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Intra‐firm work experiences and corporate venturing by employees: The roles of job specialization and functionally diverse groups
Strategic Entrepreneurship Journal
Abstract
Research Summary
Taking a strategic human capital perspective on corporate venturing by employees, we consider the potential influence of their job and group experiences within the firm. Because building new ventures requires diverse functional knowledge, greater job specialization could create a barrier to undertaking corporate venturing. However, working in more functionally diverse groups within the firm can facilitate venturing—especially for more specialized employees—by enabling them to develop the skills needed to work with others who have such diverse knowledge. We test our hypotheses using a longitudinal dataset from over 16,000 employees in a large corporation. Our findings advance understanding of the micro‐foundations of internal corporate venturing, how bureaucracies shape corporate entrepreneurship, and how employees can build knowledge and skills with strategic value for the firm.
Managerial Summary
We examine how firms can prepare their employees to undertake corporate venture building activities by shaping their work experiences inside the firm. In a study of employees' work histories within a large corporation, we find that employees who had worked in more functionally diverse groups were more likely to undertake internal corporate venturing. Such experience was particularly important for those who had worked in more specialized jobs, since it could help them collaborate and connect with others with diverse functional knowledge. Our findings suggest that firms hoping to promote strategic growth and increase their competitiveness through corporate venture building consider providing employees with work experiences that help them develop cross‐functional knowledge and skills.
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Research summary
We meta‐analyze the structural relationship between human capital, the ability to generate new venture ideas, and the favorability of opportunity beliefs to address divergent theoretical predictions and inconsistent empirical findings. We test a two‐stage process model of entrepreneurial opportunity identification, distinguishing between the ability to generate new venture ideas and the favorability of third and first‐person opportunity beliefs. We also distinguish between two categories of human capital: general and specific human capital. Our results suggest that general and specific human capital are positively associated with the ability to generate new venture ideas. Furthermore, only specific human capital matters in influencing the favorability of opportunity beliefs, yet the ability to generate new venture ideas is far more important than human capital for the favorability of opportunity beliefs.
Managerial summary
How does an individual's human capital relate to the attractiveness of opportunities identified? In this study, we review the body of literature on this topic and analyze the relationships between two types of human capital—general and specific human capital, the ability to generate new venture ideas, and the attractiveness of opportunities. We find that both general human capital—primarily education and work experience—and specific human capital—industry and entrepreneurial experience—are useful for generating new venture ideas. However, only specific human capital is useful when assessing which new venture ideas can turn into attractive opportunities. We also find that the ability to generate new venture ideas is more strongly associated with the attractiveness of opportunities than either type of human capital.
This Short Methodological Report builds on research about moderation practices by focusing on a marginal effects approach to interpreting how a main effect is informed by the presence of a moderating variable. Following a content analysis of published studies and a survey of management researchers, our findings suggest there is a great deal of confusion about the ways in which to interpret how a main effect may fluctuate owing to a moderating variable. We therefore provide explicit instructions on how to implement and interpret a marginal effects approach that depicts the nature of a main effect in the presence of a moderator. We use different scenarios and examples to illustrate how researchers can employ the marginal effects technique, which provides an indication of the relationship between the independent and dependent variables over different values of the moderator. We argue and demonstrate that the marginal effects approach helps resolve conflicting findings that may arise from using other prevailing techniques to interpret both main effects and moderation.
Research Summary
Building on human capital theory, this study establishes the concept of the “sharedness” of competencies in founding teams. Based on prominent entrepreneurship research, we differentiate among entrepreneurial, managerial, and technical competencies. We test our model with 1,863 founding teams of US‐based new ventures by means of a multisource dataset that uses the LinkedIn skills and endorsements sections to measure competencies in a novel way. The results suggest that strong sharedness of entrepreneurial competencies is positively related to new ventures' performance, while sharedness of managerial skills is negatively related to performance. These results have theoretical implications for human capital and entrepreneurship research and practical implications for investors and founders.
Managerial Summary
It is common wisdom in entrepreneurial practice that different types of competencies are required in founding teams. Our research adds to this notion that it does not only matter that different competencies are represented, but also how these competencies are represented. First, all members should have some entrepreneurial competencies, as mastering the challenges related to opportunity recognition is the major task a new venture has to address, and synergies are central to success in this regard. Second, deep expertise in managerial competencies in one or a few individuals with specialized knowledge, such as project management and managing customer relationships, is beneficial to new ventures' funding success. These findings provide important implications for founding team composition.
