An affordance lens on the influence of incubators on firms’ strategy development

Business incubators provide resources to help create successful new ventures (Hackett & Dilts, 2004b). However little is known about how the strategies of the incubated firms develop and the specific role of incubators in this process. While incubators have received increased attention in academic literature in recent years, most of this research has focused on the economic benefits of incubators, the firms’ survival rates, and on the incubators’ provisions to firms. There has been minimal attention on how incubators influence what firms actually do and about strategy development in new entrepreneurial firms.  This thesis explores how incubators influence firms’ strategy developments. The theory of affordances (TOA) recognises that objects allow for varying opportunities for action (Gibson, 1977) and provides the theoretical lens for this study. This lens was chosen due to its inherent acknowledgement of the complexity of relationships between objects, actors and the environment.  First the TOA, incubator, and strategy development literature are examined. This examination concludes with the development of a conceptual model to operationalise incubators’ provisions and firms’ strategy developments. The conceptual model highlights that the relationship between incubators’ provisions and firms’ strategy developments may not simply be one of cause and effect; it takes into account how the affordances of the provisions are perceived and realised, and how this is related to the incubators’ influence on the firms’ strategy development. The conceptual model also identifies contextual factors that could impact this process.  A mixed methodology approach was employed which involved in-depth interviews and a survey. The participants were from all six incubators that were in the New Zealand Government’s incubator support programme and included both the incubators and their firms, enabling a triangulated analysis of this primarily qualitative data.  The application of the TOA aided the contribution to incubator knowledge. It was found that firms’ judged the value of provisions differently depending on use, and the affordances arising from the provisions varied in scope and changed over time. The firm’s product type, governance structure, duration-factors and the breadth of focus of the incubators, may be associated with how the firms perceived and realised affordances from the incubators’ provisions and, in turn, how their strategies were influenced. In the process of applying the TOA in organisational studies three underlying themes emerged regarding its application; the specificity of affordances, the substitutability of objects and path dependency. Based on these three themes, contributions to the TOA are also proposed.  Knowledge gained from this study could inspire further use of the TOA to gain a greater understanding of its application, particularly in organisational settings. From a practice standpoint, knowledge gained should lead to enhancements and greater efficiencies in the incubation sector.