Strategic Choice and the Survival of Start up IT Companies

An empirical study was undertaken to identify the influence of strategic choices on the organisational performance of start up IT companies in New Zealand. The findings indicate that the organisations that exhibited moderate levels of strategic particularity and holistic strategic balance realising moderately simple strategies achieved profitability and incremental business growth. These organisations were able to sustain or increase their employee base. However, the organisations that exhibited a lack of strategic particularity and holistic strategic balance realising excessively complex strategies faced negative cash-flow issues and reduced employee levels. These organisations were generally downsized, went into receivership or were sold. The findings of this study were also reported in Technovation, 2008, vol. 28, no. 3, pp. 161-169.