Research Summary
We examine the role of managerial job security in the adoption of innovative practices and structures. Utilizing state level antitakeover protections as an exogenous shock, we find that when managers are afforded greater job security through these protections they exhibit a higher probability of initiating a Corporate Venture Capital (CVC) program. Furthermore, the positive effect of job security on CVC adoption is stronger when firms are research intensive, and when there are slack financial resources. Our results suggest that providing managers leeway to experiment while ensuring job security is important for corporate entrepreneurship and the willingness to experiment with innovative strategies.
Managerial Summary
Entrepreneurial activity often involves identifying opportunities that the rest of the marketplace overlooks. While this risk taking is celebrated as part of entrepreneurial folklore, in pragmatic terms, for managers of public organizations, it requires going against the prevailing wisdom of important stakeholders. Since stakeholders can hold considerable influence over top managers' employment, managers may avoid innovation if they feel experimentation and/or failure could cost them their jobs. This study demonstrates that when top managers have more job security, they are more likely to experiment with new organizational forms and structures by establishing Corporate Venture Capital units. The study demonstrates that job security not only impacts the amount of risk taken within existing operations, but also the willingness to experiment with novel ideas and activities.
Entrepreneurial team formation-the process through which founders establish a team to start a new venture, has important implications for team performance and entrepreneurial success. While research on entrepreneurial team formation is gradually growing, it is at a critical juncture and marked by considerable fragmentation. In part, this is because scholars have examined entrepreneurial team formation through different disciplinary lenses, and within very different contexts. Our structured content analysis situates the literature based on questions addressed for new venture team formation, such as why, how, when, and where entrepreneurial teams are formed. The resulting integrative framework delineates the dynamic nature of the formation process, the origins of new venture teams, primary formation strategies used to initiate co-founding relations, and their effects on team characteristics, processes, and performance. Two key insights emerge to guide future research. One, the need for integration, especially across disciplines and contexts, acknowledging the role of the latter in shaping the formation process.
This study explores the domain of corporate venturing using a theoretically grounded classification typology as an organizing scheme. The typology is applied in a field study of corporations that are active In venturing and based in the United Kingdom or the United States. Corporate venturing is classified into four generic forms by the focus of entrepreneurship and the presence of investment intermediation: (1) direct-internal venturing; (2) direct-external venturing; (3) indirect-internal venturing; and (4) indirect-external venturing. A managerial decision framework is offered to assist corporate executives in selecting potentially appropriate forms of corporate venturing, given specific venturing objectives and corporate circumstances.
How can one predict entrepreneurship, an individual's participation in the founding of a new organization? We propose that the organizational context of an individual either accelerates or retards the likelihood of entrepreneurship, depending on the individual's role in the organization. The effects of role hinge, we argue, on the founder's charismatic identity, and the decoupling of this identity from the organization as it ages and grows. Our findings support the proposition that organizational properties that affect the likelihood of becoming an entrepreneur do so in opposite ways for organizational members and founders. We discuss how our theory and results demonstrate the value of a sociological perspective on entrepreneurship.
Theories of entrepreneurship have proposed that entrepreneurs are shaped by contextual influences. This paper examines the social transmission of entrepreneurial behavior across university peers. I propose that peers acquainted at a university increase the probability of an entrepreneurial entry by transmitting information about new opportunities and by reducing the uncertainty associated with entrepreneurship. Based on unique data on hedge fund foundings between 1979 and 2006, this study documents that past entrepreneurial behaviors of university peers are an important driver of individual rates of entrepreneurship. Additional analyses show that social influence has a stronger effect on the transition to entrepreneurship when exerted by spatially proximate university peers and university peers who share gender with the focal individual. These findings provide evidence that the effect of university peers arises as a result of social influence rather than the institutional impact of universities. Together, the results uncover novel pathways of social transmission of entrepreneurship and strengthen evidence for the role of contextual influences in shaping entrepreneurial entry.
Earlier studies recognize the importance of corporate entrepreneurship towards achieving a sustainable competitive advantage. This study proposes that the likelihood of individual participation in corporate entrepreneurship initiatives is contingent upon individual perceptions of rewards and risks. The research presents different scenarios, and tests several attributes that influence the decision to participate. Conjoint analysis utilisation simulates a real life situation where scenario analyses in varying combinations in terms of their intensity levels take place. The results indicate the most important attribute influencing the decision to participate is the probability of venture success followed closely by financial reward. As expected, job risk, pay risk and required effort are deterrents to participation; and individuals with past entrepreneurial experience are less concerned about job risk and have a higher positive perception regarding the probability of corporate venture success.
