Our TOPIC for the Term paper is

IMPACT OF ENVIRONMENT ON NEW VENTURE

ARTICLE 1 Clear and Present Danger: Planning and New Venture Survival amid Political and Civil Violence
In past years many studies have taken for granted the role of state institutions in providing stable predictable environment in which new firms are founded and none have examined how such environment affects strategic plannings by new ventures. Many countries in the world like Pakistan, Libya, Sudan, Iran, lack political institutions of sufficient strength to ensure personal safety and public order and thereby creating environments where civil and political violence ferment. So in such situations one question arises How do weak political institutions and resulting high level of violence affect new venture survival and planning? Such environment which are characterized by the weak institutions and high level of political and civil violence are inherently unstable difficult to predict and uncertain so in these kind of environment how the planning of the organization will play their role or neutralize the affect of environment. Because in such an environment where violence is so high the investors, buyers and suppliers make overly pessimistic risk estimates and they seeks for more risk averse choices, so uncertainty from political and Civil violence can negatively affect the new venture survival by shaping entrepreneur and employee behavior. Due to these uncertainties and such environment many entrepreneur give much of their resources and time for planning process. So this research also shows that whether planning improves organizational performance in highly uncertain environments or not. There are different thoughts of researchers regarding planning of the organization in such highly unstable environment and some researchers thought that planning enable the entrepreneurs to establish routines and competencies that are align with future environmental opportunities but some scholars have argued that entrepreneurial ventures should not engage in business planning because it consumes much time and effort and its better for them to consume that time and resource in obtaining new financing , recruiting and training new employees, marketing etc. Some scholars pointed out that entrepreneurs engaged in different types and magnitudes of planning in order to deal with uncertainty ranging from incremental day to day routine planning to comprehensive forward planning. Incremental planning is an evaluative process that focuses on the congruence between the current environment and daily operating activities such as input and output levels and targets. Incremental planning simplifies the decision making process by considering only few alternatives to the status quo, restricting reference to previous plans and limiting integration with others key decisions. It entails frequently appraising operational processes in functional areas 2

such as sales, production, staffing and modifying them in accordance with changes in the environment, so high levels of incremental planning will positively affect the likely hood of survival of entrepreneurial ventures. Comprehensive Planning is focused on proactively planning at the strategic level, future oriented and often focused on making significant changes based on assumptions about future trends and organizational needs. The benefits of comprehensive planning is that it sets a clear vision for the future and establishes concrete objectives and steps and help founders evaluate the feasibility of engaging in a particular action enabling ventures to avoid costly errors. Although this planning can benefit new ventures by building new competencies and routines that increase efficiencies it is not without cost. Comprehensive planning can provide benefits to new ventures it is likely to characterize by diminishing returns because highly detailed plans require increase in resources to create behaviors and routines that accomplish long term goals but may not produce a corresponding impact on organizational performance and survival. So high level of comprehensive planning increases, new venture survival will initially increase and then decreases. Both incremental and comprehensive planning made basic assumptions about the stability and predictability of the environment and are used by organizations to deal with environmental uncertainty. But what if environment changes become unstable then incremental or comprehensive planning respond to that changes so in these conditions we can say that incremental planning will help the venture because it is reactive process focused on aligning day to day routines with current environmental changes but comprehensive planning relates to the future and future in uncertain, so it is not that much affective in violent environment. So political and civil violence will negatively moderate the effect of comprehensive planning and positively moderate the affect of incremental planning to new venture survival.

