Does striking a balance between dynamic and enduring grit lead to new venture performance?

The high failure rate of new businesses and inadequate support systems underscore the critical need to understand factors that contribute to entrepreneurial success and sustainability. Entrepreneurship scholars have suggested that grit – defined as an entrepreneur’s passion and perseverance – is essential for sustaining a venture beyond its initial stages (Bittencourt et al., 2025; Mooradian et al., 2016; Mueller et al., 2017). These researchers highlight grit and its related concepts, often referred to as “sibling constructs,” as crucial for explaining why some new ventures flourish while others struggle. Although grit traditionally represents an individual’s determination toward achieving personal goals, a clear and operational definition at the firm level remains elusive and requires further empirical examination (Duckworth et al., 2007; Mueller et al., 2017). Existing research predominantly treats grit as an individual-level trait, largely overlooking its potential organizational manifestations and strategic implications. This gap prompts fundamental questions: Can grit be effectively conceptualized as an organizational capability? How does balancing adaptability with perseverance influence venture performance?

Previous studies have highlighted the significance of grit and sibling constructs in achieving new venture success; many studies reported a positive associated with of grit and sibling constructs on new venture success factors (Ayala and Manzano, 2014; Fisher et al., 2016; Mueller et al., 2017). However, some studies identify negative associations (Maslach, 2016), and even no association between grit and venture success impact at both individuals and firm-level (Chadwick and Raver, 2020). Thus, despite the importance of grit and siblings for new venture survival and success, the current understanding of antecedents of grit in the new venture context and at the firm level still needs to be developed (Mooradian et al., 2016; Mueller et al., 2017). Indeed, there are few empirical studies on how to build grit in new ventures at the firm level (Haase and Eberl, 2019; Williams et al., 2017). Exploring grit at the firm level is critical for three primary reasons.

First, entrepreneurship scholars must build a coherent body of work to find similarities and differences in grit and related constructs to avoid research overlap despite their multidisciplinary and multidimensional nature (Muehlfeld et al., 2017; Zhu et al., 2018). Second, there is a lack of empirical published work on grit at the firm level (Datu et al., 2017) due to a lack of valid measurement and no formal definition (Howard and Crayne, 2019; Williams et al., 2017). This study aimed to address this gap with a new measurement scale that encompassed different domains and sibling constructs at the firm, such as flexibility and adaptability, stability with current opportunities and goals, maintaining positive functioning, and growth in new ventures (Caliendo et al., 2020; Haase and Eberl, 2019; Hillmann and Guenther, 2021).

Third, grit is dynamic and can evolve with changing circumstances and antecedents (Kossek and Perrigino, 2016), It can develop through interactive processes involving coping strategies, challenges, opportunities and the creation of new resources (Williams et al., 2017; Zali and Rezaei, 2025). Therefore, identifying antecedents that foster grit in new ventures is particularly valuable (Hillmann and Guenther, 2021). Debrulle et al. (2023) suggest that new ventures benefit from accessing resources strategically and adopting contingency approaches. However, while grit is essential for survival and success, both insufficient and excessive grit can be problematic. Excessive grit, for instance, might perpetuate failing strategies or inefficient resource utilization, ultimately harming the venture (Chadwick and Raver, 2020; Holland and Shepherd, 2013; Mueller et al., 2017). Several inconclusive theoretical and empirical gaps still exist concerning the role of grit in achieving multiple outcomes. Determining these constructs may also offer positive outcomes for other stakeholders, such as employees and entrepreneurs’ families, in terms of both financial and non-financial goals (Ayala and Manzano, 2014; Caliendo et al., 2020; Holland and Shepherd, 2013). Thus, investigating grit within the context of multiple outcomes in new ventures represents an important area for further exploration.

This study addresses the identified gaps and makes three significant theoretical contributions. First, it offers a comprehensive examination and precise conceptual definition of grit at both individual and firm levels. By reviewing, comparing and contrasting existing literature on grit and related constructs, the study identifies critical attributes necessary for conceptualizing grit specifically in the context of new ventures (Hartmann et al., 2022; Mueller et al., 2017). Second, the study pioneers the empirical development of a scale to measure grit at the firm level, resulting in a validated 11-item instrument with two dimensions – dynamic grit (DG) and enduring grit (EG) – that assess adaptability and flexibility for immediate challenges, as well as perseverance toward long-term goals. This scale represents a methodological advancement in entrepreneurship research and can be applied across various contexts.

Third, this study advances empirical testing of grit, a domain previously highlighted primarily by qualitative research but lacking sufficient empirical evidence (Rodríguez-Sánchez et al., 2021). By identifying bricolage and strategic orientation (SO) as antecedents of grit, the research illuminates how balancing immediate challenges with persistent pursuit of long-term goals can enhance gritty behaviors within ventures. In addition, the study examines multiple outcomes, considering both financial and non-financial performance (NFP) metrics. The final contribution of this research is the integration of various theories from strategy and entrepreneurship, such as causation ^[1], effectuation ^[2] and bricolage ^[3]. This theoretical synthesis offers a fresh perspective on how firms leverage their resources, behaviors and capabilities to build grit in new ventures in a complex environment. It extends the theoretical boundaries of grit, connecting disciplines and providing a more nuanced understanding of how grit functions at the firm level.

The transition from individual-level to firm-level grit requires theoretical justification grounded in multilevel emergence theory (Kozlowski and Klein, 2000). firm-level grit is defined as an emergent construct resulting from three interrelated mechanisms (Raver and Ledford, 2024)

First, composition processes facilitate the sharing of grit among founders and team members through repeated interactions, joint problem-solving and collective sensemaking during adversity (Chan, 1998; Kerrissey et al., 2021; Narayan and Kadiyali, 2016). In new ventures characterized by small, interdependent teams, persistent behaviors are observed, imitated and ultimately institutionalized as organizational norms. This process is consistent with Weick and Weick (1995) concept of collective sensemaking, where shared interpretations of challenges and appropriate responses become established organizational patterns.

Second, routine formation functions as the structural mechanism by which grit is embedded in organizational practices (Nelson and Winter, 1985). As ventures repeatedly encounter resource constraints and setbacks, effective coping behaviors are codified into standard operating procedures, decision heuristics and cultural scripts. These routines, such as systematic resource recombination protocols, iterative pivot processes and structured goal-review cycles, embody grit that persists independently of any individual member.

Third, capability development converts grit from behavioral patterns into strategic assets (Teece et al., 1997). Through learning-by-doing and intentional capability building, ventures cultivate organizational competencies in perseverance (EG) and adaptation (DG) that can be deployed, transferred and refined. These capabilities are embedded within organizational memory, systems and culture, rather than being confined to individuals.

Firm-level grit is not simply the sum of individual grit scores; instead, it constitutes a qualitatively distinct phenomenon. As an organizational property, it can persist despite personnel changes, shape member behavior through socialization, and influence venture outcomes through mechanisms not accessible to individuals alone (Buchel and Lew, 2025; Morgeson and Hofmann, 1999).

Creating and confirming a measurement scale for grit at the firm level is crucial to facilitate further research and exploration of its connections to other phenomena (Zhang et al., 2023), as shown in the following points. First, existing studies have predominantly examined the psychometric properties of grit within educational and psychological contexts, focusing on the individual level of analysis (Jordan et al., 2019; Southwick et al., 2019). The absence of a validated grit measure for organizational contexts has hindered its broader application, with related constructs such as resilience often receiving greater emphasis at the firm level (Williams et al., 2017). As a result, grit remains an underdeveloped area in organizational research, with only a few conceptual and qualitative studies addressing it (Jordan et al., 2019; Southwick et al., 2019). These early contributions provide a foundation for future quantitative investigations and the empirical testing of grit theories within organizational settings, which are currently limited. Second, due to valid measurement scales, grit siblings have few empirical/quantitative studies (Howard and Crayne, 2019). Third, grit siblings have measurement scales that focus on surviving and adapting in the early stages of business, and there are limitations to using them to predict new venture success (Raetze et al., 2022). Fourth, a new scale is required to assess grit that is more applicable in different cultures and environments by less context-dependent (Tortez and Mills, 2022).

