Research handbook on entrepreneurial teams theory and practice

Giovanna mainly focuses her research on management issues in family business, looking in particular at the involvement of the family in the business and its effect on firm performance, c

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Business subject collection

Cyrine Ben- Hafạedh and Thomas M Cooney

PART I LEARNING FROM THEORY AND PRACTICE

Cyrine Ben- Hafạedh

3 Urban legends or sage guidance: a review of common advice

Phillip H Kim and Howard E Aldrich

PART II DEVELOPING ENTREPRENEURIAL TEAMS

Giovanna Campopiano, Tommaso Minola and Lucio Cassia

5 Entrepreneurs’ perspectives on the structuring phase of the

L Martin Cloutier, Sandrine Cueille and Gilles Recasens

6 Which deep- level diversity compositions of new venture teams

Stephanie Schoss, René Mauer and Malte Brettel

7 How owner- manager team size influences the potential

Jonathan Levie and Johan P de Borst

8 Dispositional antecedents of shared leadership emergent states

Wencang Zhou and Donald Vredenburgh

PART III CONTEXTUALIZING ENTREPRENEURIAL

TEAMS

Allan Discua Cruz, Elias Hadjielias and Carole Howorth

10 Te Ohu Umanga Māori: temporality and intent in the Māori

Mānuka Hēnare, Billie Lythberg, Amber Nicholson and Christine Woods

11 Ethnic diversity in entrepreneurial teams and the role of

Jean- François Lalonde

12 Women empowerment through Government Loaned

Mary Wanjiru Kinoti, Moses Kibe Kihiko and Thomas M Cooney

13 Entrepreneurial teams in social entrepreneurship: when team

Frédéric Dufays and Benjamin Huybrechts

Howard E Aldrich is Kenan Professor of Sociology, University of

North Carolina at Chapel Hill, USA Howard’s main research

inter-ests are entrepreneurship, entrepreneurial team formation, gender and

entre preneur ship, and evolutionary theory His book Organizations

Evolving (Sage, 1999) was co- winner of the Max Weber Award from

the Organizations, Occupation and Work section of the American

Sociological Association His latest book An Evolutionary Approach

to Entrepreneurship: Selected Essays was published by Edward Elgar

Publishing in 2011

Cyrine Ben- Hafạedh is Assistant Professor of Entrepreneurship and

Strategy, IÉSEG School of Management (LEM- CNRS), Paris, France

Cyrine’s doctoral thesis focused on the topic of entrepreneurial team

formation and won two Best Dissertation Awards Her research now

centres on entrepreneurial teams and collective entrepreneurship, and she

explores these topics through various contexts (e.g., ambition, academic,

social, etc.) Her work has been published in peer- reviewed journals and

books, and she has received several Best Conference Paper Awards She

serves as a reviewer for several international journals in the field, and

she has won a number of Best Reviewer Awards (including two from the

Academy of Management Entrepreneurship Division) Cyrine is currently

the Country Vice- President for France in the European Council for Small

Business and Entrepreneurship

Malte Brettel is Professor of Business Administration and

Entrepreneur-ship at RWTH Aachen University, Germany, where he is also running the

entrepreneurship centre Malte is also Adjunct Professor for

Entrepreneur-ship at WHU – the Otto- Beisheim School of Management in Germany

and is co- founder of several successful businesses

Giovanna Campopiano is Assistant Professor at the Chair of Business

Administration and Family Entrepreneurship, Witten Institute for Family

Business (WIFU), University of Witten/Herdecke, Germany Giovanna

mainly focuses her research on management issues in family business,

looking in particular at the involvement of the family in the business and

its effect on firm performance, corporate social responsibility,

sustain-ability issues and entrepreneurial activities She has published her research

in academic journals such as Family Business Review, Journal of Business

Ethics , Journal of Small Business Management and Journal of Family

Business Strategy She organizes a track in the Family Business Strategic

Interest Group of the European Academy of Management (EURAM)

conference and serves as reviewer for several journals in the field

Lucio Cassia is Professor of Strategic and Global Management and

Chair-man of the Research Center for Young and Family Enterprise (CYFE)