The use of limited dependent variable (LDV) models is becoming ubiquitous in empirical management research. When using such models, researchers frequently postulate and test that the relationship between an explanatory variable and the dependent variable is moderated by another variable by including in the model an interaction variable. Although recent papers clarify methods for analyzing a moderating effect in LDV models, it is not widely appreciated that this effect confounds two moderating effects: one associated with including an interaction variable in the model and one associated with the inherent nonlinearity of such models. This article presents a method to separate these two sources of a moderating effect for a general class of nonlinear models that includes all LDV models commonly used in the management literature. For such models, the article demonstrates that the statistically correct method to assess the validity of a moderating hypothesis is not, as currently recommended, to test for significance of the total moderating effect derived from the model that includes the interaction variable but instead to test for significance of the secondary moderating effect, the latter defined as the difference between two moderating effects: the one in the model that includes the interaction variable and the one in the model that excludes this variable. The result that the secondary effect is the correct statistic for testing a moderating hypothesis is very general, and it applies whenever a moderating hypothesis is to be tested by including an interaction variable in any model, whether linear or nonlinear.
This study revisits the well-established notion that large and mature organizations stifle an employee’s ability and motivation to become an entrepreneur. Using unique data on U.S. mutual funds founded between 1979 and 2005, I examine whether large and mature firms, which are typically associated with lower individual rates of entrepreneurship, are also associated with lower individual rates of intrapreneurship. The findings show that, though employees in large and mature organizations are less likely to transition to entrepreneurship, they nonetheless exhibit a higher propensity to pursue venturing opportunities inside the established firm than employees in smaller and younger firms. The results suggest that the observed negative effect of large, mature organizations on entrepreneurship arises partly due to high rates of intrapreneurship and that the stultification processes in such organizations are far less important than has been generally assumed.
Geographically distributed teams are increasingly prevalent in the workplace, and research on distributed teams is ever more available. Despite this increased attention, we still know surprisingly little about how the dynamics of distributed teams differ from those of their collocated counterparts and how existing models of teams apply to this new form of work. For example, although it has been argued that distributed as compared with collocated teams have more severe conflicts that fester longer and resist resolution, few comparative studies investigate dynamics such as conflict in both distributed and collocated teams. In this study, we examine conflict, its antecedents, and its effects on performance in distributed as compared with collocated teams. Our goal is to understand how conflict plays out in distributed and collocated teams, thus providing insight into how existing models of conflict must be augmented to reflect the trend toward distributed work.
We report the results of a field study of 43 teams, 22 collocated and 21 distributed, from a large multinational company. As expected, the distributed teams reported more task and interpersonal conflict than did the collocated teams. We found evidence that shared identity moderated the effect of distribution on interpersonal conflict and that shared context moderated the effect of distribution on task conflict. Finally, we found that spontaneous communication played a pivotal role in the relationship between distribution and conflict. First, spontaneous communication was associated with a stronger shared identity and more shared context, our moderating variables. Second, spontaneous communication had a direct moderating effect on the distribution-conflict relationship, mitigating the effect of distribution on both types of conflict. We argue that this effect reflects the role of spontaneous communication in facilitating conflict identification and conflict handling.
This paper examines the effects and origins of balanced skills among nascent entrepreneurs. In a first step we apply Lazear’s jack-of-all-trades theory to investigate performance effects of a balanced skill set. Second, we investigate potential sources of balanced skills, thereby testing the investment hypothesis against the endowment hypothesis. Analyzing data on high-potential nascent projects, we find support for the notion that balanced skills are important for making progress in the venture creation process. Regarding the origins of balanced skills, the data support both hypotheses. In line with the investment hypothesis an early interest in an entrepreneurial career, prior managerial and entrepreneurial experience are significantly related with a more balanced skill set. Supporting the endowment hypothesis, an entrepreneurial personality profile indicating entrepreneurial talent is correlated with a balanced skill set. Our results thus hint at the need for theories on the origins of a balanced skill set that integrate both views.
In our study of an interactive marketing organization, we examine how members of different communities perform boundary-spanning coordination work in conditions of high speed, uncertainty, and rapid change. We find that members engage in a number of cross-boundary coordination practices that make their work visible and legible to each other, and that enable ongoing revision and alignment. Drawing on the notion of a trading zone, we suggest that by engaging in these practices, members enact a coordination structure that affords cross-boundary coordination while facilitating adaptability, speed, and learning. We also find that these coordination practices do not eliminate jurisdictional conflicts, and often generate problematic consequences such as the privileging of speed over quality, suppression of difference, loss of comprehension, misinterpretation and ambiguity, rework, and temporal pressure. After discussing our empirical findings, we explore their implications for organizations attempting to operate in the uncertain and rapidly changing contexts of postbureaucratic work.
