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In this such a detailed criteria about enhancing new venture creation success in south africa a project management perspective.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
418
Dennis Yao Dzansi (South Africa), Patience Rambe (South Africa), William James Coleman
(South Africa)
Enhancing new venture creation success in South Africa: a project
management perspective
Abstract
South Africa’s new venture creation rate is disturbingly low. Ineffective management during start-up can lead to a low
venture creation rate. Amidst the growing importance of project management in effective business management, utilizing
project management in the entrepreneurial process has become very appealing. The purpose of this paper is to provide a
project management model for starting a new venture. Desk research is undertaken through which relevant literature on the
key components of the study is reviewed and synthesized. The authors find that through action research, project management
aspects can be integrated into the entrepreneurial process to improve the new venture success rate. Based on this framework,
the authors conclude that it is possible to improve Total Entrepreneurial Activity (TEA) in South Africa and elsewhere. This
theoretical framework is yet to be tested. However, even in its present untested form, the paper is important because it
theoretically enriches the entrepreneurship literature whilst also offering a possible practical solution to the vexing problem of
high new venture creation failure rate in South Africa and elsewhere through a structured framework.
Keywords: entrepreneurship, total entrepreneurial activity, agile project management, new venture creation.
JEL Classification: M13.
Introduction
1
Notwithstanding its considerably stable economy
relative to other African economies, new venture
creation in South Africa is disturbingly low. For
example, South Africa’s entrepreneurial activity for
the years 2008-2009 paints a dim picture: According to
FNB and Endeavor South Africa (2010), the Total
Entrepreneurial Activity (TEA) index of South Africa
stood at 7.8% in 2008, which was lower than that of
other emerging economies, such as Colombia (24.5%)
and Mexico (13.1%). Following the economic crisis of
2009, the level of the nation’s TEA plummeted to just
over 5% (FNB and Endeavor South Africa, 2010).
Various Global Entrepreneurship Monitor (GEM)
reports also show that South Africa’s TEA rate in 2011
(9.1%) and in 2010 (8.9%) is far below the average of
comparable low- and middle-income economies
around the world (Herrington et al., 2009; Herrington
et al., 2011). While subsequent years may have posted
some positive gains, new venture creation generally
remains a grave concern for both academics and
policymakers in South Africa.
As in most developing countries that are seeking to
address problems of inequality, unemployment and
poverty, stimulating entrepreneurship has become the
singular, preferred means of solving the problems of
glaring income disparities and socio-economic
fissures in South Africa, where the country’s Gini
Dennis Yao Dzansi, Patience Rambe, William James Coleman, 2015.
Dennis Yao Dzansi, Ph.D. (entrepreneurship), Associate Professor,
Department of Business Support Studies, Faculty of Management
Sciences, Central University of Technology, Free State, South Africa.
Patience Rambe, Ph.D., Senior Researcher, Department of Business
Support Studies, Faculty of Management Sciences, Central University
of Technology, Free State, South Africa.
William James Coleman, M.Tech. (Business Administration),
Department of Business Support Studies, Faculty of Management
Sciences, Central University of Technology, Free State, South Africa.
coefficient (around 57.8) is considered to be among
the highest in the world (Bosch et al., 2010). Apart
from growing economic, and hence, social
inequalities, the call for increased entrepreneurship
activity in South Africa has been magnified by the
2009-2010 recession, which was marked by
accelerated business closures, resultant job losses and
the failure of large companies to create employment
(Herrington et al., 2009).
Compounding the inequality problem further, the
Entrepreneurial Dialogues (FNB & Endeavor South
Africa, 2010) and, more recently, Arko-Achemfuor
(2013) highlight entrepreneurship differences within
South Africa’s major ethnic groups, with Indians and
Whites having more entrepreneurs than Blacks and
Coloreds. Disparities in entrepreneurial activity
transcend race and are also reflected in income levels,
according to age. South Africa’s rates of TEA in the
18-24 and 25-34-years age brackets were the second
lowest of the BRICS economies, which is a cause
for concern when one considers South Africa’s
youth unemployment rate of 48.2% (Herrington et
al., 2011).
1. Statement of the research problem
The aforementioned bleak picture of South Africa’s
entrepreneurial activity draws attention to the need for
alternative ways of approaching entrepreneurship
development in the country, with the possibility that
such a need also exists in similar developing countries.
Given that project management is an acknowledged
process for achieving organizational goals, and that
new venture creation has all the hallmarks of a project,
albeit small (Burke, 2007), this paper theorizes that the
skillful incorporation of project management
techniques into entrepreneurial initiatives can improve
the success rate of new ventures.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
419
Embracing the idea of integrating project management
into the entrepreneurial process, Lindgren and
Packendorff (2003) proposed that entrepreneurial acts
are a temporary series of events with time-limited and
team-oriented action, which means that entrepreneurial
acts could be analyzed and researched in term of
projects. While entrepreneurship literature conceives
project management as a necessary skill for successful
conception and development of all new business start-
ups (Burke, 2007; Turner et al., 2009; Lindgren &
Packendorff, 2011; Ramirez-Portilla, 2013), what
remains unknown is how project management can be
integrated into the new venture creation process to
optimize the chances of success. In this respect,
Ramirez-Portilla (2013) highlighted the fact that while
entrepreneurs are constantly involved in projects, even
if unconsciously, there is a paucity of research that
examines the practical overlap of these theoretical
constructs. Rico et al. (2011) observed that while
entrepreneurial studies explain new venture creation
from various theoretical perspectives, “how” to
improve the process remains unsolved. They
elaborated that, to date, there is no process “road map”
that can guide the prospective entrepreneur through the
unknown territories of inputs, desired outcomes and
associated risks. In view of these gaps and concerns,
this study conceives of developing a project-
management-based new venture creation process as a
necessity.
1.1. Research objectives. Mindful of the above
practice and research gaps, this study sought to: (1)
identify project management techniques that can be
incorporated into the new venture creation process,
and (2) generate a pragmatic yet scientific framework
for incorporating the two processes of project
management and entrepreneurship. In order to attain
these objectives a literature review was undertaken.
2. Literature review
For Burke (2006), the setting up of a new venture
bears all the characteristics of a project and, thus,
requires project management skills. Burke (2006)
argued that project management is a core body of
knowledge required for new business development.
The process and procedure (the “how”) of integrating
project management into the entrepreneurial process
necessitates a consideration of the different phases
and associated activities of the venture creation, as
well as an examination of how project management
phases fit into them.
2.1. The new venture creation process. Based on the
literature, the entrepreneurial (new venture creation)
process can be conceptualized as consisting of idea
generation, planning, resource gathering and
implementation stages or phases (Burke, 2006;
Kunene, 2008; Deakins & Freel, 2009; Kariv, 2011).