at the University of Bergamo, Italy Lucio teaches strategic management,

corporate strategy, competition and growth and entrepreneurial strategy

in graduate, postgraduate and PhD programmes He is currently leading

research, education and consulting on entrepreneurship, business strategy

and family business His main interests are on technology- based start- ups,

high- tech companies, innovation tools and patterns of growth of small

and medium enterprises With particular focus on the topics of youth

entre preneur ship, growth of family businesses, managerial succession and

generational change, Lucio promoted and founded the CYFE Lucio has

published ten books and over 150 papers in academic and professional

journals

L Martin Cloutier, PhD, is a full-professor in the Department of

Management and Technology, School of Management (École des sciences

de la gestion, ESG), at the University of Quebec at Montreal His research

programme centres on investigating, in various contexts, problems and

issues of concern to groups or collectives, using systems-based

decision-making approaches and methods to modelling such as system dynamics

(SD) and group concept mapping (GCM) With the co-authors of his

chapter in this volume, he has examined the collective representations of

entrepreneurial development and support actors and stakeholders for very

small ventures in entrepreneurial support infrastructures and incubators

in Canada and in France He has published 30 referred articles on

mana-gerial economic related problems using system-based approaches (R&D

Management , International Journal of Technology Management, Drug

Discovery Today , Journal of Economic Issues, International Journal of

Wine Business Research , Industrial Management & Data Systems, Journal

of Decision Systems and Revue Internationale PME).