ARTICLE 2 Entrepreneurship (Evaluation), Business People (Management), Entrepreneurship (Management) & Organizational Learning (Models)
Entrepreneur knowledge is critical to building sustainable competitive advantage in the 21st century. Entrepreneurs are facing new and unexpected challenges due to increased globalization, rapid technological changes and increased competition. In such environment Entrepreneur must have increased the quality and quantity of information in order to make good decisions. Entrepreneur must process and learn from the information and use the new knowledge for improved decision making, New knowledge is the key resource for creating a sustainable competitive advantage. In todays world the competitive advantage decides the capabilities i.e expertise and skills that Entrepreneurs bring to the critical activities of the venture. Despite the importance of Entrepreneurs knowledge to new venture success, many are faced with a capability gap because of the discrepancy between their current knowledge and information that is relevant to the current business environment. To deal with this capability gap and to have the most up-to-date information for decision making, entrepreneurs must increasingly acquire information from outside the organization. One way of acquiring and using outside information is environmental scanning. Environmental scanning, defined the concept as "the way in which management gathers relevant information about events occurring outside the company in order to guide the company's future course of action."According to Pearce, Chapman, and David, (1982), environmental scanning is "the radar that informs the pilot of conditions which are likely to be encountered." Environmental scanning is also more than gathering information. It is the process of using environmental information in decision making and improving the organizational ability to deal with a rapidly changing environment. The external environment of the firm refers to both its task environment (competition, customers and suppliers), and general environment (economic, regulatory, technological, and socio-cultural factors). Until the 1970s environmental scanning existed only in few large businesses and activity was primarily adhoc, and reactive. Scanning units were criticized for being isolated from the real world of the corporation and unable to incorporate the information they gathered in planning process. During that time scanning was largely directed to a single persons specific interest. Today, information gathered through environmental scanning is critical for the organizational survival and success. Scanning focuses on the identification of emerging issues and potential pitfalls that affect the organization's future. The information helps the organization learn the influences from the environment and how to respond strategically to ensure success.

The relationship between organizations and the environment has its theoretical roots in the organizational theory literature. Two theoretical perspectives provide the theoretical foundations for the proposed model: (1) Information-based view of organizations, and (2) the concept of the adaptation of the firm to its environment. Information-based view of organizations view the external environment as a source of information and tell that changes, events and trends in the environment continually send signals and messages which the organization detects and uses to adopt the new conditions. In this way this scanning improves organizational learning and performance. Another theoretical perspective said that organizations members scan the external environment of the firm to detect the changes or events of the significance to the firm. Among all the information which is collected some are noticed and give meaning and develop a sheared interpretation of all information and formulate an appropriate response. Ultimately learning takes place when members of the organization take actions to adapt to the new environmental conditions. Due to environmental scanning entrepreneurs knowledge will increase that will lead to improve problem solving, strategic planning and new ventures success. Mostly the sources from which we gather information are business associates, friends, customers and other counter parts. Small businesses and firms will largely rely on the environmental scanning because its their need to quickly scan the environment and take appropriate strategic actions which is important for their survivals. But the large firms which are highly stable and captured big market did not largely focused on scanning as they have better know how about it. This article also presents a model that examines a) How entrepreneurs gather information from the external environment--environmental scanning behavior b) How the information gathered is interpreted to create new knowledgeInterpretation c) What organizational learning occurs--organizational learning d) How organizational learning leads to improved problem solving, strategic planning, and ultimately to entrepreneurial success. The model provides a conceptual framework to empirically test the relationship among environmental-scanning, organizational learning, and venture success.

ARTICLE 3 Entrepreneurship (Methods), Businesspeople (Methods) & New Business Enterprises (Methods)
In this article the Author tells us about the environment in which many new opportunities are explored for entrepreneur. As we all know the world is rapidly globalized and many new technologies and opportunities are emerging day by day but the main thing is that successful entrepreneur has such abilities to separate the market opportunities from the chaotic sea of ideas. The real opportunity for entrepreneur is based on product or services which creates value for an identifiable market segment. The entrepreneur needs to structure a venture in such a way as to maximize the creation of customer value. The way or means by which entrepreneur add value is innovation. Innovation is the instrument which empowers resources to new ends, thus creating value. Thus it is the need of successful entrepreneur that they must analyze any idea will represent a significant innovation in a market place or is it a simply a different way of doing the same thing. New venture has a well-focused target market segment. The viability of the new opportunity will involve an in-depth analysis of the demographics of the marketplace, the nature and behavior of the competition, the envisioned competitive advantage of the proposed venture, and the identification of the competitive vacuum which will create the opportunity. In evaluating an idea for its potential value as a business opportunity, it is important to identify all the relevant risks and to evaluate these risks in terms of: (1) the possibility that some risks may be eliminated through proactive strategies, (2) spreading the risk where possible, and (3) managing risks that are considered worth incurring. Risks include market or competitive risks, financial risks, and technical risks. The uncertainties and turbulence of the market place are the major sources of risks for the new venture which are created as a result of many factors include economy, the political/social environment, the legal environment, the technological environment of a given field, the capital markets; all of these factors contribute uncertainty to the ability of a given idea to result in a real opportunity. The effective entrepreneur must develop the means to deal with these sources of potential chaos. At the macro-level, the new venture must be acutely aware of the impacts of societal changes on the market for the new product or service. The process used has been termed environmental scanning. Environmental scanning is the process by which the various critical environmental sectors that influence the future viability of the venture are scanned, evaluated, and an assessment is developed to assist the entrepreneur in determining the impact of change of the potential venture. For the entrepreneur the purpose of the environmental scanning process is to identify what new opportunities will be created through the shifting of major environmental