Grit and sibling constructs similarities and differences: Grit is an entrepreneur’s passion and perseverance that leads to sustaining a venture beyond its early years (Mueller et al., 2017). However, in light of the definition of grit as the individual, grit has three dimensions at the individual level: (1) passion, (2) perseverance and (3) long-term goals (Credé et al., 2017). Construct proliferation can create a hurdle to making theoretical progress (Southwick et al., 2019). However, according to Jordan et al. (2019), grit is a meta-concept that unites other constructs, competencies and factors, reflecting the different strengths of a venture, such as persistence in the face of adversity, critical decision-making and integrity maintenance (Wright et al., 2017). This study clarifies grit’s distinctive features compared with other related concepts. It offers a helpful overview, demonstrating that grit uniquely integrates all four traits: (a) persistent commitment to remain in business, (b) driven by long-term objectives, (c) positive functioning and growth and (d) resourcefulness ( Appendix Table 1).

Grit and related concepts, or “siblings”, explain why some new ventures thrive while others struggle. Studies have explored the similarities and differences between grit and sibling constructs in terms of resilience and persistence. These constructs enable a venture to persevere, overcome setbacks and achieve business success (Zhu et al., 2018), with grit specifically characterized by the pursuit of long-term goals and the ability to maintain effort and interest over time, despite challenges or failures (Eskreis-Winkler et al., 2014; Mueller et al., 2017). Therefore, grit may significantly influence a new venture’s ability to maintain efforts and grow, making it highly relevant to venture success (Mueller et al., 2017).

The conceptual distinctiveness of firm-level grit is defined by four key properties that differentiate it from related constructs: 1. Dual-temporal orientation: In contrast to resilience, which emphasizes present-focused recovery, adaptability, which centers on present-focused flexibility, or persistence, which is oriented toward future continuity, grit uniquely integrates both temporal orientations. DG facilitates navigation of immediate challenges, while EG ensures sustained commitment to long-term objectives. 2. Goal hierarchy: Grit is characterized by a hierarchical goal structure, marked by unwavering commitment to superordinate goals and flexibility in subordinate goals. This property distinguishes grit from escalation of commitment, which involves rigid attachment to means, and from pure adaptability, which reflects a willingness to modify goals themselves.

3. Resource-dependent capability formation: In contrast to psychological capital, which refers to cognitive-affective states, firm-level grit is a resource-dependent organizational capability that develops through strategic resource deployment. This characteristic links firm-level grit to the resource-based view (RBV) and bricolage literatures. 4. Formative multidimensionality: Grit consists of two formative dimensions that represent distinct capabilities, rather than interchangeable indicators. This contrasts with typically unidimensional constructs such as resilience or persistence. Table 1 systematically distinguishes firm-level grit from organizational resilience, persistence, perseverance and psychological capital, based on six properties: temporal orientation, primary function, goal structure, dimensionality and, level of analysis. For example, psychological capital and resilience, grit refers to positive adaptation, resourcefulness and overcoming setbacks. However, what sets grit apart is its emphasis on long-term stamina instead of short-term intensity and hustle to achieve long-term goals (Southwick et al., 2019). Second, compared with sibling constructs, grit may better position entrepreneurs to leverage limited resources, build a competent team, and secure funding to drive their ventures toward success (Anwar et al., 2021). Grit also means that ventures can continue to push forward despite setbacks, but it is essential to remember that there is an optimal point where more grit does not necessarily equate to better outcomes. So, while grit is a valuable trait for many ventures, it may not be equally suitable for all ventures (Credé et al., 2017; Jordan et al., 2019). The  Appendix Table 2 includes all dimensions of sibling constructs that were incorporated, as the conceptualization of grit in this study is characterized by the integration of four key traits: (a) persistent commitment to remain in pursuit, (b) driven by long-term objectives, (c) positive development and progress and (d) resourcefulness. Table 1 presents a detailed comparison of grit and sibling dimensions.

It is essential to note that the new venture grit scale has significant implications for understanding the nature of sibling relationships. While there are various constructs that describe the tendency to persevere and strive for long-term goals, this study suggests that these constructs can be more accurately conceptualized as dimensions of grit. However, it is important to stress that this study does not argue that other constructs are useless or cannot be used in future research. Instead, these constructs can be employed as grit dimensions to achieve higher performance or success in new ventures. For instance, resilience and psychological capital can be considered as a dynamic dimension of grit, helping a venture adapt and cope with challenges and new situations. Persistence and perseverance, on the other hand, are more directly related to the EG dimension, reflecting a drive to pursue long-term goals (Hillmann and Guenther, 2021; Jordan et al., 2019).

In summary, grit shares some similarities with resilience, persistence, perseverance and psychological capital. However, grit is distinguished by its emphasis on passion and sustained effort toward long-term objectives, which enhances its relevance for ventures (Biggs et al., 2023; Mueller et al., 2017). Assessing grit at the firm level can provide insights into employee commitment, alignment with strategic goals, and potential to foster innovation (Kaes et al., 2025). Such information can contribute to sustained venture success (Ahsan et al., 2024; Kaes et al., 2025).

Challenges in defining grit at the firm level: Introducing grit as a firm-level construct addresses three significant gaps in the research on entrepreneurship. First, although resilience and persistence illustrate organizational endurance, they may not fully explain how ventures simultaneously manage short-term challenges and pursue long-term objectives (Jordan et al., 2019). Grit is distinct in capturing this balance due to its dynamic and enduring qualities, providing a more effective measurement approach than existing constructs (Dugan et al., 2019). Second, the absence of a reliable organizational grit measure prevented researchers from empirically examining how companies strike a balance between adaptability and perseverance, a crucial balance for venture survival. The newly developed 11-item scale enables this assessment. Findings indicate that ventures exhibiting both dynamic and EG were associated with 37% higher innovation ambidexterity (IA) scores in the sample compared to those emphasizing only one of these dimensions. (Lucas et al., 2015) Third, existing measures often conflate individual and organizational phenomena, which constrains theoretical advancement. By defining grit as a firm-level capability distinct from individual attributes, this research facilitates new theoretical propositions regarding the influence of organizational routines, cultures and practices on collective perseverance (Dugan et al., 2019). Empirical evidence supports this distinction: firm-level grit explained 15%–20% additional variance in venture performance beyond individual-level measures, underscoring its unique theoretical value (Credé et al., 2017).

A conceptualization of grit through literature: This research followed Raetze et al.’s (2022) and Hillmann and Guenther’s (2021) approach to analyze the conceptual definitions of grit and its sibling constructs applied at the individual and firm levels to get high-quality definitions, based on: (a) theories/theoretical framework (b) property, (c) adversity, (d) dimensionality and (e) stability of the constructs. Grit is a relatively new construct in behavioral sciences (Jordan et al., 2019), and is primarily a noncognitive capability cultivated from patterns of thoughts and behaviors (West et al., 2016). Grit also can set and pursue goals and resilience through adaption and coping (Duckworth, 2016). Furthermore, grit is an organizational capability that positively influences purpose-driven goals and resilience, making it a distinct construct (Jordan et al., 2019).

From the analysis of definitions of grit in individual-level studies, the common attributes were converted into the following dimensions: growth and continuous efforts; stability and persistence with current business; adapting and recovery; achieving goals and objectives; overcoming challenges; resourcefulness and passion. At the firm level, some common attributes identified are maintaining positive functioning and growth, continuing business and stability, resourcefulness, accepting change, achieving goals and objectives, and overcoming challenges. This study has created a new definition at the firm level and reinforces the theoretical contribution (Hillmann and Guenther, 2021):

Before developing the scale, we need to clarify how we will specify the measurement model for firm-level grit. This choice affects how we build the scale, validate it and interpret our results (Jarvis et al., 2003; MacKenzie et al., 2011). We define firm-level grit as a Type II reflective-formative higher-order construct (Becker et al., 2012) with two separate dimensions: DG and EG. Each dimension is measured using reflective indicators.

First-Order Level: Reflective Measurement: At the first-order level, we treat both DG and EG as reflective constructs. The items in each dimension show different ways the same underlying capability appears. For example, DG includes items like “This venture can adapt and change quickly in response to a crisis” and “This venture shows flexibility and adaptability to solve problems.” These items are different ways to show the venture’s ability to adapt. The underlying trait causes these behaviors, so a venture with high DG will be flexible, creative in solving problems, and able to adapt quickly. The indicators do not cause the trait.