2.1.1. Idea generation. The idea generation stage is
where the formulation of ideas, creativity and
opportunity identification take center stage (Burke,
2006; Kariv, 2011). Few or no restrictions and no
evaluation or criticism may be tolerated since that is
counterproductive to the flow of ideas (Allen, 2012).
Accordingly, we infer that project management
principles may not apply, owing to their rigidity, as
opposed to the apparent flexible nature of idea
generation. The highly unstructured and “untamed”
nature of idea generation, which is marked by trial
and error, exploration and limited controls,
practically implies that idea generation may not be
amenable to integration of the conventionally rigid
regime of project management (Coleman, 2014).
2.1.2. Business planning. From a new venture creation
perspective, planning involves making decisions about
which practical activities need to be executed, as well
as turning ideas into reality via a business plan.
Planning enables the entrepreneur to think through all
aspects of the business, resulting in reduced risks
associated with the venture (Nieman & Nieuwen-
huizen, 2009; Gruber, 2007). Such venture planning
closely dovetails with the planning stage in project
management. Surprisingly, Karlsson & Honig (2009)
reported that business plans are merely symbolic acts
often written just to finance a venture. They point out
discrepancies that exist between the business plan and
the firms’ activities over time. To this end, the rigidity
of project management can help, requiring that
business plans be followed to the letter unless a
deviation is absolutely necessary. Such rigid adherence
could be critical to overcoming the pitfalls of venture
planning, which often takes a symbolic gesture.
2.1.3. Resource gathering. In the resource gathering
stage, consideration is given to the main resources of
a venture, such as finance, people, equipment and
fixed assets. It also relates to exploring how resources
can deliver profit to owners and add value to
customers. Wickham (2004) argues that successful
entrepreneurship requires the special ability to
judiciously and appropriately allocate resources that
are by nature scarce. By the same token, managing a
venture start-up demands that the entrepreneur
functions as a project manager, whose success is tied
to the ability to acquire adequate resources (Meredith
& Mantel, 2012). Resource generation contributes to
the success of new venture creation (Chrisman et al.,
2005; Deakins & Freel, 2009). Project management
competencies, such as accurate resource estimation
using standard methods, become vital in resource
generation. As Wickham (2004) postulates, resource
acquisition appears to be the most challenging at the
stage of business inception. As the business grows,
this task may become easier, depending on
managerial competence (Wickham, 2004).
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
420
2.1.4. Business implementation. Finally, the
implementation stage is where the business is formed,
and is called “the entrepreneurial event”. Using the
term event alone connotes a project. It is here that the
creative idea (Hatten, 2006) becomes a reality through
the implementation of business concepts, such as
launching new products, introducing new methods of
production, opening up new markets, opening new
supply sources or industrial reorganization. This stage
consummates what Larson and Gray (2011) highlight
as the science of project management – a formal,
disciplined and purely logical part of the process of
project execution. Just as the new venture creation
would entail operationalization of the planned
activities, the implementation of the new venture from
a project management perspective underscores the
clear interpretation of project scope statements, as well
as the creation of the deliverables and work breakdown
structure that facilitates planning and monitoring of the
project progress. From a new venture perspective, this
stage involves the role of the entrepreneur in dealing
with customers, suppliers’ cash flow, and other
business stakeholders, such as bank managers,
investment bankers or other financiers. When the
business becomes operational, the project management
element, which involves “the application of
knowledge, skills and techniques to execute projects
effectively and efficiently ... a strategic competency for
organizations, enabling them to tie project results to
business goals – and, thus, better compete in their
markets” (PMI, 2013b), becomes even more
indispensable. It is precisely the skill set (project
management) that the entrepreneur requires to
implement the business idea and minimize the risks
associated with implementation. As Larson and Gray
(2011) observe, “Project management is no longer a
special-need management. It is rapidly becoming a
standard way of doing business.”
3. Methodology for integrating project
management elements into new venture creation
This section outlines the scientific process (metho-
dology) deemed appropriate for the integration of
project management elements into a new venture
creation process. Mindful of the fact that new
ventures come in many forms and, therefore, focus
on different industries, it is our considered opinion
that action research offers the best scientific solution
for integrating aspects of project management into
the new venture creation process. As a scientific
process, action research can be viewed as a
systematic approach that combines action and
reflection with the intention of improving practice
(Cohen, Manion & Morrison, 2011). As Cohen,
Manion, and Morrison (2011) point out, action
research involves some intervention in the
functioning of the real world and a close examination
of the effects of such an intervention to aid choice-
making and effectively improve practice. Thus,
action research is all about learning from one’s own
practice in order to improve that practice.
This paper recommends action research in the
integration of project management into the venture
creation process with the sole purpose of improving
the success of new ventures. To provide for varying
levels of uncertainty during the new venture
creation process as new information is acquired, this
study suggests Canonical Action Research (CAR)
(Susman, 1983) as a research design.
3.1. Overview of CAR. Basically, CAR follows a
circular iterative process, starting with diagnosis of
the problem, followed by action planning, taking
action, evaluating the effect of an action and then
specifying the learning that has taken place
(Susman, 1983). CAR, therefore, focuses on the
generation of new knowledge. Its iterative nature
implies a cyclical process (Susman, 1983). For
Davison et al. (2004), the cyclical nature of CAR
involves a one-directional flow, with diagnosis
followed by planning, intervention, evaluation and
reflection. Davison et al. (2004) suggested that
while the unidirectional flow is desirable, some
iteration between stages may be needed. Figure 1
represents the entire CAR framework.
Fig. 1. CAR framework (based on Susman, 1983)
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
421
In the context of integrating aspects of project
management into the new venture creation process,
diagnosing is the process of identifying the appropriate
project management procedures and possible problems
that might occur in their integration into the new
venture creation process. The next activity, action-
planning, involves cooperating with the project
participants in order to determine the actions that will
address the primary problem. These actions will, in
turn, be built into the business processes. The
following step, namely, intervention or action-taking,
involves implementation of the planned changes, as
suggested by the participants in the action-planning
stage. Upon completing these stages, the participants
and researchers collaborate in evaluating the outcomes
of the applied actions. By iterating through the cycles
of activities, researchers can develop an increasingly
detailed picture of the problem being addressed, and at
the same time move closer to solving the problem
(Susman, 1983).