The emergence of cross-functional teams has outpaced our understanding of how and why they work the way they do. Although cross-functional teams have improved new product processes in many organizations, not all work equally well, nor are all equally collaborative. Our recent study of high technology-based industrial organizations shows that collaborative behaviors are difficult to learn, and seldom result from mere membership on teams. Some teams consisting of representatives from R&D, production, marketing, and other functional groups transform and adopt collaborative behaviors and accelerate new product development processes. Others are challenged by issues of interpersonal interaction and commiting to a common agenda. This article highlights the nature of learning that occurs and the developmental milestones that characterize the process by which groups of individuals transform into collaborative new product teams.
This article represents one effort to systematize the use of terminology in the field of corporate entrepreneurship. To do this we first review some of the existing definitions and illustrate how they are contradictory. This review is conducted to provide a grounding from which a framework of definitions can be developed that covers the field of corporate entrepreneurship. In developing this framework we go from a general to a specific point of view in order to clarify the existing boundaries of the field, reconcile the various terms used to describe the phenomena of interest, and illustrate the territory they cover. Each of the definitions we will propose are broad, by intention. We are of the opinion that broad definitions of concepts are preferable to narrow definitions at this stage in the field's development for several reasons. First, broad definitions are less likely to exclude as-yet-unspecified problems, issues, or organizations that are potentially important or interesting. Therefore, starting broad makes it less likely that the definitions will become outmoded and in need of revision as new issues are discovered. Furthermore, broad definitions are more amenable, and more resilient, to the discovery and classification of unique populations and subpopulations of firms and events since they avoid premature or arbitrary decisions about the variables that delineate one group from another. Broad definitions make it possible for the natures of different organizations and events to emerge through empirical research and theories of differences. Finally, broad definitions are more likely to be acceptable to most scholars since most will find a place for the topic or sites of research that are of interest to them. In sum, broad definitions better reflect the early stage of development of the field, avoid the need for excessive retrenchment as new knowledge becomes available, and provide considerable latitude for a theoretical and empirical process to emerge that will eventually permit the unique parts of the whole to be classified, defined, and understood in relation to that whole. After we have presented our framework of definitions pertaining to corporate entrepreneurship, we then proceed to discuss some of the critical constructs by which internal corporate venturing efforts might be classified to illustrate the possibilities of the approach taken. We focus on internal corporate venturing because it is the sub-area that has been perhaps the most thoroughly studied thus far and is, therefore, the most amenable to further classificatory efforts. EXISTING DEFINITIONS Entrepreneurship
This paper uses an analysis of developments in aircraft engine control
systems to explore the implications of specialization in knowledge
production for the organization and the boundaries of the firm. We
argue that the definition of boundaries of the firm in terms of the
activities performed in house does not take into account that decisions
to outsource production and other functions are different from decisions
to outsource technological knowledge. We show that multitechnology
firms need to have knowledge in excess of what they need for what
they make, to cope with imbalances caused by uneven rates of development
in the technologies on which they rely and with unpredictable product-level
interdependencies. By knowing more, multitechnology firms can coordinate
loosely coupled networks of suppliers of equipment, components, and
specialized knowledge and maintain a capability for systems integration.
Networks enable them to benefit from the advantages of both integration
and specialization. Examples from other industries extend to other
contexts the model we develop.
Acknowledgments: Special thanks to Peter Abell, Torben Juul Andersen, Russ Coff, Rachel Hilliard, Lasse Lien, Anoop Madhok, Joe Mahoney, Jackson Nickerson, and
Resource-based theorists argue that human assets can be a source of sustainable advantage because tacit knowledge and social complexity are hard to imitate. However, these desirable attributes cause dilemmas that may prevent firms from generating an advantage. This article develops a framework for analyzing and coping with these challenges. Although the problem arises from the strategy literature, the solutions are drawn from the organizational behavior, human resource management, human capital, and professions literatures. Finally, I examine implications for how insights from these diverse literatures can be integrated to guide future strategy research.
The central argument of network research is that actors are embedded in networks of interconnected social relationships that offer opportunities for and constraints on behavior. We review research on the antecedents and consequences of networks at the interpersonal, interunit, and interorganizational levels of analysis, evaluate recent theoretical and empirical trends, and give directions for future research, highlighting the importance of investigating cross-level network phenomena.