Thomas M Cooney is Professor of Entrepreneurship, at the College of

Business, Dublin Institute of Technology (DIT), Ireland and Academic

Director of the Institute for Minority Entrepreneurship at DIT Tom

is also Visiting Professor at the University of Turku, Finland, editor of

the journal Small Enterprise Research and policy advisor to the Irish

government, European Commission, OECD and other international

organizations His primary research interests are in entrepreneurial teams

and entrepreneurship for disadvantaged/minority communities Further

details of his work can be found at www.thomascooney.com

Sandrine Cueille is a ‘Maître de Conférences’ in Management Sciences,

Université de Pau et des Pays de l’Adour, France Sandrine’s research

programme focuses on the strategic practices of organizations evolving

in complex environments, in particular on health care organizations

and also on young entrepreneurial ventures benefiting from incubators

and other types of business support Her current research interests are

mainly centred on entrepreneurial ecosystems, entrepreneurial teams,  and

growth patterns of recently created firms – notably high-tech companies

Along with the co-authors of her chapter in this volume, she conducted

studies on these topics using bottom-up mixed methods to capture the

collective representations of entrepreneurial actors in order to encompass

the systemic interactions and the complexity of the examined phenomena

Johan P de Borst is a doctoral researcher at the Hunter Centre for

Entre-preneur ship, Strathclyde Business School, University of Strathclyde, UK

Johan is a fully funded doctoral researcher at Strathclyde where he is

investigating the intersection of income, well- being and personality of the

microentrepreneur He holds an MBA from Babson College, USA and

was the Babson European Scholarship Award winner in 2012 He also

has extensive experience working with and in start- ups including at Mass

Challenge in Boston, and as a graduate of the Babson College Summer

Venture Program, and is the author of The Stingy Startup, a book taught

at undergraduate level

Allan Discua Cruz is a Lecturer in Entrepreneurship in the Department

of Entrepreneurship, Strategy and Innovation, Lancaster University

Management School, UK Allan is a founding member of the Centre

for Family Business at Lancaster University and a member of a business

family He has published on the topics of family entrepreneurial teams

and entrepreneurship in family business His current research focuses on

entrepreneurial teams and social contexts of entrepreneurship

Frédéric Dufays is a postdoctoral researcher at KU Leuven, Belgium He

coordinates the Centre of Expertise for Cooperative Entrepreneurship

Frédéric holds a PhD in Management from HEC Liège Management

School of the University of Liège, Belgium, for which he received the

support of the FRS-FNRS through a FRESH grant His research interests

include social entrepreneurship as well as the emergence of hybrid

organi-zations, among which cooperatives, as well as collective dynamics (teams

and networks) in entrepreneurship

Elias Hadjielias is a Lecturer in Entrepreneurship, MBA Program Leader,

and Director of CEDAR (Centre for Entrepreneurial Development,

Alliance and Research) at UCLan Cyprus His research interests include

collective entrepreneurship in family businesses, cooperation within and

between family businesses, and entrepreneurial learning between family

members in business Elias has also consulting experience in start- ups and

new venture development

Mānuka Hēnare is an Associate Professor of Māori Business Development,

Department of Management and International Business, University of

Auckland Business School, New Zealand Mānuka is a consultant and

researcher in the private sector with a speciality in Māori business

enter-prise and development economics He joined the University of Auckland

Business School in 1996 where he is responsible for Māori business

devel-opment Mānuka is also the Foundation Director of the Mira Szászy

Research Centre for Māori and Pacific Economic Development and leads

a number of multidisciplinary research project teams

Carole Howorth is Professor of Entrepreneurship and Family Business,

University of Bradford Management School, UK Carole is Associate

Dean for Research at the University of Bradford She is Chair of the Global

STEP Program for family enterprising and of the Academic Advisory

Panel for the Institute for Family Businesses Research Foundation She

was Founding Director of the Centre for Family Business at Lancaster

University and currently serves on its Advisory Board

Benjamin Huybrechts is Associate Professor, HEC Liège Management

School, University of Liège, Belgium Benjamin holds the SRIW-

Sowecsom Chair in Entrepreneurship and Social Innovation His research

topics include novel hybrid organizational forms in the area of social

enterprise, the emergence and diffusion of social innovation, and cross-

sector partnerships and networks

Moses Kibe Kihiko is a PhD candidate, School of Business, Mount

Kenya University, Kenya Moses is a scholar, writer, book reviewer and

book chapter contributor, holds a Master’s in Leadership Studies and

is pursuing a PhD in Business Administration & Management He was

the 2009 best overseas entrant of Ashridge Business School & Guardian

Public annual writing competition and is a published author of Public

Leadership: The Ten Defining Moments How Leaders Acquire and Handle

Fame, Power and Glory (Miraclaire Publishing, 2010) and is currently

working on a book entitled Engaging Corporate Social Responsibility

Moses is a monthly columnist known as ‘The Scholar’ in Small Medium

Enterprises Today (SMET) magazine and is the founder/CEO of Practicum

Leadership Consultancy (PLC) and accepts training, consultancy, research

and writing opportunities in various corporate, public and private firms in

the areas of business and entrepreneurship, organizational development,

management, leadership and strategy

Phillip H Kim is Associate Professor of Entrepreneurship, Babson College,

USA Phil studies, teaches, and advises on different aspects of how

entre-preneurial ideas become reality His research has been published in

leading entrepreneurship, management, and sociology journals His views

on entrepreneurship and innovation have appeared in The Wall Street

Journal , The New York Times, Forbes, and other prominent media outlets.

