David A. Garvin and Lynne C. Levesque

Corporate budgeting systems favor established businesses because incremental dollars usually provide higher financial returns when invested in known markets rather than unknown ones. New businesses are therefore difficult to finance for long periods, and in times of austerity, they are the first to face funding cuts. In a similar spirit, companies design HR systems to develop executives whose operational skills match the needs of mature businesses-not the strategic, conceptual, and entrepreneurial skills that start-ups require.

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