3.2. Integration planning. As stated above, the
literature shows that the entrepreneurial process can
conveniently be conceptualized as consisting of idea
generation, planning, resource gathering and
implementation (Bang, 1993; Burke, 2006; Kunene,
2008; Deakins & Freel, 2009; Kariv, 2011). In the
course of the literature review, it was stated that due
to its nature, the idea generation phase does not lend
to the rigidities imposed by project management. The
integration is accordingly formulated along this
conceptualization with the exclusion of the idea
generation phase, and designed to match project
management elements with the remaining three
stages of the entrepreneurial process. Table 1 depicts
what we term the action research blueprint, which
matches the various elements of project management
to the three stages of the entrepreneurial process. In
project management parlance, this is called
integration planning. The integration planning stage
involves the identification of project management
principles and techniques that can be incorporated
into the new venture creation process, as well as the
identification of entrepreneurial activities to which
these project management activities and techniques
can be tied. Drawing on extant literature (PMI,
2013a; Westland, 2006), the following project
management activities and processes have been
identified for integration into the new venture
creation process, namely, project initiation, project
planning, project execution, monitoring and control.
Table 1. Graphical illustration of the research
blueprint (integration planning)
Stage
New venture creation
activities
Project management
activities
Planning
Business plan:
Marketing planning
Project management
planning:
Finance planning
Production planning
Sales planning
Customer strategy
Management planning
Etc.
Selecting project
team
Project scope
definition
Project
budgeting
Quality planning
Risk
management
planning
Resource
gathering
Human resources
Physical resources
Financial resources
Physical location
Defining activities
Scheduling activities
Prioritising activities
Scheduling activities
Determining resource
requirements
Implementation
Registering the business
Establish various
departments
Establish systems,
processes & procedures
Implement customer &
supplier strategies
Take first sales/production
orders
Systems monitoring &
controlling
Processes monitoring
& controlling
Procedures monitoring
& controlling
Risk management
Quality management
3.3. The iteration framework. The framework
consists of application of action research to the
blueprint shown in Table 1 in order to determine
whether the elements are suitable and to identify
possible problems associated with the integration.
Each stage in the framework is referred to as a cycle.
The iteration framework is illustrated in Figure 2 (see
Appendix).
3.3.1. CAR cycle 1: New venture planning. Diagnosis
– The new venture planning stage consists of
planning of both the business and the accompanying
business processes required to launch the business
(Deakins and Freel, 2009; Nieman and
Nieuwenhuizen, 2009; Kariv, 2011). The major
activity at this diagnosis stage is to identify which of
these planning activities need to be enhanced by
which project management activity. Our intuition is
that all of the new venture creation planning stage
activities would benefit from project management
techniques. We specifically identify the work
breakdown structure (WBS) analysis. Key project
management activities that are essential for proper
diagnosis include determining: the scope of activities,
activity duration, critical paths, and sequencing of
activities. WBS analysis should be carried out so that
the scope of activities can be determined. Thereafter,
activity durations and the sequence of activities
should be identified. The defining project
management technique that can be applied here is
critical path analysis. As there are a number of
interlinking activities in the entrepreneurial process,
critical path is fundamental in managing these
activities. The critical path enables the venture team
to focus attention on activities that could not only
delay the venture launch, but cause it to fail. It is
important to mention here that while the budgeting of
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
422
time for each activity must be done according to
project management principles, it is apparent that in
financial planning, project management does not
really augment what normal financial management
already provides.
Action planning – In line with project management
procedures, the first step here is to appoint a project
team. The team ideally consists of technical staff,
administrators, finance experts and the new venture
entrepreneur, all of whom are active participants in
the new venture creation process. All the team
members should meet on a regular basis, depending
on the intensity of the current activities.
Action taking – At this stage, the main business
planning problems that the team has faced and dealt
with undergo scrutiny and rectification.
Evaluating – The main task here is to determine
whether the various project management techniques
are flexible enough to respond to frequent changes
that normally occur in the entrepreneurial process.
The result of the evaluation is then reported under
lessons learned.
Lessons learned – The main learning experience in
integrating project management aspects in the
entrepreneurial venture sense is explicated here.
This includes learning which project framework is
most appropriate in the management of planning
activities, which project management tools to use
(e.g., Gantt charts would be most appropriate for the
venture planning phase), determining critical path(s)
and so on. The next section describes Cycle 2.
3.3.2. CAR cycle 2: Resource gathering. Diagnosis –
Problem diagnosis at this stage should centre mainly
on establishing the resource needs of the envisaged
business. Resource gathering involves two main
activities as far as new venture creation is concerned.
On the one hand, there are all the activities regarding
materials procurement, physical facilities as well as
the facilities for operating the business. On the other
hand, there are the related business activities that
involve establishing the technical and human-
resource teams, as well as estimating capital and
operational costs. The main project management
techniques identified to be applicable here are
requirements determination and the scheduling of
activities.
Action planning – Action planning at the resource-
gathering stage involves establishing and
coordinating all aspects of the resource-gathering
process. Whereas in the planning cycle an overall
project plan would be produced, in the resource
gathering cycle requirements and activities related to
resource gathering need to be carried out. The main
project management techniques identified for this
cycle are requirements determination and scheduling
of activities. Time budgeting for all activities to
produce a high-level resource budget is also essential
at this stage, as is the gathering of human resources.
Evaluating – This stage involves determining
whether the project management tools that were
applied are effective in carrying out the resource-
gathering process.
Lessons learned – At this stage, lessons learned
should focus on determination of financial and non-
financial requirements. Although it is reasonable to
assume that business people will learn from past
experiences, lessons learned from the scheduling of
activities and time budgeting, etc., will enhance the
resource-gathering process to ensure that the right
resources in the right quantities are obtained in the
future. Therefore, project management techniques
related to the scheduling of activities and budgeting
are essential requirements for the entrepreneur’s
resource gathering stage.
3.3.3. CAR cycle 3: Implementation cycle.
Diagnosis – At this stage, diagnosis involves
determining project execution activities and the
project management activities that can enhance the
business idea implementation. The launching or
implementation of the new venture generally
consists of establishing the business entity in its
legal form, securing finances, appointing staff,
putting up physical structures or leasing premises,
setting up the business processes required to start
operating and so on. Monitoring and control
techniques, as well as scheduling (time
management) are possible candidates for integration
into the venture establishment phase. However, the
full gamut of project management knowledge areas
can also be considered necessary to a lesser or
greater extent, depending on the analysis
requirements of the particular type of business.
Action planning – The action planning should seek
agreement on: the physical structures to put up; the
business processes, such as functional departments
and the preferred information system; the actual
numbers of employees required and the applicable
remunerations; production capacity; the type of
bank account and the company’s preferred bankers;
and sources, types and amounts of finance required.
Following this, contracts need to be signed with
suppliers, customers, etc. It is also important at this
stage that the business take place within the existing
legislation and that the consequence of new
legislation be managed when that occurs. All of
these implementation plans can be carried out using
the project management tools of WBS, which
includes activity scheduling, as well as activity and
duration estimation.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
423
Action taking – This is where the business idea
becomes operational. The first necessary action is to
establish the business entity in its legal form.