Mary Wanjiru Kinoti is a Senior Lecturer and Associate Dean of Graduate

Business Studies at the School of Business, University of Nairobi, Kenya

She holds a PhD in Business Administration and is a seasoned university

lecturer with her experience spanning almost two decades She has taught

at the Kenya Institute of Management (KIM), Egerton University, Kenya

and currently is based at the University of Nairobi where she lectures in

marketing She is passionate about the marketing of small and medium

enterprises, as well as green marketing and sustainable development

courses Mary has authored several articles published in refereed journals

and is also working on a number of books contextualized for Africa

Jean- François Lalonde is Professor of Entrepreneurship, University of

Sherbrooke, Canada, where he teaches entrepreneurship He is the author

or co- author of articles, book chapters, lectures and case studies in

preneurship His research focuses on the links between culture and

entre-preneurship He is involved in the development of entrepreneurship in his

community by helping young entrepreneurs and non-profit enterprises

Jonathan Levie is Professor of Entrepreneurship and Director of Teaching

and Knowledge Exchange at the Hunter Centre for Entrepreneurship,

University of Strathclyde, Glasgow, UK He is also the Ambition and

Growth Research Theme Leader in the UK’s Enterprise Research Centre,

co- directs Global Entrepreneurship Monitor (GEM) UK, and is a member

of the Research and Innovation Committee of GEM He has published in

the Journal of Management Studies, Research Policy, Entrepreneurship

Theory & Practice , Small Business Economics, Family Business Review,

and Journal of Technology Transfer, among others His main current

research areas are entrepreneurship ecosystems, venture growth,

technol-ogy commercialization, and entrepreneurship policy

Billie Lythberg is a Senior Research Fellow at the University of Auckland

Business School, New Zealand Billie works at the junction of economics,

anthropology and art history, specializing in ethnographic studies and

object- centric research Her core research interests are Indigenous

economies and aesthetics, with particular foci on Polynesian arts,

entre-preneurship and ‘gift exchange’ She is especially interested in

possi-bilities for reframing historical interactions and collaborations between

Europeans and Polynesians, and their material, artefactual and

philo-sophical legacies for contemporary communities She is an Affiliated

Researcher at Cambridge University Museum of Archaeology and

Anthropology (UK), and Contributing Editor to the Art of Oceania for

Khan Academy, USA

René Mauer is Chair of Entrepreneurship and Innovation, ESCP Europe

Berlin, Germany René joined ESCP Europe’s Berlin campus for the

Chair of Entrepreneurship and Innovation in 2015 He received a doctoral

degree in the area of entrepreneurship from RWTH Aachen and has been

involved in a variety of entrepreneurial projects His area of expertise is

entrepreneurial decision- making in venture and corporate contexts

Tommaso Minola is Director of the Research Center for Young and Family

Enterprise (CYFE) and Lecturer in the field of Technology Management,

Entrepreneurship and Strategy within the Department of Management,

Information and Production Engineering at the University of Bergamo,

Italy Tommaso’s research interests focus on the embeddedness of

entre-preneurship, embracing different aspects of the entrepreneurial process

from intention and cognition, to behaviour and performances In

par-ticular Tommaso focuses on two distinctive domains of embeddedness –

university and family He is TOFT Visiting Professor at Jönköping

International Business School (Sweden) and National Representative

for Italy in the GUESSS research consortium His work is published or

forthcoming in several academic journals, including Entrepreneurship

Theory and Practice , Strategic Entrepreneurship Journal, Small Business

Economics , Journal of Small Business Management, R&D Management,

and The Journal of Technology Transfer He is member of several

aca-demic and professional associations, and reviewer for major international

journals in the field

Amber Nicholson is a PhD student at the University of Auckland Business

School, New Zealand Amber, of Māori kinship group Ngāruahine, is

a researcher at the Mira Szászy Research Centre for Māori and Pacific

Economic Development Her current doctoral research, ‘Arohia ngā

tapuwae o ngā tūpuna: Heed the footprints of the ancestors’, looks at the

how the energy of ancestral landscapes shape business She completed

a Bachelor of Commerce with First Class Honours in 2012 titled ‘A

Takarangi of Well- being: An Ambicultural Approach to Business and

Economics’

Gilles Recasens is a ‘Maître de Conférences’ in Management Sciences,

Université de Pau et des Pays de l’Adour, France Gilles’s research

programme investigates, on the one hand, enterprise- related financial

stress, using game theory to model relationships between stakeholders

in an imperfect information framework, and case studies to understand

how bankruptcy law impacts entrepreneurial actors’ actions in avoiding

financial stress On the other hand, his research focuses on entrepreneurial

issues such as the structuring of the entrepreneurial team within young and

small firms, the exploration-exploitation dilemma faced by young

technol-ogy start-ups, the growth of very small enterprises as part of an

accom-panied business-support relationship and, in particular, by taking into

account the role of entrepreneurial ecosystems in sustaining these

transi-tions These works use case study research approaches and group concept

mapping methods to identify and analyse the collective representations of

entrepreneurs and business support providers on such matters, in various

entrepreneurial support contexts in Canada and France

Stephanie Schoss is a PhD candidate, RWTH Aachen University, Germany

and Institute Director, University of St Gallen in Switzerland Stephanie

is a serial entrepreneur and a doctoral student at the RWTH Aachen

University where she studies the deep- level diversity dimensions of

entre-preneurial teams She is also a Director of the Competence Center for Top

Teams at the Institute of International Management at the University of

St Gallen

Donald Vredenburgh is a Professor of Organizational Behavior in the

Department of Management at Baruch College, The City University

of New York, USA His research has focused on leadership,

organiza-tional design, the exercise of power in organizations, and organizaorganiza-tional