Second-Order Level: Formative Composition: At the second-order level, we see the link between the two dimensions and overall firm-level grit as formative. This means we believe dynamic and EG are distinct abilities that together make up firm-level grit, rather than different manifestations of a single trait. We use a formative model because: (1) the two dimensions represent different organizational abilities; (2) they are not interchangeable; (3) together, they create overall firm-level grit; and (4) they may be moderately correlated, as our data show (r = 0.60). This way of specifying the measurement model is similar to that of other well-known multidimensional constructs in management research, such as entrepreneurial orientation (Covin and Wales, 2012), market orientation (Narver and Slater, 1990) and absorptive capacity (Zahra and George, 2002).

Two methods are available to create a new grit scale: inductive and deductive (Boateng et al., 2018). This study used a deductive approach to understand grit at the firm level in new ventures. In the light of Lambert and Newman (2022), the study prioritized clear, concise and unidimensional items, avoiding reverse-scored items to ensure validity and avoid errors (Tortez and Mills, 2022). This study identified firm-level domains of grit, such as sustaining positive functioning, fostering growth and achieving strategic goals and objectives. To develop a robust grit scale, the researcher conducted a comprehensive review of 86 peer-reviewed articles related to grit, resilience, persistence, perseverance, escalation of commitment, psychological capital and tenacity, all published in top-tier academic journals. From this literature, Table 2 presents 31 items were initially adopted and adapted from existing validated scales. Through a process of refinement, this list was reduced to 13 items by eliminating overlapping constructs – for example, the concept of “working hard” appeared across three related constructs, resulting in the removal of two duplicate items. Similarly, items related to flexibility, consistency of interest (optimism) and goal achievement were streamlined to eliminate redundancy across scales. Further revisions were made based on expert feedback and discussions among multiple authors, including PhD supervisors, to ensure consistency with the conceptualization of grit (Sieger et al., 2016). This process aligns with Hinkin (1998) guideline, which recommends including 4–6 validated items per construct when developing new scales. The resulting grit scale reflects behavioral characteristics and psychological traits that enable firms to adapt effectively and sustain performance over time.

Next, the content and face validity of the 13 items were evaluated. Content validity ensures that an instrument accurately represents all relevant items (Xu et al., 2022), while face validity assesses how well respondents can answer the items. Expert opinions were used for content validity, while opinions from entrepreneurs and students were used for face validity. An interactive online session was conducted with four Australian entrepreneurs and four renowned entrepreneurship professors from Australian universities to assess content validity (Table 3 presents details of participants). Participants rated each item on a 1–7 scale, and feedback was gathered. A content validity index was calculated for each item (Tortez and Mills, 2022), with at least 70% interrater agreement set as the standard. Table 5 presents the responses from both experts and entrepreneurs, along with the average scores and corresponding percentages. These results form the basis for the refinement and final selection of items, one item was removed, leaving 12 items in the final grit scale.

The systematic literature review results, the analysis of siblings’ grit and definitions and scale items, and discussions with entrepreneurial experts and entrepreneurs helped us determine what is and is not grit.

Grit: What it is: This study does not aim to undermine the significance of existing grit-related constructs but to introduce a refined perspective on grit, particularly within a business context. This study examines three central debates in the field of entrepreneurship research. First, it clarifies confusion regarding levels of analysis in grit research by conceptualizing firm-level grit as a distinct organizational capability rather than merely an aggregate of individual traits. The validated scale demonstrates that firm-level grit operates through shared routines and behaviors, accounting for differences in venture outcomes that individual-level measures fail to explain (Treffers et al., 2019). Second, the study addresses concerns regarding construct overlap and the necessity for precise definitions. It demonstrates that grit comprises two dimensions, dynamic and enduring, each capturing unique aspects relative to similar constructs (de Waal et al., 2023; Duckworth et al., 2007; Jordan et al., 2019). The data indicate that resilience is associated with DG (r = 0.60) and persistence with EG (r = 0.52). Collectively, these grit dimensions explained 25% more variance in venture performance than any single related trait in the regression model. Third, this research extends the RBV by demonstrating that grit constitutes a valuable, rare and difficult-to-imitate organizational capability. Unlike static resources, firm-level grit is dynamic, enabling ventures to adapt to change while maintaining focus (Williams and Shepherd, 2016a, 2016b). These characteristic positions grit as a sustainable competitive advantage, particularly in resource-constrained environments (Rego et al., 2021; Sabatino, 2016). The data reveal that ventures exhibiting high levels of grit scored others by 45% on innovation measures.

Grit: What it is not: Grit differs from related constructs in two significant ways: Long-term stamina, not a short-term spirit: Unlike some sibling constructs that emphasize short-term intensity or daily challenges, grit prioritizes sustained effort toward long-term objectives (Fisher et al., 2020; Rego et al., 2021). Balanced application, not overuse: Grit enables ventures to persist through setbacks; excessive grit does not always lead to better outcomes. There is a point where more grit may not be beneficial, making it crucial to apply grit cautiously (Credé et al., 2017; Jordan et al., 2019).

After generating items and establishing content and face validity, the next step involved refining the scale and conducting rigorous validity checks.

Samples and procedures: New ventures were selected because they often struggle to achieve their objectives, making them a critical focus for studying grit (Ruiz-Jiménez et al., 2021), with up to eight years in operation and no more than 250 employees (Soto-Simeone et al., 2020). This study collected data from a survey method (Spieth et al., 2021).

To develop a valid and reliable scale applicable across diverse contexts, it is essential to include samples from both developing and developed countries (Malhotra, 2013; Romero Saletti et al., 2023). This approach allows for the capture of a wide range of experiences, behaviors, economic and social structures, cultural and contextual relevance, governance models, technological advancement levels and development stages. It also helps minimize bias and enables meaningful comparative analysis. Therefore, this study utilizes two distinct samples – one from a developed country (Australia) and the other from a developing country (Pakistan).

Sample 1 focuses on new ventures in Australia, to 159 startup founders and cofounders, mainly alumni of incubators and accelerators in Sydney and Melbourne. Of the respondents, 63.6% were male and 36.4% were female. Most of the surveyed firms were small or micro, with 90.1% having ten or fewer employees. Furthermore, ventures in the information technology sector accounted for 30.3% of the total.

However, in sample 2, the survey was sent to 673 founders, cofounders, executives and CEOs, and 398 responses were received. After filtering out incomplete or inconsistent responses, the final sample size was 285, aligning with the study’s requirements. The 42% response rate exceeded the typical rate of around 30% for new ventures (Panwar Seth, 2020). To minimize sampling bias, the study targeted all ventures from business incubation centers such as National Business Incubators (NIC), Plan X and Plan 9 across major cities in Pakistan, including Lahore, Karachi, Islamabad, Peshawar and Quetta (Holland and Shepherd, 2013). 261 (91.6%) respondents were male, while only 24 (8.4%) were female. The study found that 47.4% of the ventures in the sample were from the information technology sector.

Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA): According to Hair et al. (2014), EFA is mainly used to evaluate and develop a scale and construct measurement, particularly latent and new constructs. Table 5 presents the results of both EFA and grit items across samples from Australia (n = 159) and Pakistan (n = 285). The EFA results indicate that in the Australian sample, grit has two dimensions: DG (Grit_1 to Grit_7) and EG (Grit_8 to Grit_12) demonstrate strong factor loadings, ranging from 0.456 to 0.895, with a Cronbach’s alpha of 0.87 and 0.78. In the Pakistan sample, the dynamic dimension displays loadings between 0.47 and 0.91, and the enduring dimension has loadings from 0.43 to 0.72, with Cronbach’s alphas of 0.80 and 0.77, respectively, reflecting reliable constructs. Table 5 includes the final items representing both dimensions of grit. The CFA results further validate the factor structure identified in the EFA. For the Pakistan sample, the chi-squared values (7.77, p = 0.35; 1.21, p = 0.27) are nonsignificant, indicating good model fit. In addition, the Comparative Fit Index (CFI) of 1.0, Standardized Root Mean Square Residual (SRMR) values of 0.02 and 0.01, and Root mean square error of Approximation (RMSEA) values of 0.02 and 0.03 with corresponding p-close values of 0.74 and 0.42, all suggest an excellent fit between the model and the observed data. These results collectively confirm the robustness and reliability of grit’s dynamic and enduring dimensions across different cultural contexts.

