Creating New Ventures: A review and research agenda

Creating new ventures is one of the most central topics to entrepreneurship and is a critical step from which many theories of management, organizational behavior, and strategic management build. Therefore, this review and proposed research agenda is not only relevant to entrepreneurship scholars but also other management scholars who wish to challenge some of the implicit assumptions of their current streams of research and extend the boundaries of their current theories to earlier in the organization’s life. Given that the last systematic review of the topic was published 16 years ago, and that the topic has evolved rapidly over this time, an overview and research outlook are long overdue. From our review, we inductively generated ten sub-topics: (1) Lead founder, (2) Founding team, (3) Social relationships, (4) Cognitions, (5) Emergent organizing, (6) New venture strategy, (7) Organizational emergence, (8) New venture legitimacy, (9) Founder exit, and (10) Entrepreneurial environment. These sub-topics are then organized into three major stages of the entrepreneurial process—co-creating, organizing, and performing. Together, the framework provides a cohesive story of the past and a road map for future research on creating new ventures, focusing on the links connecting these sub-topics

Should I Stay or Should I go? Founder Power and Exit via Initial Public Offering

Founders can voluntarily exit their ventures via initial public offerings (IPOs). In this study, we build on power theory to develop and test a model of founder exit using a dataset of 313 founders from 177 entrepreneurial IPOs between 2002 and 2010. We largely find support for the model—a negative relationship between founder power and full exit. To capture the underlying mechanism of the power-exit relationship, we conducted two experiments in which we randomly assigned decision makers to either a high- or low-power condition. We find that decision makers in the low-power condition are more likely to use a full exit via IPO than those in the high-power condition and that frustration mediates this relationship. However, founders can also engage in partial exits, including a managerial partial exit in which the founder leaves management but keeps ownership and a financial partial exit in which the founder divests ownership but remains in management. We find that the negative relationship between founder power and exit is more negative for full exits than partial exits. With this paper, we contribute to the literature on exit by identifying a novel mechanism—frustration—underlying power’s influence on the likelihood and type of founder exit

Polychronicity in top management teams: The impact on strategic decision processes and performance of new technology ventures

This study focuses on polychronicity as a cultural dimension of top management teams (TMTs). TMT polychronicity is the extent to which team members mutually prefer and tend to engage in multiple tasks simultaneously or intermittently instead of one at a time and believe that this is the best way of doing things. We explore the impact of TMT polychronicity on strategic decision speed and comprehensiveness and, subsequently, its effect on new venture financial performance. Contrary to popular time-management principles advocating task prioritization and focused sequential execution, we found that TMT polychronicity has a positive effect on firm performance in the context of dynamic unanalyzable environments. This effect is partially mediated by strategic decision speed and comprehensiveness. Our study contributes to research on strategic leadership by focusing on a novel value-based characteristic of the TMT (polychronicity) and by untangling the decision-making processes that relate TMT characteristics and firm performance. It also contributes to the attention-based view of the firm by positioning polychronicity as a new type of attention structure

Do entrepreneurship programmes raise entrepreneurial intention of science and engineering students? The effect of learning, inspiration and resources

Drawing on the theory of planned behaviour, this study tests the effect of entrepreneurship programmes on the entrepreneurial attitudes and intentions of science and engineering students. This is necessary in order to confirm (or disconfirm) conventional wisdom that entrepreneurship education increases the intention to start a business. The results show that the programmes raise some attitudes and the overall entrepreneurial intention and that inspiration (a construct with an emotional element) is the programmes' most influential benefit. The findings contribute to the theories of planned behaviour and education and have wider implications for a theory of entrepreneurial emotions and also for the practice of teaching entrepreneurship

Bureaucracy meets digital reality: The unfolding of urban platforms in European municipal governments

The rise of digital technologies provides an opportunity to study smart cities as new organizational forms. We ask whether and how digital platforms and ecosystems affect the bureaucratic governance of municipal governments. To this end, we offer a multiple case analysis based on rich empirical, longitudinal data of seven European smart cities. We find that the contradicting logic of platform governance creates organisational tensions within the bureaucratic municipal government and at the interface between the municipal government and its external partners. We distil a process that describes how these tensions are resolved through a temporary shift to a non-bureaucratic work mode, and the subsequent formalisation and institutionalisation of those practices as new bureaucratic rules. We make three contributions. First, we contribute to the smart-city literature by outlining an overarching process of how data-driven technologies affect bureaucratic municipal governments. Second, we contribute to the ongoing conversation about the changing nature of Weberian bureaucracy showing how bureaucracy preserves its core while simultaneously adapting to and shaping its environment. Third, we highlight the role of lower-echelon bureaucrats as change agents who devise rules at the intersection of technological and societal development

Family management and firm performance in family SMEs: the mediating roles of management control systems and technological innovation