politics Administrative positions in academe have included Associate

Provost, Director of a doctoral programme in business, and Director of an

Institutional Review Board He has consulted for various organizations

Christine Woods is Associate Professor in Entrepreneurship and

Innovation, Faculty of Business & Economics, University of Auckland,

New Zealand Kiwi born and bred, Christine’s interest in entrepreneurship

was sparked after working in Malawi as a small- business advisor There

she ‘caught’ the entrepreneurship bug, becoming ‘hooked’ on the passion

and energy that entrepreneurs bring to what they do Chris currently

teaches entrepreneurship at both undergraduate and postgraduate levels,

as well as Māori Entrepreneurship, a component of the Postgraduate

Diploma in Māori Business Her research interests are in the area of family

business, SME growth, social entrepreneurship and Māori

entrepreneur-ship and entrepreneurial behaviour

Wencang Zhou is Assistant Professor of Management in the School

of Business at Montclair State University, New Jersey, USA His

research focuses on the psychology of entrepreneurship, particularly on

entrepreneurial teams, team diversity and shared leadership

In the popular imagination, entrepreneurship is still often times viewed as

being the domain of heroic (or villainous!) individuals Yet, in the modern

enterprise environment, entrepreneurial teams have a greater tendency

to be the norm Unfortunately, research on entrepreneurial teams has

tended to lag behind this recognition of reality on the ground and so

practitioners have had relatively little guidance from systematic research

findings Actually, much of the early research on entrepreneurial teams

drew heavily on research on top management teams in larger

corpora-tions without fully taking account of the differences between these two

organizational contexts Moreover, a particular feature of entrepreneurial

teams is the need to make changes in composition and functions that will

enable a venture to develop beyond the start- up phase, activities that are

associated with team member exit as well as entry (as my own research

subsequently explored)

To be effective, entrepreneurial teams need to have some diversity of

expertise but our knowledge of the appropriate nature of diversity is

frag-mentary at best In particular, while we know that contexts are important

for understanding the variety of entrepreneurial activity, we have had little

insight into the appropriate nature of entrepreneurial team diversity in

different contexts This volume brings together a wealth of empirical

find-ings that take the body of research knowledge on entrepreneurial teams

in different contexts a significant step forward The findings address not

only the role of differences in team size and the characteristics of team

members, but also the influence of different cultural, ethnic and

institu-tional environments The volume also highlights the importance of

dif-ferences in the organizational forms of entrepreneurial ventures, notably

family firms and social enterprises, on the nature of entrepreneurial teams

Entrepreneurial ventures involve more than high- tech start- ups aimed

at maximizing financial returns They also involve a variety of ventures

with different ownership forms and goals that are likely to have

implica-tions for team configuraimplica-tions that as yet are little understood By adopting

a variety of valid methodological approaches, the studies in this volume

emphasize the complexity of the research agenda and the challenges in

obtaining access to relevant data The studies therefore provide an

excel-lent starting point in mapping out the gaps in our knowledge base on

entrepreneurial teams They point the way to exploring the rich agenda for

further studies regarding the drivers of the variety of diversity in

entrepre-neurial teams and this will have profound implications for both research

and practice

Mike WrightCentre for Management Buy- out ResearchImperial College Business School, London