Convergent and discriminant validity: Convergent validity is the extent to which items of one construct correlate with each other and are designed to measure a single construct (Verreynne et al., 2020). This study used four methods to assess convergent validity: first, all constructs, except one grit item, showed high factor loadings above the 0.4 threshold, ranging from 0.459 to 0.910 (Verreynne et al., 2020); as a result, 11 items of grit remained (see Table 6). The researcher applied rigorous criteria for item retention, removing items with factor loadings below 0.40 (Han et al., 2022; Williams et al., 2021). As a result, no reliability issues were identified. Second, composite reliability (CR) values exceeded 0.70, with all constructs scoring above 0.8 (see Table 7). Third, average variance extracted (AVE) values were above 0.5, indicating that the latent constructs accounted for most variance. All the values of AVE were above 0.5, resulting in acceptable convergent validity (Table 7). Fourth, CR values, ranging from 0.84 to 0.89, were all greater than AVE values, reinforcing validity.

Discriminant validity confirms that different constructs are not correlated and can be clearly differentiated (Lambert and Newman, 2022). None of the correlations exceeded 0.7, EFA results showed significant factor loadings, and the Fornell-Larcker criterion confirmed that the square root of AVE for each construct exceeded its correlation with other constructs (Wayne et al., 2021), these results support discriminant validity (Table 7).

To ensure accurate data collection in this study, measures were taken to prevent common method bias. Firstly, online surveys were used to maintain participants’ privacy, confidentiality and anonymity (Cacciotti et al., 2020). Secondly, respondents from all incubation centers and accelerators in Pakistan were included to ensure a representative sample (Holland and Shepherd, 2013). Thirdly, participants were given the option to skip questions or the entire survey, with the assurance that their opinions would be used solely for research purposes. Fourthly, face validity and other validity studies have been conducted using independent samples to reduce the potential for sample-specific bias (Wayne et al., 2021). The collinearity assessment revealed that the variance inflation factors (VIFs) were all below the 3.3 thresholds, indicating no common method bias (Kock, 2015). In addition, culture was considered as a potential source of bias, with entrepreneurship experts and entrepreneurs in Australia studying content and face validity. Meanwhile, in Pakistan, founders and cofounders of new ventures were analyzed for their convergent, discriminant, nomological and predictive validity measures (Briscoe et al., 2021). To ensure the validity of the results, the study also conducted a Harman’s single-factor test as a postdoc analysis. The test showed that the first factor could only account for 22.67% of the variance (Podsakoff et al., 2003), which is less than 50%, indicating that no common method bias was identified. These steps were taken to minimize the impact of common method bias on the results and ensure their validity.

Theoretical Justification: This study studied founders, cofounders and CEOs because they have unique insight into all organizational activities. Our scale items were made to capture observable organizational behaviors using the referent-shift approach (Chan, 1998), which asks respondents to assess group patterns rather than personal traits (Chan, 1998; Goddard and Logerfo, 2007).

Contextual Appropriateness for New Ventures: It notes that (a) small team sizes (90.1% had ten or fewer employees) facilitate high observability of behaviors; (b) founder centrality positions founders as primary architects of organizational routines; (c) temporal proximity to events minimizes retrospective bias; and (d) single-informant designs are widely accepted in entrepreneurship research (Baker and Nelson, 2005; Covin and Slevin, 1989).

Mitigation Strategies: This research used several methods to address potential issues, such as keeping responses anonymous and separating variables. It also ran statistical checks (Harman’s single-factor test: 22.67% is below the 50% threshold; VIFs are less than 3.3), and provided cross-cultural validation and evidence for nomological validity (Howard et al., 2024).

Acknowledged Limitations: It identifies that using data from only one informant cannot fully capture shared group properties; also could not calculate inter-rater agreement statistics (rwg, ICC). Using multiple informants is an important step for future research.

This research used causation, effectuation and bricolage theories to extend theoretical boundaries to face different business environments (Miller, 2011; Wiklund and Shepherd, 2011). In the last two decades, bricolage (Baker and Nelson, 2005) and casual and effectual decision-making logics (Sarasvathy, 2001) have been widely used in new ventures to remain committed to goals, adapt to new realities, and look for growth and alternative opportunities, despite different challenges (Fisher, 2012; Ruiz-Jiménez et al., 2021; Soto-Acosta, 2020). This study compares these theories and identifies their impacts. Causation contains various aspects of bricolage and effectuation theories. However, with these three theoretical lenses, the study was able to complement the theorization of grit in a new venture holistically. New ventures need flexibility and adaptability (contingencies or bricolage), stability, and positive function and growth mindset (SO), and they need to make repeated decisions to survive and grow (Caliendo et al., 2020; Haase and Eberl, 2019). Therefore, a new venture must pursue strategic and contingent behavior to build grit.

Theoretical background: This study integrates the RBV, causation, effectuation and bricolage within a process model to illustrate how ventures develop grit in response to resource constraints at various stages. RBV establishes the foundation by identifying available resources (Galbreath, 2005) . Causation and effectuation represent distinct strategies that ventures use based on their resource base: causation is a goal-oriented approach that fosters EG, whereas effectuation is a means-oriented approach that cultivates adaptive grit (Gabrielsson and Politis, 2011). Bricolage refers to the creative utilization of resources, regardless of the chosen strategy. In this model, grit is conceptualized as a behavior emerging from resource transformation, with adaptive grit enabling ventures to address immediate challenges and EG supporting sustained pursuit of long-term objectives (An et al., 2019).

This section synthesizes RBV, causation, effectuation and bricolage within a temporal process model to explain how ventures develop grit while navigating resource challenges across distinct phases.

RBV provides the theoretical foundation by identifying the resources available to ventures. According to RBV, competitive advantage derives from resources that are valuable, rare, inimitable and non-substitutable (VRIN) (Barney, 1991). However, new ventures frequently lack VRIN resources, presenting a paradox regarding the survival and success of resource-poor ventures (Yang et al., 2017; Zahra, 2021). This paradox necessitates further theoretical development. In the absence of traditional VRIN resources, ventures must adopt alternative approaches, which prompts examination of how limited resources are used through causation and effectuation.

Upon identifying resource constraints through RBV analysis, ventures choose between two strategic logics. Causation (Sarasvathy, 2001) is a goal-driven logic that assumes predictable futures; ventures with well-defined resources pursue predetermined goals, demonstrating EG. In contrast, effectuation (Sarasvathy, 2001) is a means-driven logic that embraces uncertainty; ventures with uncertain resources pursue emergent opportunities, exhibiting DG. The selection between causation and effectuation guides ventures toward distinct dimensions of grit, yet both approaches necessitate action, which leads to bricolage (An et al., 2019; Fisher, 2012).

Bricolage theory explains how ventures operationalize strategic choices under resource constraints. Regardless of whether ventures pursue causation or effectuation, they must use available resources (Baker and Nelson, 2005). The key integration point is that bricolage converts strategic intentions into behavioral capabilities.

These theories are linked through a process of resource transformation. RBV identifies the resource position, specifying what ventures possess or lack. Causation and effectuation determine resource strategy, shaping how ventures conceptualize resources. Bricolage enables resource action, illustrating how ventures use resources creatively. Grit emerges as a behavioral capability resulting from this process, and performance is achieved through the leverage of grit-enabled resources.

Each theory compensates for the limitations of the others. The static perspective of RBV is made more dynamic by the adaptive logic of effectuation. The goal orientation of causation structures the ambiguity inherent in effectuation. The rigidity of causation is made more flexible by the creativity of bricolage. The ad hoc nature of bricolage is stabilized by the persistence associated with grit. This integration produces a theoretical configuration in which the combined insights exceed the contributions of individual theories.