forces. Through environmental scanning entrepreneur can better understand the critical forces that may alter in long term conditions in which his business operates. In order to determine if the new venture has the potential to become a viable business opportunity, an entrepreneur should be willing to undertake a vigorous opportunity evaluation process. This process reveals that products or service is dramatically superior to existing offerings in the market in ways that create value for the buyer and do not require a significant alternation of use patterns by the consumer. If the new product or service achieves these outcomes, the entrepreneur has a product or service with exceptional promise. The more that can be learned about the psychology of the market and the behavior of buyers, the more effective will be this segment of the analysis. At least two elements of the market for the product or service need to be estimated; first, the likely demand for the product and, second, the timing of that demand. Experienced entrepreneurs know that no new venture exists without risk. Some risk can be reduced through aggressive proactive strategies, while others must be "factored into" the risk/reward equation. One thing is certain, an identified risk can possibly be reduced or avoided but an unidentified risk will surely become a threat to the viability of the new venture. In order to evaluate the nature of the risk the entrepreneur must attempt to discover what new product development activities potential competitors have undertaken, their historic rate of success in new product development and marketing, their depth of financial support for these activities, and the existing advantages the competitors have in the marketplace. The new venture will have certain strengths and weaknesses that determine the capabilities of the organization. Competitive strategy involves maximizing those capabilities in a fashion that differentiates the organization from competitors. It is important, then, for the new venture to assess competition to develop a profile of major competitors. Market segmentation is essentially an identification process designed to identify sub groupings within a given product-market such that each subgroup responds differently to particular market offerings. Through segmentation, entrepreneur marketer hopes to most effectively match the market offering to the wants and needs of the market, thus improving consumer satisfaction. Market segment analysis is at the heart of micromarketing. There are two basic approaches to forming segments: (1) grouping customers together using one or more descriptive characteristics and then exploring response differences among groups or (2) grouping based on response differences and then working backwards to determine if descriptive characteristics exist which differentiate groups. Once identified, segments must then be evaluated to determine their attractiveness as a market target. Once entrepreneurs have effectively analyzed their macro environments, market opportunities, and market segments, they are then in a position to outline a marketing strategy. As a marketing strategy consists of two essential decisions: identifying a target market(s) and developing a marketing mix. The strategy should be based on six criteria:

consumer satisfaction, devotion to quality, attention to convenience, concentration on innovation, emphasis on speed, and dedication to service and customer satisfaction. After all this research when entrepreneur realize that opportunity exist in the environment is the real opportunity for their venture and it will be successful and create value then they will be successful in this globalized environment.