1 Introduction

Cyrine Ben- Hafạedh and Thomas M Cooney

‘It is difficult to clap with one hand’ is arguably a very appropriate Chinese

saying with which to introduce a book entitled Research Handbook on

Entrepreneurial Teams: Theory and Practice In recent years, there has

been an increasing body of evidence suggesting that firms founded by

entrepreneurial teams are more likely to achieve fast growth than firms

founded by lone actors, and for this reason entrepreneurial teams have

become of escalating interest to scholars and practitioners alike The

research has also identified that firms founded by multiple individuals

are fluid and team based, they give authority to those employees with

the greatest knowledge of a specific area, and their growth strategies can

emerge from anyone within the organization They also have an innate

sense of networking since good communication is a crucial component of

successful teams Yet, it has also been noted that there has been a dearth

of literature regarding our understanding of entrepreneurial teams and

even the expression ‘entrepreneurial team’ has frequently been used

inter-changeably with the term ‘management team’ when writers have been

discussing small firms However, in more recent times there has been a

marked increase in the number of journal articles, books and popular

press stories addressing the topic of entrepreneurial teams but our

com-prehension of them and their relationship with growth remains very weak

The book begins in Part I with a detailed review of the literature by

Ben- Hafạedh in Chapter 2, which will help the reader to understand the

development of research and theories on entrepreneurial teams over time,

and it offers clarification of the different terminology used by research

scholars The chapter will also contextualize the movements that have

occurred in developing an understanding of entrepreneurial teams and

how they have led to our current perceptions of this form of enterprise

Kim and Aldrich in Chapter 3 superbly counterbalance this chapter as

they review the development of entrepreneurial teams from a practitioner

perspective They analyse articles and stories from the popular press and

Internet channels to examine the most common forms of advice that is

offered regarding constructing and growing entrepreneurial teams As

one might imagine, their findings both agree and disagree with the work

of academic researchers who are seeking scientific evidence to support

their theories rather than anecdotal stories of experiences and actions

The two chapters combine very effectively to offer the reader an excellent

understanding of the history and current positioning of entrepreneurial

teams amongst both the academic and practitioner communities

Team entrepreneurship appears to be much more prevalent in some countries and industries than in others due to influencing factors such as

culture, society and the nature of specific industries Indeed, the

combina-tion of culture and individual characteristics will shape the likelihood of

potential entrepreneurs starting a business on their own or in

conjunc-tion with like- minded colleagues For example, entrepreneurs who will

seek to maintain 100 per cent ownership of their enterprise rather than

share equity amongst other stakeholders will find that that this mindset

adversely affects the prospect of entrepreneurial teams being formed

and the sharing of any subsequent rewards It also encourages singular

decision- making and hierarchical structures because ‘the entrepreneur is

the boss’! Given that research has suggested that entrepreneurial teams

impact positively on firm growth, then a greater sense of inclusiveness

needs to happen in team formation and this can be challenging for many

people whose background or characteristics might promote a more

indi-vidualistic approach to life Furthermore, while early research on

entre-preneurship identified that attitude and mindset are key characteristics

of successful entrepreneurs, more recent research has identified that team

entrepreneurs require a mindset that is inclusive, shares responsibilities

and divides rewards equitably Communication is also highly important to

successful entrepreneurial teams as they need to share information, ideas

and authority Communication is not just given to employees on a need-

to- know basis but as a method of getting all stakeholders to better

under-stand their roles regarding the potential prosperity of the enterprise This

communication occurs via networks and is not passed down through a

multilayered hierarchical structure Additionally, research has shown that

the entrepreneurs of fast- growth firms believe that attention to customer

needs and quality products/services are important to the growth of their

business, and that ultimately the success of a firm is everyone’s

respon-sibility, not just that of management All of these characteristics lead to

varying explanations regarding why entrepreneurial teams are

increas-ingly responsible for fast- growth firms rather than enterprises founded

by lone actors and they reinforce the critical importance of the formation

stage of entrepreneurial teams as a ‘good start’ that can have a major

influ-ence on the future growth patterns of an enterprise

Part II of the book explores many of the different issues involved in the formation of entrepreneurial teams and through new research studies it