Microfoundations have been one of the key themes in strategy research over the last decade or so. Fundamentally, microfoundations seek to understand collective (e.g., firm)-level constructs in terms of the actions and interactions of individuals. This chapter briefly discusses the nature of microfoundations, provides an exposition of the microfoundational currents in contemporary strategy thinking, and discusses the key challenges that need to be addressed to advance microfoundational research. Chief among these challenges are the development and application of proper empirical methods and developing models of decision-making that are particularly relevant in a strategy context. The latter task involves going beyond expected utility or bounded rationality models and developing models that can address genuine (“deep”) uncertainty.
An expanding number of methodological resources, reviews, and commentaries both highlight endogeneity as a threat to causal claims in management research and note that practices for addressing endogeneity in empirical work frequently diverge from the recommendations of the methodological literature. We aim to bridge this divergence, helping both macro and micro researchers understand fundamental endogeneity concepts by: (1) defining a typology of four distinct causes of endogeneity, (2) summarizing endogeneity causes and methods used in management research, (3) organizing the expansive methodological literature by matching the various methods to address endogeneity to the appropriate resources, and (4) setting an agenda for future scholarship by recommending practices for researchers and gatekeepers about identifying, discussing, and reporting evidence related to endogeneity. The resulting review builds literacy about endogeneity and ways to address it so that scholars and reviewers can better produce and evaluate research. It also facilitates communication about the topic so that both micro- and macro-oriented researchers can understand, evaluate, and implement methods across disciplines.
This paper is a replication and extension of a prior study that examines the factors influencing employees’ willingness to participate in corporate ventures. We use a conjoint experiment to build knowledge surrounding the impact of motivating factors beyond financial profit as well as the role of entrepreneurial self-efficacy. Our replication results largely support prior findings and indicate that the extra effort required for participating in a corporate venture is the most important factor driving employees’ decision. Our replication also extends prior findings in two critical ways. First, it shows that independence is essential in developing a comprehensive understanding of the decision-making process for participating in a corporate venture. Second, it demonstrates that entrepreneurial self-efficacy influences the effects of employment risk and expected success on the relationship between profit sharing and employees’ willingness to participate in a corporate venture. Our results suggest that individual-level differences provide additional explanatory power and a fuller understanding of the employees’ decision to participate in corporate ventures. They also yield important practical implications for managers who wish to motivate their employees towards the corporate venturing path.
Strategic human capital research sits at the intersection of strategy and employee mobility research. Employee entrepreneurship research sits at the intersection of entrepreneurship and employee mobility research. We demonstrate how a shared focus on labor market frictions connects these two complementary but largely disparate literatures through their mutual emphasis on employee mobility. Our examination of the impact of various labor market frictions on employee mobility to competitor firms and employee transitions to entrepreneurship suggests that the outcomes of some frictions are divergent across the two literatures, the outcomes of some are aligned, and the outcomes of some are ambiguous. The complex interplay of labor market frictions provides opportunities for future research specifically exploring the intersection of the strategic human capital and employee entrepreneurship literatures. Our research suggests that some factors that prevent employees from leaving their employers to join competitor companies may also keep those employees from leaving to start new companies. Other factors that prevent employees from leaving their employers, however, may actually encourage employees to leave to start new companies. We identify areas for future research to better help us understand when companies' efforts to hold on to their workers are effective at preventing both movement to competitor companies as well as to entrepreneurship.
In a study of artists who launched independent record labels in the music industry from 1990 to 2013, we focus on explaining the paradox generated when prospective entrepreneurs accumulate broad functional experience, which signals to resource providers mastery of different skills and access to various information and resources but may also undermine the legitimacy of their entrepreneurial claims because they are not seen as specialists. To resolve this paradox, we theorize that the potential legitimacy discount of categorical membership can be avoided when individuals are classified according to multiple categories simultaneously. We find that the transition to entrepreneurship is most likely to occur when an artist’s functional experience is broad but market experience is narrow: he or she has mastered a variety of skills but solicited few audiences. We also find that the paradox of breadth is attenuated—the potential penalty of functional breadth and the corresponding need to develop narrow market experience are reduced—when the entrepreneur has alternate methods of signaling legitimacy, including high status and more-typical prior work experience. Moreover, some audiences are more disposed than others to allow an entrepreneur to pursue greater novelty. Our findings suggest that mastering a variety of skills is not universally beneficial for aspiring entrepreneurs. In some circumstances, such mastery is best coupled with a narrow market focus.