ARTICLE 4 How does new venture strategy matter in the environmentperformance relationship?
The significant role of new ventures (e.g., firms newly established and less than 8 years old) in economic and social development has led practitioners and researchers to search for the factors that affect new venture performance. One of the major research streams in strategic management literature suggests that new ventures strategic decisions are critical for their success because strategies represent an important means by which new ventures align their strengths and weaknesses with the opportunities and threats in the environments. New ventures are characterized as liability of newness, a high propensity to fail. This is because, compared with large and well-established firms, new ventures tend to have relatively limited resources and lack of legitimacy. Thus, they are highly dependent on environments for resources and information On the other hand; new ventures possess such capabilities as niche filling, speed, and flexibility that allow them to exploit certain industry opportunities more readily than large and established firms. There are two competing perspectives on the environmentstrategy relationship, namely, environmental determinism and environmental management. The author tries to investigate the mediating and moderating roles of new venture strategies in dealing with environment to affect performance. The author found that new venture strategies partially mediate the relationship between environmental factors and new venture performance. Two interesting points are noteworthy here. First, new venture strategies can only mediate a certain type of environmental situations but not all of them. In this study, the mediating effects of new venture strategies are primarily on perceived industry growth rather than environmental hostility. Second, not all of the strategies may play the mediating role. Results indicate that only product innovation and marketing differentiation strategies mediate the positive effect of perceived industry growth on new venture performance. Note that in a hostile environment new ventures tend to adopt marketing alliance strategy while in a high growth industry new ventures tend to use such strategies as market breadth, product innovation, and marketing differentiation. Consistent with environmental management predictions, results of the study suggest that new venture strategies moderate the relationship between environment and performance. Specifically, when new ventures emphasize product innovation, market breadth, and marketing alliance strategies, the negative impact of environmental hostility on new venture performance becomes weaker. These findings suggest that the use of product innovation may contradict the negative impact of environmental hostility on new venture performance. Considering the high technology nature of the sample, it is not surprising to find that new ventures will focus on product innovation to overcome environmental difficulties. Taken together, results of this study suggest that environmental determinism holds when the industry is perceived as high growth by technology new ventures while environmental management perspective holds when the environment is perceived as hostile. These findings are inconsistent with the literature, which suggests that organizations are proactive (an environmental management view) in the benign environment while they becomes reactive (an environmental determinism) in the hostile environment.

For example, Dutton and Jackson (1987, p. 84) proposed that when environments are perceived with more opportunities, decision makers are more likely to construct or generate an organizational response that includes taking actions directed at changing the external environment. The author of the article found through his research the roles of new venture strategies in dealing with different types of environments to affect performance. The results suggest that there may exist three types of new venture strategies having different roles in the environmentperformance relationship. The first one is the opportunity-exploration only strategy (e.g., marketing differentiation), which plays a mediating role in the environmentperformance relationship. This kind of strategy represents an aggressive posture of new ventures in market competition. The second is the threat-attenuation-only strategy (e.g., market breadth or marketing alliance), which plays a moderating role in the environmentperformance relationship. Although new ventures are entrepreneurial in essence (Gartner, 1985), the adverse impact of environmental hostility presents a great threat to them because of their limited resources. The third one is the dual-effect strategy (for both opportunity exploration and threat attenuation purposes, e.g., product innovation), which plays both the mediating and the moderating roles in the environmentperformance relationship. This study advances the literature by revealing that product innovation may contribute to new venture performance in two ways. First, new ventures may rely on product innovation to aggressively exploit growth opportunities. Second, new ventures may use product innovation to gain competitive advantage, thus buffering environmental threats to their survival and growth. The author also describes why new ventures have diversity of strategic choices. Diversity of new venture strategies results from their different roles in dealing with environments to affect performance. Further, the classification scheme of new venture strategy presented above coincides with that of organization adaptation modes to complex environments complexity reduction and complexity absorption. Each of these two modes shapes the way that firms deal with environments. On one hand, firms adapt to the environments as their decision makers perceive and interpret them; on the other hand, firms have the capacity to enact some of the perceived environments and modify them proactively. Clearly, we have extended this stream of research into new venture context. Environment is very complex so no single theory and article will explain the relationship between environment, strategy, and new venture Performance. But this article point important thing that strategies of business must be aligned with the environment and as environment changes so strategy of ventures should be change so that they will be successful in this environment.