offers greater understanding and insight relating to this aspect of

entre-preneurial team activity In Chapter 4, Campopiano, Minola and Cassia

explore the role of family within the formation of entrepreneurial teams

and they find that there is a positive effect when family provide both

human and social capital The chapter focuses on the antecedents that

drive potential entrepreneurs to include family members in entrepreneurial

teams and reconcile the inconclusive results present in existing literature

on the role of family cohesion and family capital as factors that may foster

or hinder the propensity of potential entrepreneurs to form an

entrepre-neurial team with their relatives It should be noted that the positive

influ-ence of family can also be seen in Chapters 9 and 11, even though the main

focus of those chapters is contextualization rather than family members

Chapter 5 from Cloutier, Cueille and Recasens highlights the use of

group concept mapping (GCM) as a relatively new research

methodol-ogy to explore the structuring phase of entrepreneurial teams from the

perspective of entrepreneurs The GCM process provides some shared

indications regarding scope, breadth and depth of action areas underlying

entrepreneurial team development and discusses how the shared

concep-tual framework obtained from these analyses can be translated to suggest

a set of best- practice propositions The chapter additionally stresses the

balancing act that entrepreneurial teams face at the structuring phase

of development between managing the venture and building it from the

resource pool

Another aspect of entrepreneurial team formation that is examined

in the book is the dispositional personality–related characteristics of

founding team members as leading indicators of new venture success

In Chapter  6, Schoss, Mauer and Brettel highlight that the difference

between a successful and an unsuccessful team relates to the

combina-tion of sufficiently distinctive personality types that form a team Their

analysis reveals that balanced individuals who simultaneously show high

levels of multiple traits appear more often in unsuccessful teams, while

individuals with fewer but more strongly developed traits are to be found

in successful teams The research method of cluster analysis serves to

develop a better understanding of which personality characteristics are

most important to team success and how the traits cluster together to form

specific team types

Moving on from this understanding of personality types, Chapter 7

by Levie and De Borst examines the relationship between team size and

the potential economic contribution of early- stage and established

busi-nesses Their chapter presents evidence that, in addition to having a strong

direct effect on the economic potential of early- stage and established

firms, larger teams are associated with greater economic potential in more

complex, knowledge- intensive businesses and with higher growth

expecta-tion where owner- managers have higher educaexpecta-tion levels

The final chapter of Part II focusing on entrepreneurial team formation

is Chapter 8 from Zhou and Vredenburgh whose research investigates the

dispositional antecedents that facilitate the development of shared

lead-ership and the performance consequence of this leadlead-ership model The

chapter suggests that entrepreneurial team founders, to benefit from the

informational diversity that team members desirably bring, should share

leadership, and the authors emphasize that each team member should be

willing and able to assume leadership roles when tasks require

Part II of the book offers a number of interesting perspectives regarding the formation of an entrepreneurial team and cumulatively they propose

a broadening of one’s understanding of this aspect of entrepreneurial

activity The influence of family, team size, personality types and shared

leadership all contribute positively to the potential success and growth of

a new venture but how they are utilized and developed is at the mercy of

individual entrepreneurs

As highlighted earlier, there is a body of evidence that suggests that fast- growth firms are more likely to be founded by entrepreneurial teams

