After entry, then what? An examination of the strategy and performance of minority-owned ventures in the United States construction industry

Entry barriers can prevent or hinder new ventures from penetrating new and existing industries. Minority business enterprises are often undercapitalized and must overcome entry barriers in order to compete. The federal government has assisted the development of minority business enterprises by using its power as a large buyer to encourage the business sector to help implement a variety of social policies, as well as, helping to break the barrier of the "good-ole boy network," which often prevents minorities and other outsiders from taking advantage of opportunities enjoyed by the majority group. Although the amount of research on minority business enterprises has increased in recent years, the strategies they use to compete and factors affecting their performance have been largely overlooked. This dissertation treats minority business enterprises as a special case of small businesses and entrepreneurial ventures in an attempt to examine the relationships between the strategy and performance of minority-owned businesses. The questions under investigation are: (1) Which strategies are used most often by minority business enterprises? (2) Which strategies are the most successful? (3) How effective are minority set-aside programs as a gateway to entry? A typology of strategies of entrepreneurial ventures and small businesses is set forth to examine these questions. This typology identifies the types of strategies that minority business enterprises use as: Anchors, Adventurers, Adaptors, and Amateurs. A mail survey was used to collect data from a sample of minority (MBEs) and nonminority business enterprise (NMBEs) owners in the U.S. construction industry. The results indicate that most minority-owned firms use the Adaptor strategy, followed by the Anchor strategy, followed by the Amateur strategy, followed by the Adventurer strategy. Although most minority-owned businesses use one of the aforementioned strategies, some firms have sufficient capital and access to credit. Thus, a revised typology is offered that includes this group of firms called Amplers. The study does not find that the use of a particular strategy resulted in superior performance relative to the others. Finally, minorities and nonminorities disagree on the effectiveness of set-asides as a gateway to entry. While most minorities perceived set-asides to be useful in getting their businesses started, they expressed frustration with how they are administered by local, state, and federal governments. Moreover, the MBEs and NMBEs disagreed on whether or not these entry barriers exist.