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ARTICLE 5
FACTORS AFFECTING NEW VENTURE CREATION: A STUDY IN THE INDIAN SCENARIO
The paper is about a study conducted to understand the business set up and factors affecting the new venture creation especially in India. The study conducted revealed that there are a number of factors that influence entrepreneurship which primarily include the individual psychological factors, cultural factors and the politico economic factors. The authors carried out their research on eighty entrepreneurs from northern India with a purpose to identify the importance and impact of external environment on the entrepreneurs business. The four factors which were identified to be most crucial included infrastructural facilities, training and guidance, economic climate which included availability of finance and economic conditions, a sluggish economy hampers investments and lastly were the state regulations. The entrepreneurs were asked regarding the problems faced by them in the startup stage. Indian society tends to be dominated by a caste system. The four strata include the Brahmin, Kshatriya, Vaishya and Shudra. These have their own defined occupations with very little chance of innovation in their business. The sample chosen by the authors included among our sample 56.25 per cent of the entrepreneurs belonged to the Vaishya caste, 37.5 per cent to the Kshatryia caste while the rest came from the other groups. The study concluded that although the sector is overshadowed with entrepreneurs from the traditional communities there is a rising number of people from other segments of the society. The study revealed that among the factors which influenced the entrepreneur and his business the state regulations and lack of guidance turned to play the most viable roles. State regulations posed the most problem as government departments are the least flexible bodies when it comes to obtaining permits for import, export policies. Help regarding consultancy facilities was only extended to those people whom were known by the civil servants. Entrepreneurs also found it difficult to secure loans for themselves. Economic climate was ranked second most important factor impacting business and third by the non business community. The role of infrastructural facilities was minimal among the other dimensions. The infrastructural facilities typically required for the new venture are availability of raw material, site, water and electricity connections. It may be difficult for the entrepreneur to procure water and electricity connections, however contacts with other bureaucrats can ease the problem of obtaining licenses for such things. Moreover entrepreneurs regardless of their backgrounds faced similar difficulties regarding the success of their business. Policy makers should take steps to build a more supportive business environment as entrepreneurial business would only flourish if they received ample support from the state and concrete steps were taken to ensure the betterment of the entrepreneurship sector.

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ARTICLE 1
As our topic of term paper is Impact of environment on new ventures so our article supporting our statement. From Article 1 we learned that the countries in which environment and political conditions are uncertain which creates violence, so in such countries new ventures cannot establish because one of the fundamental requirement in which new firms are founded is that the state institutions provide stable, predictable environment to the entrepreneur. Because in uncertain environment it is usual phenomena that all the investors, suppliers and buyers are threatened about the instability of the environment so that they will try to invest in risk free ventures. So the point arises here in this article is that in such uncertain environment how should the planning for the new venture play their role to make it become feasible. Regarding this, different researchers have different thoughts, some stated that planning is not that much affective in such an environment so entrepreneur will not waste their time and resources in such activities, whereas some researchers are of the view that planning enables the entrepreneur to establish routines and competencies that are align with their future environmental opportunities. Another set of researchers pointed out that entrepreneurs are involved in different types and magnitudes of planning to deals with uncertainties. There are basically two types of planning the one is incremental and other is comprehensive. Researchers find out that incremental planning will positively affect the likely hood of survival of the entrepreneurial ventures. Whereas comprehensive planning initially will increase the new venture survival and then decreases, so it will negatively affect the likely hood of survival of the new ventures.

ARTICLE 2
The points in this article which are supporting our term paper statement are that in 21st century, entrepreneurs are facing new and unexpected challenges due to increased globalization, rapid technological changes and increased competition. So in such environment where things are going to be changed so rapidly, many new concepts are emerging and competition is very high, so entrepreneur knowledge is so vital to make good decisions. Because new knowledge is the key resource for creating the sustainable competitive advantage. To gain good quality and quantity of information in order to make good decisions, entrepreneur must increasingly require information and using that information in their decision making. So one way of acquiring and using outside information is environmental scanning. Environmental scanning is the process in which entrepreneur use information that is collected from outside the organization in decision making and improving the organizational ability to deal with rapidly changing environment. We also learned that in the past, scanning technique did not consider an important part of the organization and the information that is collected played no role in decision making. But today information gathered through environmental scanning is critical for organizational survival and success and decisions are made according to the information that is collected. Due to environmental scanning, entrepreneurs knowledge also increases and they are able to take appropriate strategic actions according to the need of environment. From this article we also learned that how 12

entrepreneur gather information, interpret it and how environmental scanning contributes in organizational learning and organizational learning leads to improve problem solving, strategic planning and ultimately to entrepreneurial success.