Thereafter, employees need to be appointed, a bank
account needs to be opened, finances need to be
banked, an information system must be set up and
begin running, and raw materials (if applicable)
need to be procured. When first orders are taken,
production commences. In addition, in this phase,
project monitoring and control techniques need to
be operational. Monitoring and controlling are the
main project management tools to be used at this
stage. The scheduling process can be monitored and
controlled using agile project management (APM)
methods.
Evaluating – At this stage, evaluation involves
determining how smoothly the launch of the venture
is performing by means of the monitoring and
control mechanisms that have been put in place.
That is, the evaluation process is measured by how
the implementation activities respond to the
integration of project management techniques. This
involves documenting the implementation results.
The results are then listed under lessons learned.
Lessons learned – Because new venture creation
occurs in a rapidly changing business environment
that is full of uncertainty (Bang, 1993; Burke, 2006;
Kunene, 2008; Deakins and Freel, 2009; Kariv,
2011), not all plans may work. Therefore, at this
stage, the effectiveness of the basic project
management tools in ensuring the smooth new
venture implementation should be documented.
Secondly, it must be clear that not all of the nine
knowledge areas of project management may be
applicable at the implementation stage. The
information documented here is then fed into the
reflection cycle.
3.3.4. CAR cycle 4: Final reflection. This stage
requires thorough reflection upon previous cycles.
Planning stage – Planning forms an important part
of any entrepreneurial venture and stands at the core
of project management. It is a fact that the failure of
business plans to cope with rapid fluctuations in the
ever-changing business environment (Bang, 1993;
Burke, 2006; Kunene, 2008; Deakins and Freel,
2009; Kariv, 2011) is the precise reason why it is
necessary to identify the most flexible project
management framework, which is able to
accommodate flexible business plans. Therefore, the
focus here should be on identifying project
management activities that are flexible enough to
enhance venture planning.
Resource-gathering stage – The resource-gathering
stage is very important to a successful business
launch (Chrisman et al., 2005; Deakins & Freel,
2009). At this stage, reflection should focus on how
the various stages of the entrepreneurial process can
be disaggregated into smaller WBS to allow for
effective resource allocation at the activity level. A
total system view is required here so the entire
project is accorded priority.
Implementation stage – At this stage, a final review
is conducted to examine how decisions were made
at every previous stage; for example, the impact that
the planning and resource-gathering stages had on
the successful final starting of the business, as well
as the decision-making that went into selecting the
final tools for monitoring and control.
Conclusion
Planning stage – Clearly, planning forms an
important part of any entrepreneurial venture and
stands at the core of project management. The failure
of business plans to cope with rapid fluctuations in
the ever-changing business environment is the precise
reason why it is necessary to use the APM
framework, which accommodates flexible business
plans. The dependency between activities and their
planning was discussed earlier. It is granted that these
dependencies can be managed using a Gantt chart or
a network diagram. However, a lot of effort goes into
maintaining Gantt charts, especially when changes
are happening quickly and frequently. In practice, it
is much more convenient to use a whiteboard with
sticky notes rather than Gantt charts to represent and
visualize the activities that have uncertain solutions.
In this way, it is simple to move the activities
anywhere on the whiteboard and draw connecting
lines between the dependent activities. Different
colors are used to represent the activities for which
teams or individuals are responsible. This technique
was adapted from APM and can be refined,
depending on the complexity of the new business
environment. The WBS is an essential tool in the
planning endeavor as it, firstly, enables the team to
ensure that all of the activities have been identified,
and, secondly, shows which processes have uncertain
solutions.
Resource-gathering stage – The resource-gathering
cycle can benefit from the WBS since resources can
be allocated at the activity level, and activities can
be grouped together for control purposes. Costs can
also be allocated at the activity level and “rolled up”
to the next level; thus, the cost can be determined
for a specified group of processes or for the entire
project.
Implementation stage – Implementation is about
starting the business, as well as monitoring and
controlling it. Processes are controlled by monitoring
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
424
the progress according to the business plan. The
whiteboard and sticky notes can be used effectively
in the implementation and control cycles to monitor
those processes for which the solution is not well
defined, but where the solution can be discovered
through the monitoring and control processes.
Considerable value can be gained in applying project
management techniques to the nine knowledge areas.
In particular, risk and quality management highlights
the importance and benefits of applying project
management techniques in the new venture creation
process. A comprehensive risk plan identifies risks
early, and risk action plans can, thus, be implemented
proactively. It is quite clear that not all of the ten
knowledge areas of project management are
important in the new venture creation process. In the
final analysis, the venture leader and team need to be
aware of the most important knowledge areas of
project management and when it is profitable to apply
them in the new venture process.
It can also be concluded that through action research,
project management aspects can be integrated into
the entrepreneurial process to improve the start-up
success rate. That is, it is possible to improve Total
Entrepreneurial Activity (TEA) in countries like
South Africa (where start-up failure is high) through
the integration of aspects of project management into
the new venture process.
Besides enriching the entrepreneurship literature
theoretically, the important practical contribution of
the paper is that it provides a structured approach/
framework that can be used to enhance new venture
creation success in South Africa and elsewhere.
Interested researchers are encouraged to empirically
test the framework in the creation of new ventures
in various industries and different countries to
validate its applicability and to assist in the possible
refinement of the framework.
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The%20Entrepreneurial%20Dialogues%20-%20State%20of%20Entrepreneurship%20in%20South%20Africa.pdf
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perspective, Journal of Business Venturing, 22 (6), pp. 782-807.
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Company, Boston, MA.
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Graduate School of Business, University of Cape Town.
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Problems and Perspectives in Management, Volume 13, Issue 2, 2015
426
Appendix
CAR cycle 1
Cycle 1 consists of integrating project planning activities
listed in Table 1 into the new venture planning activities
listed in Table 1 above.
CAR cycle 2
Cycle 2 consists of integrating project resource gathering
activities listed in Table 1 into the new venture resource
gathering activities listed in Table 1 above.
CAR cycle 3
Cycle 3 consists of integrating project implementation
activities listed in Table 1 into the new venture
implementation activities listed in Table 1 above.
CAR cycle 4
Cycle 4 consists of reflecting on all the lessons learnt to
determine what works and what does not work in cycles 1, 2
and 3. This forms the basis for providing recommendations
for the integration of project management activities into the
new venture creation process.