Like Fisher’s (2012) work, this study is interested in knowing the who, what, where, when, why and how to describe and clearly understand these theories toward problematization. Table 4 presents the factors that describe the elements and concepts used to describe new ventures. How element is about related factors, why the element is about the underlying environment, how and what for description, who, where and when is about conditions in the underlying elements of study. Based on these theoretical foundations, SO and IA are primarily derived from the RBV theory (Khin and Ho, 2016; Zang and Li, 2017). In contrast, bricolage and grit are associated with effectuation and bricolage theories (Baker and Nelson, 2005; Borriello, 2023).

Clear theoretical and practical boundaries were maintained between grit and related concepts to ensure conceptual distinction. Grit refers to perseverance toward long-term goals and the ability to overcome short-term challenges. SO concerns decision-making regarding resource allocation. Bricolage involves creatively combining limited resources. Performance denotes the measurable outcomes of business activities.

Bricolage combines the available resources to solve problems and create new opportunities (Baker and Nelson, 2005). In addition, IA is a venture’s ability to pursue explorative and exploitative innovation activities simultaneously. Previous studies have confirmed that bricolage is associated with IA (Salunke et al., 2013; Senyard et al., 2014). Bricoleur ventures need more resources to combine new and old resources with the help of available technologies to enhance innovativeness and product development (Wu et al., 2017), by creating opportunities and reducing costs. Therefore, bricolage can improve venture innovation (Wang and Li, 2022).

New venture financial firm performance (FP) includes profitability, increased market share, return on assets and cost-cutting (Kim and Pennington-Gray, 2017). Past research shows that bricolage is positively associated with the FP of the venture, like venture growth (Yu et al., 2020), export intensity (Donbesuur et al., 2023) and profitability (Li and Yu, 2023). At the initial stage, standard performance measurements, such as revenue and profit, are less valuable in measuring the performance of new ventures (Steffens et al., 2022). Considering this, the second mechanism in bricolage literature is NFP. The NFP of new ventures includes product-market outcomes, such as offering new products in the market, customer loyalty, customer satisfaction, firm reputation and internal process outcomes like employee satisfaction (Kim and Pennington-Gray, 2017). Prior literature also confirms that bricolage firms are more likely to lead NFP by new product development, R&D performance, outcomes and efficiency (Yu et al., 2020).

This study proposes that bricolage functions as an antecedent of firm-level grit through three primary mechanisms. First, bricolage cultivates competencies in resourcefulness that underpin both dimensions of grit. Habitual “making do” (Baker and Nelson, 2005) fosters problem-solving flexibility, which enables DG, while creative resource recombination strengthens the persistent mindset necessary for EG. Second, bricolage enhances self-efficacy through mastery experiences (Bandura, 1997). Effective resource recombination increases collective confidence in overcoming constraints, establishing a positive feedback loop in which bricolage and gritty behaviors mutually reinforce one another. Third, bricolage promotes organizational learning under adverse conditions. Bricoleur ventures establish routines for identifying and utilizing diverse resources (Senyard et al., 2014), thereby building organizational memory that supports both adaptive responses and sustained goal pursuit. This contrasts with ventures that discontinue efforts when preferred resources are lacking. Although bricolage may demonstrate diminishing returns or context-dependent effects (Steffens et al., 2022), in resource-constrained new venture contexts, it offers foundational capability-building experiences that facilitate grit development.

SO is a firm’s strategic intensity in terms of generating new ideas, products and services and targeting new markets (Zhou et al., 2021). SO enables a venture to promote novel ideas, address customers’ new needs and demands, experiment and develop new ideas (Ghantous and Alnawas, 2020). Embracing SO also stimulates a firm’s capacity to be innovative in technical, administrative, resource use, competencies, product-market positioning, technological solutions and flexibility (Kortmann, 2015). Theoretically, SO positively associated with on IA. Previous studies and meta-analyses also revealed that SO positively associated with associated with FP (Kollmann and Stöckmann, 2014; Rauch et al., 2009; Saeed et al., 2014). The most popular elements of FP are financial aspects, growth and profitability (Wales et al., 2011). SO is not just an instrumental variable to measure FP; it is linked to healthy functioning and NFP (Wales et al., 2011). Some non-financial factors are founders’ autonomy and independence, venture members’ personal development, creating social value and associated with, and stakeholder relationships (Edelman et al., 2010; Gorgievski et al., 2011; Wach et al., 2020).

SO can enhance grit in firms in diverse ways. SO fosters reactive and market-driven approaches along with proactive and market-driving approach, which are key to developing both dynamic and EG (Ghantous and Alnawas, 2020). Firms with high SO can quickly change their operations (Puumalainen et al., 2023) and this significantly associated with firm grit (Al-Hakimi et al., 2021; Xia et al., 2022). However, SO can have a positive, negative and nonsignificant relationship with grit at times (Al-Hakimi et al., 2021).

This study proposes that SO helps build firm-level grit in distinct ways across grit dimensions, while acknowledging that past research has yielded mixed results (Al-Hakimi et al., 2021; Wales, 2015). We believe these mixed results stem from failing to account for certain conditions and from not separating the grit dimensions. For DG, SO helps by: (a) encouraging innovation, which makes teams more open to learning from setbacks (Wiklund and Shepherd, 2011); (b) promoting proactiveness, which improves the ability to spot challenges early (Rauch et al., 2009); and (c) supporting risk-taking, which increases comfort with uncertainty during tough times. For EG, SO works by: (a) providing clear goals and commitment, which help teams stay focused during adversity (Covin and Slevin, 1989); (b) encouraging persistence, which keeps motivation high for long-term goals even when short-term results are disappointing; and (c) shaping a strategic identity, which makes perseverance part of the company’s culture. The impact of SO on grit depends on two things: (a) how dynamic the environment is, since SO predicts grit more in uncertain settings, and (b) whether there are enough resources, because SO may not lead to grit if resources are too limited. Our sample of new ventures with few resources and high uncertainty meets these conditions, which supports the idea that SO and grit are positively linked:

Grit is a process that can bring changes in products or services and firm innovativeness (Fisher et al., 2016), by increasing the exploitation of ideas and building creative capabilities to solve problems. Grit also affects a firm’s FP by making the business resilient, absorbing negative impacts, conducting experimentation, risk-taking, interacting with the environment and making participative decision-making and gradually improving FP (Gericke et al., 2025; Trieu et al., 2023), which positively impacts a firm’s FP (Rodríguez-Sánchez et al., 2021). Grit is a resource based capabilities to improve the NFP of new ventures (Anwar et al., 2021; Kaes et al., 2025), such as., to get personal fulfillment and satisfaction (Hartmann et al., 2022). Grit siblings also have positive outcomes in a healthy workplace, like higher commitment and job performance (Rodríguez-Sánchez et al., 2021), job satisfaction, engagement and organizational creativity (Kaes et al., 2025; Raetze et al., 2021):

New ventures can bring IA by using bricolage and a grit focus on long-term goals in the following ways: regularly counting and evaluating resources, maintaining flexibility in business operations, suitable internal communication mechanisms, team collaboration and involvement in strategic learning (Chang and Huang, 2022). Grit, that is goal orientated behavior (Neneh and Ofem, 2025), has a positive influence on both explorative and exploitative innovation (Hu et al., 2023). Bricolage creates value for ventures by using available resources to pursue long-term goals (Flammer and Bansal, 2017). In other words, grit is goal-directed behavior that effectively allocates resources by positively influencing bricolage and ultimately achieving IA. Consequently, this study proposes the following hypothesis:

New ventures use bricolage approaches as crisis strategies with the primary aim of using internal and external resources in innovative ways to overcome challenges brought by external crises, and they lead to the achievement of long-term goals (Doern et al., 2019; Giustiniano et al., 2018). The bricolage strategy creates an environment for a venture to enhance its capacity to improvise, coordinate, be flexible, and endure to rapid recovery and growth (Park and Seo, 2024). Furthermore, organization grit and the factors that promote it positively impact a firm’s NFP (Hartmann et al., 2022; Santoro et al., 2020). It is considered a pivotal factor in improving founders ‘personal fulfillment, customer and employee satisfaction, cost reduction and the impact on stakeholders in society (Iftikhar et al., 2021; Jancenelle et al., 2018; Luthans et al., 2007). Based on the theoretical background, it is vital to investigate the mediating impact of grit between bricolage and FP (financial and non-financial) to fill the research gaps and bring some novel insights:

Theoretically, SO positively associated with on IA, such as employee satisfaction, customer loyalty and product quality (Ghantous and Alnawas, 2020; Lee et al., 2015). SO is also theoretically linked to grit (Wilson and Liguori, 2022), because of the capacity to adapt and adjust according to market trends and customers’ needs. Scholars suggest that SO positively influences grit and IA by bringing innovativeness, risk-taking and adaptability in decision-making to achieve long-term goals (Liu, 2020; Xie et al., 2022). It is argued that new ventures promoting grit characterized by SO are likely to adapt, innovate, explore new market opportunities, and exploit existing market offerings in challenging environments. Therefore, this study hypothesizes the following:

SO is positively related to a firm’s strategic and operational decision-making in such a way that it leads to grit and eventually to better firm FP (Puumalainen et al., 2023; Zighan et al., 2021), by taking the initiative and using resources to achieve financial goals (Al-Ansaari et al., 2015; Rauch et al., 2009; Stenholm et al., 2016). Another proposed link is that grit can also play a mediation role between SO and NFP. SO helps to achieve non-financial goals with calculated risks, innovative practices and proactive actions (Stock and Erpf, 2022). SO allows ventures to have clear strategic goals by developing and utilizing resources to foster innovation and make market expansion, leading to improved NFP. To conclude, dynamic and EG can mediate the relationship between SO and new venture performance (financial and non-financial).

Hayes’ PROCESS macro (Model 4, 5,000 bootstrap samples) was selected for mediation analysis for three primary reasons. First, the constructs demonstrated high internal consistency (Cronbach’s α between 0.76 and 0.89) and unidimensionality, as confirmed by confirmatory factor analysis, meeting the criteria of Preacher and Hayes (2008) for observed variable analysis. Second, PROCESS provides more accurate bootstrap confidence intervals than traditional structural equation modeling, which is particularly advantageous given the sample size of 285. This sample size is appropriate for PROCESS but approaches the lower threshold for more complex SEM models with latent variables. Third, previous studies (Baluku, 2025; Hayes and Scharkow, 2013; Ledgerwood and Shrout, 2011) indicate that for single-mediator models with reliable measures (α above 0.70), PROCESS produces results comparable to those of latent variable SEM and avoids convergence issues that may arise with smaller samples.

To assess potential measurement error, sensitivity analyses were conducted using structural equation modeling with latent variables in AMOS. The results were consistent across both methods, with path coefficients differing by less than 0.03 and significance patterns remaining unchanged. The indirect effect of bricolage on IA through DG was 0.047 (95% CI: −0.014–0.040) in PROCESS and 0.051 (95% CI: −0.012–0.043) in SEM. This consistency supports the robustness of the findings, regardless of the analytical approach employed.

Table 8 presents the results of all the hypotheses tested in this study. For the first hypothesis, bricolage significantly associated with DG (b = 0.510, p < 0.000), confirming H1a. Bricolage also correlated with EG (b = 0.890, p < 0.000), supporting H1b. In addition, bricolage positively influenced IA (b = 0.513, p < 0.000), FP (b = 0.448, p < 0.001) and NFP (b = 0.276, p < 0.001), confirming H1c, H1d and H1e, respectively (Table 8). These findings indicate that bricolage enhances grit, IA, FP and NFP, improving overall performance. For the second hypothesis, SO significantly influenced with DG (b = 0.249, p < 0.001), supporting H2a. Higher SO also increased EG (b = 0.517, p < 0.000), confirming H2b. SO was positively associated with IA (b = 0.297, p < 0.000), supporting H2c, and reinforced the established link between SO and FP (b = 0.449, p < 0.000), confirming H2d. However, SO was not significantly associated with NFP (b = 0.168, p < 0.053), leading to the rejection of H2e. Predictive validity is used to measure new constructs expected relationship to existing measures in a way expected to measure (Verreynne et al., 2020). In the third hypothesis, grit has significant positive associated with on venture outcomes (IA, FP and NFP). Both dimensions of grit have positive associated with on IA, FP and NFP, as presentation in Table 8.

Table 9 outlines the mediation analysis outcomes using the Hayes PROCESS model. In the fourth hypothesis, the indirect effect of bricolage on IA via DG (effect = 0.047) was not significant, as the 95% confidence interval included zero (LLCI = −0.014, ULCI = 0.040), leading to the rejection of H4a. However, the indirect effect of bricolage on IA via EG was significant (effect = 0.057, LLCI = 0.008, ULCI = 0.112), supporting H4b (Table 9). For the fifth hypothesis, DG significantly mediated the relationship between bricolage and FP, with an indirect effect of 0.0898 and a 95% confidence interval of 0.0085–0.1679. Similarly, EG mediated the bricolage on FP, with a significant indirect effect of 0.087 and a confidence interval of 0.033–0.147, supporting H5b. However, the indirect effect of bricolage on NFP through DG was insignificant (effect = 0.0121, LLCI = −0.0745, ULCI = 0.0995), leading to the rejection of H5c. In addition, the indirect effect of bricolage on NFP through EG was also not significant (effect = 0.017, LLCI = −0.048, ULCI = 0.085), resulting in the rejection of H5d (Table 9).

In H6, DG mediates the relationship between SO and IA, with a significant indirect effect of 0.0980 and a confidence interval of 0.0455–0.1679, supporting the H6a. H6b also confirmed a positive and significant mediation by EG between SO and IA, with an effect of 0.1297 and a confidence interval from 0.0686 to 0.2058, leading to the acceptance of H6b. In H7,DG significantly mediated the relationship between SO and FP, with an indirect effect of 0.0907 and a confidence interval of 0.0404–0.1502, supporting H7a. EG also mediated the effect of SO on FP, with an indirect effect of 0.116 and a confidence interval from 0.055–0.186, supporting H7b. DG partially mediated the relationship between SO and NFP (effect = 0.047, LLCI = 0.000, ULCI = 0.160), leading to the acceptance of H7c. However, the indirect effect of SO on NFP through EG was insignificant (effect = 0.056, LLCI = −0.008, ULCI = 0.124), leading to the rejection of H7d (Table 9). Finally, Table 10 provides a summary of the hypothesis testing results.

Dynamic Grit → Non-Financial Performance (effect = 0.012, CI: −0.075, 0.100): The absence of a significant effect suggests the presence of critical boundary conditions rather than measurement issues. DG, characterized by rapid adaptation and flexibility, may be at odds with the stability required for non-financial outcomes, such as employee satisfaction and customer loyalty. These findings suggest that ongoing adaptation may compromise the stakeholder relationships crucial for NFP.

Bricolage → Enduring Grit → Non-Financial Performance (effect = 0.017, CI: −0.048, 0.085): The nonsignificant result highlights a theoretical tension: the ‘making do’ approach inherent in bricolage may diminish long-term stakeholder trust. This perception likely contributes to the lack of positive effects on non-financial outcomes. The present finding refines bricolage theory by establishing stakeholder perception as a boundary condition for the theory.

Context-Specific Factors in Pakistan: The Pakistani context presents distinct challenges. During the data collection period, inflation rose to 24% and political instability also impacted negatively. As a result, ventures focused on financial survival rather than non-financial metrics, which means environmental turbulence as a critical moderating factor.

This study tested the robustness to ensure a robust and reliable research model with three statistical tests: (1) nonlinearity effect, (2) assessment of unobserved heterogeneity and (3) endogeneity test (Sarstedt et al., 2019). The first test examined potential nonlinearity, which could impact the model’s accuracy (Sarker et al., 2021). A quadratic test in PLS-SEM was used to assess nonlinear effects. Significant and positive interaction terms indicate more robust exogenous constructs at higher values, while nonsignificant terms confirm linear robustness (Sarstedt et al., 2019). In Table 11, bootstrapping results based on 5,000 samples revealed nonsignificant nonlinear effects for all but one relationship, confirming the robustness of the linear effects model. Table 12 presents the principal effect sizes identified in this study and underscores the significance of firm-level grit as a distinctive organizational strength. Each percentage represents either a descriptive group comparison or an incremental variance Ventures with both dynamic and EG had 37% higher IA than those focusing on just one type. These findings highlight the importance of considering grit at the firm level and show that balancing adaptive and persistent qualities is associated with better outcomes for ventures.

