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)