Theory of international new venture survivability

What is it about?

The theory of international new venture survivability postulates that the closer the new venture is to the hype, the higher the likelihood of failure. Hype and uncertainty are two sides of the same coin. Hype is the overall sentiment of the environmental context, within which the new venture is embedded, about the future. Uncertainty is similar to rolling a dice that is unbalanced with infinite number of faces. The what, how, why, who, where, when elements of theory are discussed.

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Why is it important?

A typology of hype is developed by cross-tabulating sentiment of competitive and remote environments about the future, generating four types: delusional optimism; over-optimism; pessimism; realism talk. Hype typology is based on two assumptions: signals from competitive environment have a stronger effect on firms behaviour; overall outcome arises as a result of interaction between individuals and changes in behaviour which they induce in one another.