Fig. 2. A graphical illustration of the action research iteration framework (based on Abrahamse, 2008)
Diagnosing Action planning
Action taking
Evaluating
Lessons learnt
Diagnosing
Action planning
Action planning
Action taking
Action taking
Lessons learnt
Lessons learnt
Evaluating
Evaluating
Diagnosing
Reflection (learning)
Specifying learning
doc_801521734.pdf
In this such a detailed criteria about enhancing new venture creation success in south africa a project management perspective.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
418
Dennis Yao Dzansi (South Africa), Patience Rambe (South Africa), William James Coleman
(South Africa)
Enhancing new venture creation success in South Africa: a project
management perspective
Abstract
South Africa’s new venture creation rate is disturbingly low. Ineffective management during start-up can lead to a low
venture creation rate. Amidst the growing importance of project management in effective business management, utilizing
project management in the entrepreneurial process has become very appealing. The purpose of this paper is to provide a
project management model for starting a new venture. Desk research is undertaken through which relevant literature on the
key components of the study is reviewed and synthesized. The authors find that through action research, project management
aspects can be integrated into the entrepreneurial process to improve the new venture success rate. Based on this framework,
the authors conclude that it is possible to improve Total Entrepreneurial Activity (TEA) in South Africa and elsewhere. This
theoretical framework is yet to be tested. However, even in its present untested form, the paper is important because it
theoretically enriches the entrepreneurship literature whilst also offering a possible practical solution to the vexing problem of
high new venture creation failure rate in South Africa and elsewhere through a structured framework.
Keywords: entrepreneurship, total entrepreneurial activity, agile project management, new venture creation.
JEL Classification: M13.
Introduction
1
Notwithstanding its considerably stable economy
relative to other African economies, new venture
creation in South Africa is disturbingly low. For
example, South Africa’s entrepreneurial activity for
the years 2008-2009 paints a dim picture: According to
FNB and Endeavor South Africa (2010), the Total
Entrepreneurial Activity (TEA) index of South Africa
stood at 7.8% in 2008, which was lower than that of
other emerging economies, such as Colombia (24.5%)
and Mexico (13.1%). Following the economic crisis of
2009, the level of the nation’s TEA plummeted to just
over 5% (FNB and Endeavor South Africa, 2010).
Various Global Entrepreneurship Monitor (GEM)
reports also show that South Africa’s TEA rate in 2011
(9.1%) and in 2010 (8.9%) is far below the average of
comparable low- and middle-income economies
around the world (Herrington et al., 2009; Herrington
et al., 2011). While subsequent years may have posted
some positive gains, new venture creation generally
remains a grave concern for both academics and
policymakers in South Africa.
As in most developing countries that are seeking to
address problems of inequality, unemployment and
poverty, stimulating entrepreneurship has become the
singular, preferred means of solving the problems of
glaring income disparities and socio-economic
fissures in South Africa, where the country’s Gini
Dennis Yao Dzansi, Patience Rambe, William James Coleman, 2015.
Dennis Yao Dzansi, Ph.D. (entrepreneurship), Associate Professor,
Department of Business Support Studies, Faculty of Management
Sciences, Central University of Technology, Free State, South Africa.
Patience Rambe, Ph.D., Senior Researcher, Department of Business
Support Studies, Faculty of Management Sciences, Central University
of Technology, Free State, South Africa.
William James Coleman, M.Tech. (Business Administration),
Department of Business Support Studies, Faculty of Management
Sciences, Central University of Technology, Free State, South Africa.
coefficient (around 57.8) is considered to be among
the highest in the world (Bosch et al., 2010). Apart
from growing economic, and hence, social
inequalities, the call for increased entrepreneurship
activity in South Africa has been magnified by the
2009-2010 recession, which was marked by
accelerated business closures, resultant job losses and
the failure of large companies to create employment
(Herrington et al., 2009).
Compounding the inequality problem further, the
Entrepreneurial Dialogues (FNB & Endeavor South
Africa, 2010) and, more recently, Arko-Achemfuor
(2013) highlight entrepreneurship differences within
South Africa’s major ethnic groups, with Indians and
Whites having more entrepreneurs than Blacks and
Coloreds. Disparities in entrepreneurial activity
transcend race and are also reflected in income levels,
according to age. South Africa’s rates of TEA in the
18-24 and 25-34-years age brackets were the second
lowest of the BRICS economies, which is a cause
for concern when one considers South Africa’s
youth unemployment rate of 48.2% (Herrington et
al., 2011).
1. Statement of the research problem
The aforementioned bleak picture of South Africa’s
entrepreneurial activity draws attention to the need for
alternative ways of approaching entrepreneurship
development in the country, with the possibility that
such a need also exists in similar developing countries.
Given that project management is an acknowledged
process for achieving organizational goals, and that
new venture creation has all the hallmarks of a project,
albeit small (Burke, 2007), this paper theorizes that the
skillful incorporation of project management
techniques into entrepreneurial initiatives can improve
the success rate of new ventures.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
419
Embracing the idea of integrating project management
into the entrepreneurial process, Lindgren and
Packendorff (2003) proposed that entrepreneurial acts
are a temporary series of events with time-limited and
team-oriented action, which means that entrepreneurial
acts could be analyzed and researched in term of
projects. While entrepreneurship literature conceives
project management as a necessary skill for successful
conception and development of all new business start-
ups (Burke, 2007; Turner et al., 2009; Lindgren &
Packendorff, 2011; Ramirez-Portilla, 2013), what
remains unknown is how project management can be
integrated into the new venture creation process to
optimize the chances of success. In this respect,
Ramirez-Portilla (2013) highlighted the fact that while
entrepreneurs are constantly involved in projects, even
if unconsciously, there is a paucity of research that
examines the practical overlap of these theoretical
constructs. Rico et al. (2011) observed that while
entrepreneurial studies explain new venture creation
from various theoretical perspectives, “how” to
improve the process remains unsolved. They
elaborated that, to date, there is no process “road map”
that can guide the prospective entrepreneur through the
unknown territories of inputs, desired outcomes and
associated risks. In view of these gaps and concerns,
this study conceives of developing a project-
management-based new venture creation process as a
necessity.
1.1. Research objectives. Mindful of the above
practice and research gaps, this study sought to: (1)
identify project management techniques that can be
incorporated into the new venture creation process,
and (2) generate a pragmatic yet scientific framework
for incorporating the two processes of project
management and entrepreneurship. In order to attain
these objectives a literature review was undertaken.
2. Literature review
For Burke (2006), the setting up of a new venture
bears all the characteristics of a project and, thus,
requires project management skills. Burke (2006)
argued that project management is a core body of
knowledge required for new business development.
The process and procedure (the “how”) of integrating
project management into the entrepreneurial process
necessitates a consideration of the different phases
and associated activities of the venture creation, as
well as an examination of how project management
phases fit into them.