ARTICLE 3
With the help of this article we are able to learn that environment has many new opportunities for the entrepreneur. But the main thing is that the successful entrepreneur must have such abilities to analyze the market opportunities weather it is a real chance to avail or not. The real opportunity for any entrepreneur is based on products or services, which creates value for an identifiable market segment. The way through which entrepreneur create value is innovation. Innovation is the instrument which empowers resources to new ends thus creating value. Thus it is the need of successful entrepreneur that they will analyze any idea which will represent the significant innovation in market place or is it a simply a different way of doing the same thing. Any new opportunity will have well focused target market segment. Any idea which is potential business opportunity has relevant risk and it should evaluate this risk which will affect the new venture. So entrepreneur should be willingly taken a vigorous opportunity evaluation process in order to determine whether the new venture has the potential. After that, entrepreneur should analyze the psychology of market and behavior of buyers. At least two things needs to be estimated, 1st demand of the product and 2nd the timings of that demand. The successful entrepreneur should also know that no new venture will exist without risk, so they will make proactive strategies in order to minimize or eliminate the risk. From this article we come to know that every new venture have some strengths and weaknesses and it will depend upon the abilities of the entrepreneur to use that strength in order to make competency of the venture and get competitive advantage. So this article tells us that when entrepreneur realize the real opportunity which exist in the environment, then they will create value and become successful in this rapidly changing environment.

ARTICLE 4
This article also support our term paper statement, which describes the significant roles of new ventures in economic and social environment and in this article researchers try to find out the factors that affects new venture performance. The major finding is that new ventures strategic decisions are critical for their success because strategy of any venture should be align with their strength, weaknesses, opportunities and threats that exist in the environment. The author tries to find out the mediating and moderating roles of new venture strategies in dealing with environment to affect performance. There are two competing perspectives namely environmental determinism and environmental management. Environmental determinism said that not all the new ventures strategies can only mediate certain environmental situations and not all of them, so results indicates that product innovation and marketing differentiation strategies mediate the positive effect of perceived industry growth on new venture. Environmental management predictions results that new venture strategies moderate the relationship between environment 13

and performance. So we can assume that when a new venture emphasizes product innovation, market breath and marketing alliance strategies the negative factor of the environment that will affect the new venture performance becomes weaker. The author of this article found that new venture strategies are different in dealing with different types of environment to affect performance. There are three types of new ventures strategies, first one is opportunity exploration, second is threat attenuation and the third is dual affect strategy. From this article we also came to know that why new ventures have diversity of strategic choices. Because in order to deal with different environment to affect performance. Environment is very complex so no single theory or research tells us that which new venture strategy is align with the environment but the interesting point in this article is that the strategies of business must be align with the environment and when environment changes, strategies should be changed in order to become successful in this world.

ARTICLE 5
This paper relates with our course in this way that it discusses the factors that play role in an entrepreneurs business as the paper sought out to find those environmental factors which hamper the success of an entrepreneurial business. This is in congruence with our topic which is the Impact of environment on new ventures. The study was conducted with two purposes firstly to find whether in an Indian society entrepreneurs come from traditional business backgrounds or no business backgrounds and secondly to ascertain what type of factors are troublesome for the entrepreneurs. The study conducted revealed that the external environment of the enterprise is impacted by Infra-structural Facilities, Economic Climate, Training and Guidance Facilities and State Regulation. Among these state regulation and lack of guidance and training are crucial for a new business. Economic climate happens to be the second most important factor influencing the new venture. Moreover securing of permits and loans is also an issue that poses problems for entrepreneurs. As far as the startup stage is concerned the inadequacy of infrastructure is not something which restricts the success of an entrepreneurial business. To know how the environment affects the entrepreneur is very essential as this might help in formulating strategies to cope with the environmental strategies. This study identified the environmental factors so that entrepreneurs keep them in mind while doing their feasibility analyses. Also the study has implications for the policy makers as they now have entrepreneurs not only from the business communities but also from non business communities.

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CONCLUSION:
From the term paper we concluded that the successful entrepreneur is one who carefully analyze the environment and able to learn from environment and increase his knowledge that will increase the organizational performance and also able to analyze the opportunities in the external environment and use their strengths to convert all the potential opportunities into venture and successfully create value. The successful entrepreneur is also one who can align their strategies with the environment in order to successfully adopt the changes occur in the environment. As we all know that major responsibilities of an entrepreneur are forecasting, budgeting, organizing, planning and leading. But the main thing which every entrepreneur should do is environmental scanning, because if entrepreneur did not do that than all other efforts which they performed in order to make their venture successful will be useless.

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