We clarify differences among moderation, partial mediation, and full mediation and identify methodological problems related to moderation and mediation from a review of articles in Strategic Management Journal and Organization Science published from 2005 to 2014. Regarding moderation, we discuss measurement error, range restriction, and unequal sample sizes across moderator-based subgroups; insufficient statistical power; the artificial categorization of continuous variables; assumed negative consequences of correlations between product terms and its components (i.e., multicollinearity); and interpretation of first-order effects based on models excluding product terms. Regarding mediation, we discuss problems with the causal-steps procedure, inferences about mediation based on cross-sectional designs, whether a relation between the antecedent and the outcome is necessary for testing mediation, the routine inclusion of a direct path from the antecedent to the outcome, and consequences of measurement error. We also explain how integrating moderation and mediation can lead to important and useful insights for strategic management theory and practice. Finally, we offer specific and actionable recommendations for improving the appropriateness and accuracy of tests of moderation and mediation in strategic management research. Our recommendations can also be used as a checklist for editors and reviewers who evaluate manuscripts reporting tests of moderation and mediation.
Corporate venture (CV) units constitute vehicles through which firms may act ambidextrously, thereby increasing their longevity, but they suffer from a high failure rate. The authors examine why and how some CV units last significantly longer than others. They argue that CV units endure by developing an ambidextrous orientation themselves—they build new capabilities for the parent firm while simultaneously leveraging its existing strengths. They argue that CV units become ambidextrous by nurturing a supportive relational context, defined by the strength of their relationships with three different sets of actors—parent firm executives, business unit managers, and members of the venture capital community. Using primary data collected from 95 CV units over a three-year period, the authors test and find support for these arguments.
Lazear (2005) suggests that entrepreneurs should be generalists, while those who work for others should be specialists. Many prospective entrepreneurs will develop varied skills by engaging in a variety of employment activities prior to becoming an entrepreneur, and incomes are higher for those that do so. An alternative view predicts that those with greater taste for variety are more likely to become entrepreneurs. Varied employment prior to becoming an entrepreneur is simply an expression of this taste, and is associated with lower earnings. Data from a survey of 830 independent inventors and 300 individuals from the general population are used to discriminate between these two theories. The results show that inventor-entrepreneurs typically have a more varied labor market experience, and that varied work experience is associated with lower household income.
Corporate entrepreneurship is important to firms’ long-term competitiveness, and cross-functional fertilization contributes to firm innovation. Thus, cross-functional teams have become popular in the design and development of new products, but there has been little research on the specific characteristics and processes of such teams over time. This research longitudinally studied a cross-functional new product design team using multiple methods. The results suggested that organizational context, specifically top management team support and organizational politics, has more significant influence on team success than internal team characteristics. While the team experienced a positive beginning with few differences among the team members, conditions rapidly deteriorated because of a lack of top management support and dysfunctional organizational politics. Thus, the results have implications for effective management of cross-functional teams. This intensive longitudinal case study produced rich and valuable information and provides useful implications for corporate entrepreneurship and directions for future research on cross-functional teams.
The resource-based view suggests that firms' heterogeneous resource endowments are important for explaining interfirm performance differences. To date, however, the literature provides little insight on the factors that shape the identification of markets in which firm resources, as embodied in a product or service, can create value for end customers. Building on entrepreneurship research and Penrose's early resource-based work, the authors examine how four main types of pre-entry human capital endowments (i.e., the characteristics that the founders bring to the founding process) shape the identification of market opportunities for emerging technology firms. They find that prior entrepreneurial and management experience endowments enhance, while marketing and technological experience endowments constrain, the number of market opportunities identified. In addition, the authors find that the number of market opportunities identified depends on the combinations of generalized and specialized endowments in the founding team.
Drawing on related literature and an inductive pilot study, we propose a conceptual framework for the relationship between job rotation and selected career-related variables. A test on 255 employees showed rotation was predicted by career antecedents, such as tenure and performance, and was related to career outcomes, such as salary and promotion, positive affect, and perceptions of skill acquisition and other career benefits. Rotation may he a proactive way to enhance the career development value of work assignments.
Arecognized challenge in innovation scholarship is how to coordinate the efforts of many minds contributing to the design of a single artifact. Much research shows that product concept representations can help coordinate design tasks, but we know little about the practices that make representations more or less effective. We used an inductive approach to examine how six teams in three industries used concept representations when creating novel products. All six teams crafted three types of representations: stories, metaphors, and prototypes. However, merely using representations did not ensure a shared repertoire and concept coherence—a common understanding of desired product attributes. Teams that failed to consistently engage in three practices—(1) collective scrutiny of representations, (2) linking representations to design constraints, and (3) active editing of representations—produced concept disunity, with disparate understandings of desired product attributes. Teams that maintained concept coherence were better able to coordinate design tasks than teams that experienced concept disunity. Our research explains how the ultimate effect of concept representations on the coordination of innovation is contingent on the practices used to manage a repertoire of representations in use.