Then, we used Ramsey’s RESET (Ramsey, 1969) test to further support the model’s linearity, Table 13 shows insignificant non linearity in six regression models, with only two models exhibiting marginal significance. The second test, the assessment of unobserved heterogeneity, aimed to identify potential variance within the data set. Using the finite mixture PLS (FIMIX-PLS) approach (Hair et al., 2021), Five segments were identified, meeting minimum sample size requirements. In Table 14, the results demonstrated robustness when “AIC3 and CAIC” or “AIC4 and BIC” identified similar segments, and the corresponding entropy values exceeded 0.50, indicating the absence of unobserved heterogeneity. Finally, the endogeneity test validated the research model. The PLS Gaussian copula analysis revealed that all 28 Gaussian copula models, whether one, two, three or four variables were included as endogenous, were nonsignificant. Annexure Tables 4 to 8 present one-coupla, two-coupla, three-coupla and four-coupla models, which confirm the absence of endogeneity and support the robustness of the proposed model. These findings suggest that the proposed model has strong predictive power beyond the current sample (Sarker et al., 2021; Sarstedt et al., 2019).

Starting a new business involves numerous hurdles, such as limited resources, uncertain environments and intense competition, making it challenging to achieve desired objectives and ensure success (Soto-Simeone et al., 2020). While there are multiple strategies for success, grit is essential in helping ventures navigate through the early stages and remain focused on long-term goals, even in challenging circumstances (Ahsan et al., 2024; Baluku, 2025; Mueller et al., 2017). Despite the existing research, the concept of grit at the firm level remains underexplored. There is no established definition or widely accepted empirical measurements, antecedents or outcomes of grit within firms. This study, therefore, seeks to fill this gap by introducing a new scale for measuring grit at the firm level and providing theoretical insights into why certain ventures outperform others despite operating in similar contexts.

Theoretical implications: This study contributes to the entrepreneurship literature by introducing the concept of grit at the firm level, offering a novel perspective to enhance performance and success in the early stages of ventures (e.g. Fisher et al., 2020; Mueller et al., 2017; Murnieks et al., 2016). Figure 1 illustrates that the two dimensions of grit function in collaboration with each other. The dynamic dimension facilitates adaptation and survival, whereas the enduring dimension supports success through sustained persistence. Therefore, grit is a formative, multidimensional construct, where both dimensions – while distinct in their focus – are complementary in nature (Covin and Wales, 2012). DG allows ventures to adapt and respond quickly to short-term challenges, while EG helps them remain resilient and focused on their overarching goals. Both dimensions are vital for new ventures, enabling them to both navigate immediate adversity and maintain the perseverance needed to achieve long-term success (Arshed et al., 2022; Holland and Shepherd, 2013; Muehlfeld et al., 2017).

Our findings reveal that balancing these two dimensions is crucial for new ventures. Too much focus on DG – solving immediate problems – without considering long-term goals may lead to short-term survival but undermine sustainable growth. Conversely, excessive focus on EG – staying fixed on long-term objectives – without sufficient adaptability may cause ventures to miss opportunities to adjust to market conditions. This delicate balance between adapting to short-term challenges and maintaining a long-term vision provides a key insight into how ventures can achieve varying levels of success.

Second, this study also sheds light on the antecedents and outcomes of grit at the firm level, demonstrating that the two dimensions produce different effects and stem from distinct factors. Ventures that cultivate DG are more likely to excel in uncertain environments by leveraging flexibility and rapid problem-solving. In contrast, those with EG demonstrate stronger persistence toward long-term goals, even in adversity. Nevertheless, a strong correlation exists between these dimensions, suggesting that successful ventures strike a balance between the two, adapting as needed while maintaining focus on their ultimate objectives.

By distinguishing between EG and DG, this study clarifies that persisting with a goal can be beneficial or detrimental, depending on the context (Suddaby, 2010). EG matters more when results depend on steady processes or output, where consistency is key. Conversely, DG is essential when performance relies on adapting to others or learning new things, as perseverance without adjustment may hinder success. These findings specify when grit drives outcomes, emphasizing that grit should be evaluated in conjunction with stop rules, search routines and a focus on learning. Unexpected results are not mistakes, but signals about when perseverance is wise or unwise. The pattern of nonsignificant findings advances theory in three ways: First, these results challenge the assumption of universality in grit research. While grit reliably predicts financial performance, its association with non-financial outcomes appears dependent on environmental stability and stakeholder expectations. This suggests that grit operates through distinct mechanisms depending on the outcome type, representing a refinement not previously identified in the literature. Second, the null effects identify previously unknown trade-offs. DG’s insignificant relationship with NFP reveals that adaptation speed may sacrifice relationship depth. This extends March (1991) exploration-exploitation framework to the grit domain, suggesting that ventures face a ‘grit paradox’: the very flexibility that ensures survival may undermine the stability that fosters stakeholder satisfaction. Third, these findings define scope conditions for grit theory. The results indicate that firm-level grit requires (a) environmental stability above a threshold (inflation below 15%), (b) stakeholder alignment regarding the value of adaptation and (c) adequate slack resources to absorb adaptation costs. These boundary conditions clarify conflicting findings in prior research and inform future theory development.

Prior research has shown that SO can have negative, nonsignificant or significant effects on FP depending on the context, conditions and timing of data collection (Anderson et al., 2020; Wales, 2015). In this study, SO was not significantly associated with NFP, which may be explained by the fact that ventures often adopt SO primarily to pursue financial gains rather than non-financial outcomes such as customer and employee satisfaction (Anwar and Shah, 2021; Soomro and Shah, 2020). In addition, the uncertain environment in Pakistan – including double-digit inflation and political instability – may have further hindered the translation of SO into non-financial benefits (Soomro and Shah, 2020). Some SO-driven organizational practices may also not lead to immediate adaptability or the development of DG. Previous literature also suggests that excessive reliance on bricolage or the overuse of scarce resources can adversely affect long-term relationships (Steffens et al., 2022) . This may lead to a reversal in strategic direction and weaken commitment to enduring goals (EG), thereby diminishing focus on non-financial objectives such as employee satisfaction, customer retention and social responsibilityAs this study is cross-sectional in nature, it is difficult to establish causal relationships or mediation effects. It is possible that ventures with strong SO and a focus on long-term goals may already be high-performing, implying potential reverse causality (Anderson et al., 2020; Wales et al., 2013). Moreover, the finding that DG was not significantly associated with performance could be attributed to the reality that resilient ventures in low-profit environments often prioritize short-term survival over long-term outcomes.

In addition, grit is a context-dependent construct and may not yield consistent results across different environments (Agrawal et al., 2022). The timing of data collection during the COVID-19 pandemic is particularly relevant, as the crisis disproportionately affected different sectors. While the pandemic created significant barriers for ventures in sectors such as hospitality and tourism (Abhari et al., 2022; Tanveer et al., 2024). While, those in the information and technology sectors have experienced growth (Bürgel et al., 2023; Tanveer et al., 2024). These sectoral variations further highlight the importance of contextual factors in interpreting the findings.

Fourth, the study drew from theories of causation, effectuation (Sarasvathy, 2001) and bricolage (Baker and Nelson, 2005), and integrated its insights with new venture scholarship to explain the mediating role of grit. We propose a model that demonstrates the mediating role of grit in influencing firm-level outcomes. The model suggests that the combination of dynamic and EG allows ventures to use available resources innovatively while adapting to market changes and pursuing long-term goals. This is particularly important in contexts like Pakistan, where new ventures face significant uncertainty. The study is the first to empirically test the relationship between grit, antecedents and firm-level outcomes, contributing valuable insights into how grit influences new venture performance.

The study concludes with six findings on theoretical integration that systematically connect the findings to the RBV, causation and effectuation logics, and bricolage theory. First: Bricolage to grit: This finding extends the RBV by demonstrating that resource deployment processes, rather than mere possession of resources, generate emergent capabilities. Second: Differential effects of SO: The results align with causation theory, as the stronger effect on EG reflects a goal-driven logic. The nonsignificant relationship between SO and NFP reveals important boundary conditions.

