Analyzing antecedents affecting the organizational performance of start-up businesses

Abstract

Purpose The purpose of this paper is to depict the effects and relative importance of technological, organizational, environmental and managerial factors on the organizational performance of start-up businesses. Design/methodology/approach This research’s primary data was collected from 389 start-up companies in Malaysia. Principle component analysis and the orthogonal model with Varimax rotation method are used to perform exploratory factor analysis test. Structural equation modelling is also used in confirmatory factor analysis to explore the relationships between independent and dependent variables. Findings The findings suggest positive effects of technological and environmental characteristics on the organizational performance of start-up businesses. The managerial characteristics do not have any positive effect on the organizational performance of start-up businesses. The organizational characteristics split into two parts: the availability of internal financial resources, which positively affects the organizational performance of start-up businesses; and the availability of business incubation, which does not have any important effect. Moreover, start-up companies should choose the one with the highest perceived advantage as it would have the most significant positive effect on their organizational performance. In addition, it was detected that venture capitalists’ (VCs) support has the most positive influence on organizational performance and social customer relationship management adoption even more than governmental supports in the context of Malaysia. Originality/value The proposed framework of this research can be used not only as a research tool for examining determinant factors affecting organizational performance of start-up businesses but also by governments, VCs and other investors to detect best-performing start-up businesses.