The contextual factors of entrepreneurship consist of social, political, and economic variables such as displacement, changes in markets, and government deregulation (Bird, 1988). Entrepreneurial intentions are further structured by both rational/analytic thinking (goal-directed behavior) and intuitive/holistic thinking (vision). These thought processes underlie the creation of formal business plans, opportunity analysis, and other goal-directed behavior. This paper further develops Bird's model of entrepreneurial intentionality by suggesting that individual self-efficacy, which has been defined as a person's belief in his or her capability to perform a task, influences the development of both entrepreneurial intentions and actions or behaviors. [ABSTRACT FROM AUTHOR]
Functional diversity in teams has been conceptualized in a variety of ways without careful attention to how different conceptualizations might lead to different results. We examined the process and performance effects of dominant function diversity (the diversity of functional experts on a team) and intrapersonal functional diversity (the aggregate functional breadth of team members). In a sample of business unit management teams, dominant function diversity had a negative, and intrapersonal functional diversity, a positive effect on information sharing and unit performance. These findings suggest that different forms of functional diversity can have very different implications for team process and performance and that intrapersonal functional diversity matters for team effectiveness.
Increasing competition resulting from the global and technological nature of markets has heightened the need for businesses to rely on cross-functional new product teams to produce innovations in a timely manner; yet functionally diverse teams' inevitable disagreements often appear to prevent this. In a study of 43 such teams, we found that the effect of task disagreement on team outcomes depended on how free members felt to express task-related doubts and how collaboratively or contentiously these doubts were expressed. Implications for managing the journey from disagreement to agreement in cross-functional new product teams are discussed.
This paper develops a contingency view regarding the effects of structural differentiation and integration on levels of corporate entrepreneurship. Integrating notions of benefits and costs resulting from integration with structural contingency theory, we argue that the joint effects of structural differentiation and integration on corporate entrepreneurship levels are moderated by organizational size and environmental dynamism. Our findings from a time-separated sample demonstrate that in smaller organizations and more dynamic environments, the positive effects of integration on the structural differentiation-corporate entrepreneurship relationship strongly diminish. As such, with this research we begin to identify contingencies that influence the corporate entrepreneurship levels observed among firms striving to balance the needs for structural differentiation and integration.
Most entrepreneurs emanate from established organizations, yet systematic theorizing about the ways in which organizations shape the entrepreneurial process has only recently begun to emerge. We provide a framework for organizing this emerging literature. We focus on four different metaphors in the literature for how organizations matter in the entrepreneurial process and suggest promising avenues for future research.
In this article, we attempt to resolve the tension between two conflicting views on the role of specialization in workers’ careers. Some scholars argue that specialization is a net benefit that allows workers to get ahead, while others argue that broad experience across several domains is the only way to be truly exceptional. We use rich longitudinal data from 1974 to 2008 on the careers of Indian Administrative Service officers, members of the Republic of India’s elite bureaucratic service, to test both these hypotheses. We find that specialization benefits officers throughout their career. We distinguish between skill-based and signal-based mechanisms that relate specialization to promotion, by exploring the match (or lack thereof) between the skills officers acquire and the jobs to which they are promoted, and we find that both mechanisms operate, but at different points in the career. Specialization is rewarded later in officers’ careers because of the skills they acquire by specializing. Earlier in their careers, skills are less important; it appears that specialization benefits officers because it is a signal of general ability. These results contradict studies that find that specialization helps early in careers but fades with experience, but they also call into question the idea that specialization always reflects accumulated skill. Our results support both types of theories but suggest important scope conditions for when one mechanism or the other is likely to dominate.
Using a study of the relationship between bureaucratic work environments and individual rates of entrepreneurship, I revisit a fundamental premise of sociological approaches to entrepreneurship, namely, that the social context shapes the likelihood of entrepreneurial activity, above and beyond any effects of individual characteristics. Establishing such contextual effects empirically is complicated by the possibility that unobserved individual traits influence both the contexts in which people are observed and their likelihood of becoming entrepreneurs. This paper presents the first systematic study of the effects of bureaucracy on entrepreneurship that accounts for such unobserved sorting processes. Analyses of data on labor market attachments and transitions to entrepreneurship in Denmark between 1990 and 1997 show that people who work for large and old firms are less likely to become entrepreneurs, net of a host of observable individual characteristics. Moreover, there is strong evidence to suggest that this negative effect of bureaucracy does not spuriously reflect self-selection by nascent entrepreneurs into different types of firms. An important implication of this finding is that the structure of organizational populations affects the supply of nascent entrepreneurs, as well as the availability of entrepreneurial opportunities.