2.1. The new venture creation process. Based on the
literature, the entrepreneurial (new venture creation)
process can be conceptualized as consisting of idea
generation, planning, resource gathering and
implementation stages or phases (Burke, 2006;
Kunene, 2008; Deakins & Freel, 2009; Kariv, 2011).
2.1.1. Idea generation. The idea generation stage is
where the formulation of ideas, creativity and
opportunity identification take center stage (Burke,
2006; Kariv, 2011). Few or no restrictions and no
evaluation or criticism may be tolerated since that is
counterproductive to the flow of ideas (Allen, 2012).
Accordingly, we infer that project management
principles may not apply, owing to their rigidity, as
opposed to the apparent flexible nature of idea
generation. The highly unstructured and “untamed”
nature of idea generation, which is marked by trial
and error, exploration and limited controls,
practically implies that idea generation may not be
amenable to integration of the conventionally rigid
regime of project management (Coleman, 2014).
2.1.2. Business planning. From a new venture creation
perspective, planning involves making decisions about
which practical activities need to be executed, as well
as turning ideas into reality via a business plan.
Planning enables the entrepreneur to think through all
aspects of the business, resulting in reduced risks
associated with the venture (Nieman & Nieuwen-
huizen, 2009; Gruber, 2007). Such venture planning
closely dovetails with the planning stage in project
management. Surprisingly, Karlsson & Honig (2009)
reported that business plans are merely symbolic acts
often written just to finance a venture. They point out
discrepancies that exist between the business plan and
the firms’ activities over time. To this end, the rigidity
of project management can help, requiring that
business plans be followed to the letter unless a
deviation is absolutely necessary. Such rigid adherence
could be critical to overcoming the pitfalls of venture
planning, which often takes a symbolic gesture.
2.1.3. Resource gathering. In the resource gathering
stage, consideration is given to the main resources of
a venture, such as finance, people, equipment and
fixed assets. It also relates to exploring how resources
can deliver profit to owners and add value to
customers. Wickham (2004) argues that successful
entrepreneurship requires the special ability to
judiciously and appropriately allocate resources that
are by nature scarce. By the same token, managing a
venture start-up demands that the entrepreneur
functions as a project manager, whose success is tied
to the ability to acquire adequate resources (Meredith
& Mantel, 2012). Resource generation contributes to
the success of new venture creation (Chrisman et al.,
2005; Deakins & Freel, 2009). Project management
competencies, such as accurate resource estimation
using standard methods, become vital in resource
generation. As Wickham (2004) postulates, resource
acquisition appears to be the most challenging at the
stage of business inception. As the business grows,
this task may become easier, depending on
managerial competence (Wickham, 2004).
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
420
2.1.4. Business implementation. Finally, the
implementation stage is where the business is formed,
and is called “the entrepreneurial event”. Using the
term event alone connotes a project. It is here that the
creative idea (Hatten, 2006) becomes a reality through
the implementation of business concepts, such as
launching new products, introducing new methods of
production, opening up new markets, opening new
supply sources or industrial reorganization. This stage
consummates what Larson and Gray (2011) highlight
as the science of project management – a formal,
disciplined and purely logical part of the process of
project execution. Just as the new venture creation
would entail operationalization of the planned
activities, the implementation of the new venture from
a project management perspective underscores the
clear interpretation of project scope statements, as well
as the creation of the deliverables and work breakdown
structure that facilitates planning and monitoring of the
project progress. From a new venture perspective, this
stage involves the role of the entrepreneur in dealing
with customers, suppliers’ cash flow, and other
business stakeholders, such as bank managers,
investment bankers or other financiers. When the
business becomes operational, the project management
element, which involves “the application of
knowledge, skills and techniques to execute projects
effectively and efficiently ... a strategic competency for
organizations, enabling them to tie project results to
business goals – and, thus, better compete in their
markets” (PMI, 2013b), becomes even more
indispensable. It is precisely the skill set (project
management) that the entrepreneur requires to
implement the business idea and minimize the risks
associated with implementation. As Larson and Gray
(2011) observe, “Project management is no longer a
special-need management. It is rapidly becoming a
standard way of doing business.”
3. Methodology for integrating project
management elements into new venture creation
This section outlines the scientific process (metho-
dology) deemed appropriate for the integration of
project management elements into a new venture
creation process. Mindful of the fact that new
ventures come in many forms and, therefore, focus
on different industries, it is our considered opinion
that action research offers the best scientific solution
for integrating aspects of project management into
the new venture creation process. As a scientific
process, action research can be viewed as a
systematic approach that combines action and
reflection with the intention of improving practice
(Cohen, Manion & Morrison, 2011). As Cohen,
Manion, and Morrison (2011) point out, action
research involves some intervention in the
functioning of the real world and a close examination
of the effects of such an intervention to aid choice-
making and effectively improve practice. Thus,
action research is all about learning from one’s own
practice in order to improve that practice.
This paper recommends action research in the
integration of project management into the venture
creation process with the sole purpose of improving
the success of new ventures. To provide for varying
levels of uncertainty during the new venture
creation process as new information is acquired, this
study suggests Canonical Action Research (CAR)
(Susman, 1983) as a research design.
3.1. Overview of CAR. Basically, CAR follows a
circular iterative process, starting with diagnosis of
the problem, followed by action planning, taking
action, evaluating the effect of an action and then
specifying the learning that has taken place
(Susman, 1983). CAR, therefore, focuses on the
generation of new knowledge. Its iterative nature
implies a cyclical process (Susman, 1983). For
Davison et al. (2004), the cyclical nature of CAR
involves a one-directional flow, with diagnosis
followed by planning, intervention, evaluation and
reflection. Davison et al. (2004) suggested that
while the unidirectional flow is desirable, some
iteration between stages may be needed. Figure 1
represents the entire CAR framework.
Fig. 1. CAR framework (based on Susman, 1983)
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
421
In the context of integrating aspects of project
management into the new venture creation process,
diagnosing is the process of identifying the appropriate
project management procedures and possible problems
that might occur in their integration into the new
venture creation process. The next activity, action-
planning, involves cooperating with the project
participants in order to determine the actions that will
address the primary problem. These actions will, in
turn, be built into the business processes. The
following step, namely, intervention or action-taking,
involves implementation of the planned changes, as
suggested by the participants in the action-planning
stage. Upon completing these stages, the participants
and researchers collaborate in evaluating the outcomes
of the applied actions. By iterating through the cycles
of activities, researchers can develop an increasingly
detailed picture of the problem being addressed, and at
the same time move closer to solving the problem
(Susman, 1983).
