of firm survival Essentially, patterns of resource scarcity based on the environment that determines the survival of the person (in this case, the firm)