This article analyzes the costs and benefits of job rotation as a mechanism with which the firm can learn about the employees' productivities and the profitability of different jobs or activities. I compare job rotation to an assignment policy where employees specialize in one job along their career. The gains from adopting a job rotation policy are larger when there is more prior uncertainty about employees and activities. I argue that this firm learning theory fits the existing evidence on rotation better than alternative explanations based on employee motivation and employee learning.
Five primary dimensions of organization structure were defined and operationalized; (1) specialization, (2) standardization, (3) formalization, (4) centralization, (5) configuration. From comparative data on these dimensions, in fifty-two different work organizations in England, scales were constructed to measure sixty-four component variables. This made it possible to construct a profile characteristic of the structure of an organization and to compare it directly with that of other organizations. Principal-components analysis was used to help in the interpretation of intercorrelations among the scales. The resulting factors suggested four basic dimensions of structure, conceptualized as structuring of activities, concentration of authority, line control of workflow, and size of supportive component. This multifactor result was considered to demonstrate that the concept of the bureaucratic type is no longer useful.
This research considers how different features of informal networks affect knowledge transfer. As a complement to previous research that has emphasized the dyadic tie strength component of informal networks, we focus on how network structure influences the knowledge transfer process. We propose that social cohesion around a relationship affects the willingness and motivation of individuals to invest time, energy, and effort in sharing knowledge with others. We further argue that the network range, ties to different knowledge pools, increases a person's ability to convey complex ideas to heterogeneous audiences. We also examine explanations for knowledge transfer based on absorptive capacity, which emphasizes the role of common knowledge, and relational embeddedness, which stresses the importance of tie strength. We investigate the network effect on knowledge transfer using data from a contract R&D firm. The results indicate that both social cohesion and network range ease knowledge transfer, over and above the effect for the strength of the tie between two people. We discuss the implications of these findings for research on effective knowledge transfer, social capital, and information diffusion.
In this paper we present an integrative model of the relationships among diversity, conflict, and performance, and we test that model with a sample of 45 teams. Findings show that diversity shapes conflict and that conflict, in turn, shapes performance, but these linkages have subtleties. Functional background diversity drives task conflict, but multiple types of diversity drive emotional conflict. Race and tenure diversity are positively associated with emotional conflict, while age diversity is negatively associated with such conflict. Task routineness and group longevity moderate these relationships. Results further show that task conflict has more favorable effects on cognitive task performance than does emotional conflict. Overall, these patterns suggest a complex link between work group diversity and work group functioning.
This paper considers the role of design, as the emergent arrangement of concrete details that embodies a new idea, in mediating between innovations and established institutional fields as entrepreneurs attempt to introduce change. Analysis of Thomas Edison's system of electric lighting offers insights into how the grounded details of an innovation's design shape its acceptance and ultimate impact. The notion of robust design is introduced to explain how Edison's design strategy enabled his organization to gain acceptance for an innovation that would ultimately displace the existing institutions of the gas industry. By examining the principles through which design allows entrepreneurs to exploit the established institutions while simultaneously retaining the flexibility to displace them, this analysis highlights the value of robust design strategies in innovation efforts, including the phonograph, the online service provider, and the digital video recorder.
We argue that individual performance in knowledge-intensive work is associated with properties of both networks and ties. Relationships crossing organizational boundaries, physical barriers, or hierarchical levels can, like networks, provide unique information and diverse perspectives to individuals completing tasks at work. Egocentric and bounded network data from 101 engineers in a petrochemical company and 125 consultants in a strategy-consulting firm support our contention that both networks and ties are related to individual performance in knowledge-intensive work.
This article outlines the mechanism by which brokerage provides social capital. Opinion and behavior are more homogeneous within than between groups, so people connected across groups are more familiar with alternative ways of thinking and behaving. Brokerage across the structural holes between groups provides a vision of options otherwise unseen, which is the mechanism by which brokerage becomes social capital. I review evidence consistent with the hypothesis, then look at the networks around managers in a large American electronics company. The organization is rife with structural holes, and brokerage has its expected correlates. Compensation, positive performance evaluations, promotions, and good ideas are disproportionately in the hands of people whose networks span structural holes. The between-group brokers are more likely to express ideas, less likely to have ideas dismissed, and more likely to have ideas evaluated as valuable. I close with implications for creativity and structural change.