3.2. Integration planning. As stated above, the
literature shows that the entrepreneurial process can
conveniently be conceptualized as consisting of idea
generation, planning, resource gathering and
implementation (Bang, 1993; Burke, 2006; Kunene,
2008; Deakins & Freel, 2009; Kariv, 2011). In the
course of the literature review, it was stated that due
to its nature, the idea generation phase does not lend
to the rigidities imposed by project management. The
integration is accordingly formulated along this
conceptualization with the exclusion of the idea
generation phase, and designed to match project
management elements with the remaining three
stages of the entrepreneurial process. Table 1 depicts
what we term the action research blueprint, which
matches the various elements of project management
to the three stages of the entrepreneurial process. In
project management parlance, this is called
integration planning. The integration planning stage
involves the identification of project management
principles and techniques that can be incorporated
into the new venture creation process, as well as the
identification of entrepreneurial activities to which
these project management activities and techniques
can be tied. Drawing on extant literature (PMI,
2013a; Westland, 2006), the following project
management activities and processes have been
identified for integration into the new venture
creation process, namely, project initiation, project
planning, project execution, monitoring and control.
Table 1. Graphical illustration of the research
blueprint (integration planning)
Stage
New venture creation
activities
Project management
activities
Planning
Business plan:
Marketing planning
Project management
planning:
Finance planning
Production planning
Sales planning
Customer strategy
Management planning
Etc.
Selecting project
team
Project scope
definition
Project
budgeting
Quality planning
Risk
management
planning
Resource
gathering
Human resources
Physical resources
Financial resources
Physical location
Defining activities
Scheduling activities
Prioritising activities
Scheduling activities
Determining resource
requirements
Implementation
Registering the business
Establish various
departments
Establish systems,
processes & procedures
Implement customer &
supplier strategies
Take first sales/production
orders
Systems monitoring &
controlling
Processes monitoring
& controlling
Procedures monitoring
& controlling
Risk management
Quality management
3.3. The iteration framework. The framework
consists of application of action research to the
blueprint shown in Table 1 in order to determine
whether the elements are suitable and to identify
possible problems associated with the integration.
Each stage in the framework is referred to as a cycle.
The iteration framework is illustrated in Figure 2 (see
Appendix).
3.3.1. CAR cycle 1: New venture planning. Diagnosis
– The new venture planning stage consists of
planning of both the business and the accompanying
business processes required to launch the business
(Deakins and Freel, 2009; Nieman and
Nieuwenhuizen, 2009; Kariv, 2011). The major
activity at this diagnosis stage is to identify which of
these planning activities need to be enhanced by
which project management activity. Our intuition is
that all of the new venture creation planning stage
activities would benefit from project management
techniques. We specifically identify the work
breakdown structure (WBS) analysis. Key project
management activities that are essential for proper
diagnosis include determining: the scope of activities,
activity duration, critical paths, and sequencing of
activities. WBS analysis should be carried out so that
the scope of activities can be determined. Thereafter,
activity durations and the sequence of activities
should be identified. The defining project
management technique that can be applied here is
critical path analysis. As there are a number of
interlinking activities in the entrepreneurial process,
critical path is fundamental in managing these
activities. The critical path enables the venture team
to focus attention on activities that could not only
delay the venture launch, but cause it to fail. It is
important to mention here that while the budgeting of
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
422
time for each activity must be done according to
project management principles, it is apparent that in
financial planning, project management does not
really augment what normal financial management
already provides.
Action planning – In line with project management
procedures, the first step here is to appoint a project
team. The team ideally consists of technical staff,
administrators, finance experts and the new venture
entrepreneur, all of whom are active participants in
the new venture creation process. All the team
members should meet on a regular basis, depending
on the intensity of the current activities.
Action taking – At this stage, the main business
planning problems that the team has faced and dealt
with undergo scrutiny and rectification.
Evaluating – The main task here is to determine
whether the various project management techniques
are flexible enough to respond to frequent changes
that normally occur in the entrepreneurial process.
The result of the evaluation is then reported under
lessons learned.
Lessons learned – The main learning experience in
integrating project management aspects in the
entrepreneurial venture sense is explicated here.
This includes learning which project framework is
most appropriate in the management of planning
activities, which project management tools to use
(e.g., Gantt charts would be most appropriate for the
venture planning phase), determining critical path(s)
and so on. The next section describes Cycle 2.
3.3.2. CAR cycle 2: Resource gathering. Diagnosis –
Problem diagnosis at this stage should centre mainly
on establishing the resource needs of the envisaged
business. Resource gathering involves two main
activities as far as new venture creation is concerned.
On the one hand, there are all the activities regarding
materials procurement, physical facilities as well as
the facilities for operating the business. On the other
hand, there are the related business activities that
involve establishing the technical and human-
resource teams, as well as estimating capital and
operational costs. The main project management
techniques identified to be applicable here are
requirements determination and the scheduling of
activities.
Action planning – Action planning at the resource-
gathering stage involves establishing and
coordinating all aspects of the resource-gathering
process. Whereas in the planning cycle an overall
project plan would be produced, in the resource
gathering cycle requirements and activities related to
resource gathering need to be carried out. The main
project management techniques identified for this
cycle are requirements determination and scheduling
of activities. Time budgeting for all activities to
produce a high-level resource budget is also essential
at this stage, as is the gathering of human resources.
Evaluating – This stage involves determining
whether the project management tools that were
applied are effective in carrying out the resource-
gathering process.
Lessons learned – At this stage, lessons learned
should focus on determination of financial and non-
financial requirements. Although it is reasonable to
assume that business people will learn from past
experiences, lessons learned from the scheduling of
activities and time budgeting, etc., will enhance the
resource-gathering process to ensure that the right
resources in the right quantities are obtained in the
future. Therefore, project management techniques
related to the scheduling of activities and budgeting
are essential requirements for the entrepreneur’s
resource gathering stage.
3.3.3. CAR cycle 3: Implementation cycle.
Diagnosis – At this stage, diagnosis involves
determining project execution activities and the
project management activities that can enhance the
business idea implementation. The launching or
implementation of the new venture generally
consists of establishing the business entity in its
legal form, securing finances, appointing staff,
putting up physical structures or leasing premises,
setting up the business processes required to start
operating and so on. Monitoring and control
techniques, as well as scheduling (time
management) are possible candidates for integration
into the venture establishment phase. However, the
full gamut of project management knowledge areas
can also be considered necessary to a lesser or
greater extent, depending on the analysis
requirements of the particular type of business.
Action planning – The action planning should seek
agreement on: the physical structures to put up; the
business processes, such as functional departments
and the preferred information system; the actual
numbers of employees required and the applicable
remunerations; production capacity; the type of
bank account and the company’s preferred bankers;
and sources, types and amounts of finance required.