The aim of this research is to analyze the mediating role of the use of management control systems (MCS) and the achievement of technological innovation (TI) in the relationship between family management and firm performance in family small and medium-sized enterprises (SMEs). A questionnaire was conducted by 617 managers of family SMEs in Spain, and our model was tested using partial least squares. Our findings show that both MCS and TI play crucial mediating roles in the understanding of the relationship between family management and firm performance. As a result, family-managed firms that utilize MCS and produce TI are much more likely to generate better performance. These results encourage family managers to use formal MCS because in that way they will contribute to obtaining better firm performance, directly and indirectly through TI. We focus on private family SMEs, because these specific firms contribute significantly to the economies worldwide. This paper contributes to resolve the controversy regarding the relationship between family management and firm performance introducing MCS and TI as mediating factors.Agência financiadora Ministry of Science and Innovation, Spain (MICINN) UID/SOC/04020/2013 Universidad de Malaga Universidad de Cartagenainfo:eu-repo/semantics/publishedVersio

Specialists, generalists, or both? Founders’ multidimensional breadth of experience and entrepreneurial ventures’ fundraising at IPO

Different streams of research have led to contradictory conclusions about the venture performance implications of founders’ breadth of experience. While extant empirical studies have explored the performance implications of founders’ breadth of experience at the start-up stage, we focus on the later stage of the initial public offering (IPO). We theorize that investors categorize venture founders based on two salient dimensions—their industry and functional background—and we relate this categorization to resource acquisition at IPO. To test our model, we use a hand-collected dataset of 175 entrepreneurial IPOs in the Alternative Investment Market in London (2002–2013) and two randomized experiments. We theorize and find that compared to entrepreneurial ventures with a lead founder specializing in one industry or one function, investors generally devalue those with a category-spanning lead founder (a generalist). However, devaluation is less severe when a lead founder is a generalist in one dimension (e.g., industry) but a specialist in the other dimension (e.g., function). We also theorize and empirically test trust as a mechanism for the generalist penalty. Specifically, audience members (investors) have low trust in a generalist producer (founder) in contexts where the two parties consider entering into a partnership (equity investment at IPO), and so that generalist producer is devalued. Finally, we show that an external expert endorsement—in our case, from intensive venture capital affiliations—offsets the generalist penalty, especially when category spanning occurs in multiple category dimensions

On the edge of destruction: An impaired-regulation model of destructive entrepreneurial action

Entrepreneurial action can be directed toward identifying, generating, and exploiting potential business opportunities that can cause harm to others. Over and above the “rules of the game” of the economic system, we theorize on destructive entrepreneurial actions that result from entrepreneurs’ impaired regulation of their decision making. Specifically, we build on the entrepreneurial action literature and draw on regulation theories of goal attainment and moral disengagement to develop an impaired-regulation model of destructive entrepreneurial actions. This model contributes to the entrepreneurship literature by providing new insights into (1) why some entrepreneurs are more susceptible to engaging their ventures in destructive entrepreneurial actions, (2) everyday entrepreneurs (the “who”) engaging in destructive entrepreneurial actions (i.e., the “how” and “why”), and (3) when and why some entrepreneurs respond to their destructive entrepreneurial actions by becoming repentant do-gooders while others grow into serial offenders

The effects of entrepreneurship education

Entrepreneurship education ranks high on policy agendas in Europe and the US, but little research is available to assess its impact. To help close this gap we investigate whether entrepreneurship education a?ects intentions to be entrepreneurial uniformly or whether it leads to greater sorting of students. The latter can reduce the average intention to be entrepreneurial and yet be socially beneficial. This paper provides a model of learning in which entrepreneurship education generates signals to students. Drawing on the signals, students evaluate their aptitude for entrepreneurial tasks. The model is tested using data from a compulsory entrepreneurship course. Using ex ante and ex post survey responses from students, we find that intentions to found decline somewhat although the course has significant positive e?ects on students’ self-assessed entrepreneurial skills. The empirical analysis supports the hypothesis that students receive informative signals and learn about their entrepreneurial aptitude. We outline implications for educators and public policy

Technological trajectories as moderators of firm-level determinants of innovation

Pavitt [Research Policy 13 (1984) 343] identified different patterns of technological change (technological trajectories) in four sectoral classes of industrial firms. This paper tests the applicability of Pavitt’s taxonomy (which derived from an economic perspective) to moderate the inconsistent results of the management literature on the determinants of technological innovation. An empirical test in a sample of 105 Greek companies showed that firms in different trajectories of Pavitt’s taxonomy had differences in the rate of technological innovation. ‘Specialised suppliers’ and ‘science-based’ firms were found to have higher rates of innovation than ‘supplier dominated’ and ‘scale intensive’ ones. Most importantly, different variables proved to be significantly associated with innovation for each category of firms: innovation for ‘supplier dominated’ firms was related to the competitive environment, acquisition of information, technology strategy, risk attitude and internal co-ordination. For ‘scale intensive’ firms, the important determinants were related to the ability to raise funding and the education and experience of personnel. For ‘specialised suppliers’, innovation was associated with high growth rate and exporting as well as training and incentives offered to the employees to contribute towards innovation. ‘Science-based’ firms depended upon technology-related variables, education and experience of personnel, growth in profitability and panel discussions with lead customers. The application of Pavitt’s model can resolve the apparent problem of inconsistent results in the management research on the determinants of technological innovation