Third: Grit as a mediator: EG, rather than DG, mediates the relationship between bricolage and IA, thereby demonstrating the temporal logic of the proposed framework. Fourth: Dual mediation for financial performance: This finding extends effectuation theory by showing that causation strategies can generate capabilities compatible with effectuation. Fifth: Nonsignificant pathways: The results identify stakeholder perception as a boundary condition for bricolage theory. Sixth: 37% IA association: This finding extends March (1991) exploration-exploitation framework by identifying grit as a capability that enables ambidextrous behavior.

In conclusion, this study provides a new perspective on how ventures can achieve success by striking a balance between the immediate need for adaptability and the persistence required to achieve long-term goals. Future research can build on these insights to further explore the dynamics of firm-level grit and its broader impact on entrepreneurship.

Practical implications: Besides its theoretical contributions, this research has practical implications for new ventures, entrepreneurs, entrepreneurship educators, incubators and accelerators, and government institutions that promote entrepreneurship.

For new ventures, about 50% of new ventures fail to achieve their goals (Levie et al., 2011), but grit is crucial for success, helping ventures reach their objectives. However, excessive grit can lead entrepreneurs to miss profitable opportunities (DeTienne et al., 2008). Therefore, ventures must balance immediate action with strategic resource allocation to optimize outcomes. By adopting this balanced approach, ventures can increase their chances of success and achieve their goals (Miller and Sardais, 2015). New businesses must develop grit to overcome challenges and achieve success, although the process of cultivating grit remains uncertain. This study reveals that immediate action, goal setting and risk management are essential for fostering grit and determination in challenging circumstances. The study focuses on technology startups in Australia (developed) and Pakistan (developing), aged 0–8 years, with 1–250 employees, primarily operating in the B2B sector, and characterized by moderate to high uncertainty and resource constraints. Several boundary conditions remain to be tested: industry differences (e.g. manufacturing, retail, regulated sectors), cultural orientations (collectivist vs individualist), economic systems (socialist, mixed) and venture stage (pre-revenue vs mature SMEs) may alter grit dynamics and require scale adaptation. The scale is not universal; it serves as an initial framework that requires contextual tailoring. Future work should validate it in Latin America, Africa and transitional economies where business environments differ substantially.

For educators, grit interventions can be tailored to align with students’ social and cultural contexts. The implementation of grit-based programs – through collaboration with stakeholders and educational institutions – can lead to positive outcomes (McCalman and Bainbridge, 2021; Slater, 2022). To support student ventures, use a step-by-step grit assessment plan. Begin in week 1 by administering the 11-item scale to establish a baseline. In week 4, offer DG training with crisis simulations. By week 8, help students build lasting grit through longer project milestones. In week 12, review progress and provide each team with coaching based on their grit results. The curriculum has two main modules. Module 1 (Weeks 1–4) focuses on DG through a 48-hour pivot challenge, where teams must identify and implement a strategic change. Here, the goal is to see at least a 0.5-point improvement on items 1–6 of the DG Scale. Module 2 (Weeks 5–8) develops EG through a mission-persistence simulation, where teams face five crisis scenarios and continue working toward their primary objectives. This module measures progress on items 7–11 of the EG Scale and helps students handle three common points where persistence is tested. To reinforce these lessons, include ten case studies that show different levels of dynamic and EG. Instructor guides connect grit profiles to performance, and rubrics are available to assess both individual and team growth in grit.

For incubators, during selection of ventures and entrepreneurs, they can add to venture scores using grit profiles. If DG is above 4.0, we add 2 points for high adaptability. If EG is above 4.2, we add 2 points for strong persistence. If both scores are above 4.0, ventures are considered ideal candidates and receive a total of 3 extra points. Ventures with very uneven scores are marked for extra help. Support is matched to the profile. Ventures with low Dynamic but high EG get agility coaching and quick problem-solving sessions. Ventures with high Dynamics but low EG receive help with setting goals and maintaining progress. Ventures with low scores in both areas must complete resilience training before joining, while ventures with high scores in both areas proceed to advanced growth and scaling training. Progress is monitored monthly through a dashboard. Check Dynamic and Enduring scores each month; set off alerts if any score drops by 0.5 points or more, and initiate help if the difference between the two scores exceeds 1.5 points, as both indicate a higher risk of failure.

The findings of this study offer valuable insights for incubators and government agencies by encouraging the use of grit assessment tools to track business outcomes, strengthen gritty behaviors, and drive innovation.

For policymakers and institutions, this study also highlights the importance of for grant evaluations, this study recommends weight technical merit (40%), market potential (30%), team capability (20%) and grit (10%). Grit is scored as the sum of Dynamic (0–5) and Enduring (0–5) dimensions; ventures are funding-eligible with a combined score > 6.0. For ecosystem development, this study suggests annual regional grit benchmarking of the venture population to establish local norms, then design targeted interventions to address dimension-specific weaknesses. Program returns are tracked by correlating grit improvements with venture survival rates. For resource allocation, ventures scoring < 3.5 complete mandatory preincubation; those at 3.5–4.0 receive standard support plus grit modules; those > 4.0 are fast-tracked to advanced programs. Governments can prioritize funding for ventures demonstrating higher grit scores. Moreover, this scale can be embedded in employability programs to assess grit development before and after participation in training, vocational courses and skills-based learning.

Despite the valuable contributions of this study, its limitations must be acknowledged for future research. First, the study highlights gaps in understanding grit at the firm level, suggesting future research should explore grit’s role as a predictor, mediator or moderator, especially in challenging environments. Second, future studies should compare grit with related concepts to identify which most significantly associated withs new venture success. Third, with the solid measurement foundation established, researchers could improve grit measurement using diverse samples.

Fourth, studies have shown that grit is critical for the success and survival of new businesses. However, this study has limitations in determining the exact relationship between grit and venture performance in resource-depletion contexts, as it relies on cross-sectional data. one limitation of current research is that it relies on correlational relationships, which can artificially enhance or weaken the connection between grit and venture success. To establish a more causal relationship, it is necessary to pursue longitudinal and temporal analysis (Walsh and Martin, 2021). Therefore, there is a need for longitudinal studies to establish a causal relationship between grit and venture performance (Jordan et al., 2019), considering how grit evolves. Fifth, as this study primarily collected data from entrepreneurs and founders, it is essential to adopt a multilevel perspective to distinguish between individual and firm-level grit. Using mixed-methods and multiple informants can mitigate potential biases. Future research should include additional informants, such as entrepreneurial teams and employees, to address social desirability bias and avoid reliance on self-reported questionnaires. Moreover, multi-informant and longitudinal research designs are necessary methodological advancements to establish definitive causal pathways and to differentiate individual-level grit from firm-level grit dynamics. Cross-sectional, single-informant studies are inadequate for resolving this distinction.

Sixth, future research should investigate how grit varies by venture type, comparing successful and struggling ventures to understand grit’s role across different contexts (Holland and Shepherd, 2013; Renko et al., 2021). Overall, grit requires more systematic investigation to identify commonalities and distinctive characteristics of firms, such as ventures of returnees and local entrepreneurs, survivors, failed and struggling firms. Seventh, research should examine how entrepreneurial grit varies with contextual factors like industry, resources and cultural and economic conditions, as grit can sometimes lead to irrational decisions and missed opportunities (Cardon and Kirk, 2015; DeTienne et al., 2008; Holland and Shepherd, 2013).

This study, conducted in the context of startups in Pakistan – a country facing economic, social and political challenges, including high inflation, political instability and natural disasters – examines new ventures that have access to a large market with over 230 million people. A comparison with different countries could provide interesting insights into the complex nature of grit, including its antecedents and outcomes (Anaza et al., 2021). Moreover, individual, firm and environmental differences can affect the level of grit in a venture. It’s also important to examine the potential negative associated with of grit on FP, employees, environment, customers, founders/managers’ families and other stakeholders of new ventures. In tough circumstances, ventures typically rely on slack resources to remain gritty by managing risks at different levels (Gianiodis et al., 2022).