Following this, contracts need to be signed with
suppliers, customers, etc. It is also important at this
stage that the business take place within the existing
legislation and that the consequence of new
legislation be managed when that occurs. All of
these implementation plans can be carried out using
the project management tools of WBS, which
includes activity scheduling, as well as activity and
duration estimation.
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
423
Action taking – This is where the business idea
becomes operational. The first necessary action is to
establish the business entity in its legal form.
Thereafter, employees need to be appointed, a bank
account needs to be opened, finances need to be
banked, an information system must be set up and
begin running, and raw materials (if applicable)
need to be procured. When first orders are taken,
production commences. In addition, in this phase,
project monitoring and control techniques need to
be operational. Monitoring and controlling are the
main project management tools to be used at this
stage. The scheduling process can be monitored and
controlled using agile project management (APM)
methods.
Evaluating – At this stage, evaluation involves
determining how smoothly the launch of the venture
is performing by means of the monitoring and
control mechanisms that have been put in place.
That is, the evaluation process is measured by how
the implementation activities respond to the
integration of project management techniques. This
involves documenting the implementation results.
The results are then listed under lessons learned.
Lessons learned – Because new venture creation
occurs in a rapidly changing business environment
that is full of uncertainty (Bang, 1993; Burke, 2006;
Kunene, 2008; Deakins and Freel, 2009; Kariv,
2011), not all plans may work. Therefore, at this
stage, the effectiveness of the basic project
management tools in ensuring the smooth new
venture implementation should be documented.
Secondly, it must be clear that not all of the nine
knowledge areas of project management may be
applicable at the implementation stage. The
information documented here is then fed into the
reflection cycle.
3.3.4. CAR cycle 4: Final reflection. This stage
requires thorough reflection upon previous cycles.
Planning stage – Planning forms an important part
of any entrepreneurial venture and stands at the core
of project management. It is a fact that the failure of
business plans to cope with rapid fluctuations in the
ever-changing business environment (Bang, 1993;
Burke, 2006; Kunene, 2008; Deakins and Freel,
2009; Kariv, 2011) is the precise reason why it is
necessary to identify the most flexible project
management framework, which is able to
accommodate flexible business plans. Therefore, the
focus here should be on identifying project
management activities that are flexible enough to
enhance venture planning.
Resource-gathering stage – The resource-gathering
stage is very important to a successful business
launch (Chrisman et al., 2005; Deakins & Freel,
2009). At this stage, reflection should focus on how
the various stages of the entrepreneurial process can
be disaggregated into smaller WBS to allow for
effective resource allocation at the activity level. A
total system view is required here so the entire
project is accorded priority.
Implementation stage – At this stage, a final review
is conducted to examine how decisions were made
at every previous stage; for example, the impact that
the planning and resource-gathering stages had on
the successful final starting of the business, as well
as the decision-making that went into selecting the
final tools for monitoring and control.
Conclusion
Planning stage – Clearly, planning forms an
important part of any entrepreneurial venture and
stands at the core of project management. The failure
of business plans to cope with rapid fluctuations in
the ever-changing business environment is the precise
reason why it is necessary to use the APM
framework, which accommodates flexible business
plans. The dependency between activities and their
planning was discussed earlier. It is granted that these
dependencies can be managed using a Gantt chart or
a network diagram. However, a lot of effort goes into
maintaining Gantt charts, especially when changes
are happening quickly and frequently. In practice, it
is much more convenient to use a whiteboard with
sticky notes rather than Gantt charts to represent and
visualize the activities that have uncertain solutions.
In this way, it is simple to move the activities
anywhere on the whiteboard and draw connecting
lines between the dependent activities. Different
colors are used to represent the activities for which
teams or individuals are responsible. This technique
was adapted from APM and can be refined,
depending on the complexity of the new business
environment. The WBS is an essential tool in the
planning endeavor as it, firstly, enables the team to
ensure that all of the activities have been identified,
and, secondly, shows which processes have uncertain
solutions.
Resource-gathering stage – The resource-gathering
cycle can benefit from the WBS since resources can
be allocated at the activity level, and activities can
be grouped together for control purposes. Costs can
also be allocated at the activity level and “rolled up”
to the next level; thus, the cost can be determined
for a specified group of processes or for the entire
project.
Implementation stage – Implementation is about
starting the business, as well as monitoring and
controlling it. Processes are controlled by monitoring
Problems and Perspectives in Management, Volume 13, Issue 2, 2015
424
the progress according to the business plan. The
whiteboard and sticky notes can be used effectively
in the implementation and control cycles to monitor
those processes for which the solution is not well
defined, but where the solution can be discovered
through the monitoring and control processes.
Considerable value can be gained in applying project
management techniques to the nine knowledge areas.
In particular, risk and quality management highlights
the importance and benefits of applying project
management techniques in the new venture creation
process. A comprehensive risk plan identifies risks
early, and risk action plans can, thus, be implemented
proactively. It is quite clear that not all of the ten
knowledge areas of project management are
important in the new venture creation process. In the
final analysis, the venture leader and team need to be
aware of the most important knowledge areas of
project management and when it is profitable to apply
them in the new venture process.
It can also be concluded that through action research,
project management aspects can be integrated into
the entrepreneurial process to improve the start-up
success rate. That is, it is possible to improve Total
Entrepreneurial Activity (TEA) in countries like
South Africa (where start-up failure is high) through
the integration of aspects of project management into
the new venture process.
Besides enriching the entrepreneurship literature
theoretically, the important practical contribution of
the paper is that it provides a structured approach/
framework that can be used to enhance new venture
creation success in South Africa and elsewhere.
Interested researchers are encouraged to empirically
test the framework in the creation of new ventures
in various industries and different countries to
validate its applicability and to assist in the possible
refinement of the framework.
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Appendix
CAR cycle 1
Cycle 1 consists of integrating project planning activities
listed in Table 1 into the new venture planning activities
listed in Table 1 above.
CAR cycle 2
Cycle 2 consists of integrating project resource gathering
activities listed in Table 1 into the new venture resource
gathering activities listed in Table 1 above.
CAR cycle 3
Cycle 3 consists of integrating project implementation
activities listed in Table 1 into the new venture
implementation activities listed in Table 1 above.
CAR cycle 4
Cycle 4 consists of reflecting on all the lessons learnt to
determine what works and what does not work in cycles 1, 2
and 3. This forms the basis for providing recommendations
for the integration of project management activities into the
new venture creation process.
Fig. 2. A graphical illustration of the action research iteration framework (based on Abrahamse, 2008)
Diagnosing Action planning
Action taking
Evaluating
Lessons learnt
Diagnosing
Action planning
Action planning
Action taking
Action taking
Lessons learnt
Lessons learnt
Evaluating
Evaluating
Diagnosing
Reflection (learning)
Specifying learning
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