than by lone actors, and the research also suggests that the strategy

utilized by fast- growth firms led by entrepreneurial teams is emergent

at the start- up phase but moves to being deliberate as the firm matures

This means that their strategies were continuously emerging at the

beginning, but later were more planned To use Mintzberg’s analogy,

at the beginning they were like clay on a potter’s wheel, where one had

a broad idea of what was to be moulded but it only took definite shape

as the process evolved However, with time and experience the potter

would know exactly what they were going to produce over the coming

weeks and months, although new forms might continue to be moulded

in order to introduce new product lines With an emergent strategy these

new forms can be suggested by anyone in the organization, as frequently

those closest to the product or customer will have the clearest ideas of

where improvements can be made Strategies are deliberate when they

are planned and disseminated throughout the organization in a managed

process so that everyone understands them Strategies should not be

written in stone, but a clear sense of where the company wants to be in

three years is critical to achieving success Fast- growth firms led by

entre-preneurial teams frequently identified growth markets as a starting point,

and after they built a base in those markets they then moved towards the

quality end of the market Therefore, the lesson for entrepreneurial teams

regarding strategy is to begin by moulding a strategy and then as time

progresses to develop that mould However, this nuancing of strategy is

heavily influenced by the context in which an entrepreneurial team

oper-ates and such a context might involve family, gender, culture, ethnicity or

goal orientation of the firm These contexts greatly affect the ambitions

and philosophy of an enterprise and so Part III of the book discusses a

variety of contextual situations in which an entrepreneurial team might

operate and how strategies are shaped by context, as well as by

entrepre-neurial teams

Part III begins with a review by Discua Cruz, Hadjielias and Howorth

in Chapter 9 of the literature on family entrepreneurial teams Families

have tended to be overlooked in studies of entrepreneurial teams but this

chapter draws on knowledge of entrepreneurial teams and family

busi-nesses in order to explain family entrepreneurial teams’ functions and

outcomes It highlights that family entrepreneurial teams represent a

distinctive context for entrepreneurship, where stewardship drives team

efforts, kinship ties determine team membership, and informal social

cooperation, communal thinking and intergenerational learning practices

prevail in the modus operandi

It is arguable that indigenous communities represent a larger notion of

family and Chapter 10 by Hēnare, Lythberg, Nicholson and Woods on

Māori entrepreneurial teams is a wonderful extension of this concept The

authors argue that Māori entrepreneurial teams harmonize the collective

intent and complementary attributes of individual members, and balance

heritage with innovation This chapter focuses on two clusters of values –

temporality and intent – to demonstrate that the relationship between

entrepreneurship and cultural values determines the composition of, and

guides toward success, the Māori entrepreneurial team

Part of this chapter taps into the importance of ethnicity and Lalonde

addresses this more fully in Chapter 11 This chapter presents and

dis-cusses the issues relating to one kind of diversity in entrepreneurial teams

that is more common as the world becomes more global – that is, ethnic

diversity It focuses on the dynamics of these groups and examines why

and how this form of diversity influences a firm’s performance

Moving from heterogeneous teams to homogeneous teams, Chapter 12

by Kinoti, Kibe Kihiko and Cooney examines entrepreneurial teams

formed by women The chapter analyses the impact of the Women

Enterprise Fund (WEF), which was established by the Kenyan

govern-ment to address the issue of poverty and unemploygovern-ment amongst the

country’s female population The research found that delays in funding

from WEF, illiteracy and loan diversion by women were among the key

challenges that needed to be addressed if the women- owned

entrepre-neurial teams were to be successful While in much of the book success is

spoken about in terms of high growth, in this study success is measured

by the ability of an entrepreneur to generate enough income to sustain her

family

The final context in which entrepreneurial teams are explored is through social enterprise In Chapter 13, Dufays and Huybrechts examine the

composition of teams involved in social entrepreneurship, and more

particularly their heterogeneity in terms of ‘institutional logics’, which

has received little attention in entrepreneurship literature The chapter

highlights the potential added value and pitfalls of entrepreneurial teams

in institutionally complex settings such as social entrepreneurship and a

model is proposed that examines the implications of entrepreneurial team

heterogeneity in social entrepreneurship It makes clear that complexity

and dynamism, in particular with regard to individuals’ social network

structure, as well as interactions between team members, are necessary

to understand the impact of team composition on the entrepreneurial

process

Collectively the five chapters in Part III offer the reader varying contexts from which entrepreneurial teams can emerge and highlight the additional

and distinctive challenges that entrepreneurial teams must address in such

circumstances Just as in Part II when exploring the formation of

entrepre-neurial teams, in this part of the book the development of entrepreentrepre-neurial

teams cannot be considered in a simplistic linear fashion but must be

understood through the complexities and nuances of its given context

There are a number of lessons for scholars, practitioners and policy- makers from the findings of this book While the literature suggests that

firms founded by entrepreneurial teams are more likely to achieve fast

growth than firms founded by an individual, the chapters in this book

do not question this view because that was not the key objective of the

book However, the findings of the various research studies undertaken

for the book do accentuate the characteristics of sharing and inclusiveness

in entrepreneurial teams, which arguably contribute significantly to the

greater likelihood that fast- growth firms are founded by entrepreneurial

teams rather than by lone actors Therefore, the entrepreneurial ecosystem

should encourage firms to be founded by teams but these teams should not

be unnaturally generated, as was noted in Part II Entrepreneurs can be

encouraged to build teams and find co- founders without forcing them into

that situation since engendering team entrepreneurship is about nurturing

rather than coercion

While the practice of ‘picking winners’ has had a great deal of support

in recent years amongst many enterprise agencies across the globe, there

are a number of problems with this concept The first is the question of

what measures are used to pick ‘winners’ If a set criterion is employed

then there is the definite possibility of losing potential successes because

the relevant agency has already labelled those outside the criterion as

‘no- hopers’ Therefore, it is potentially more fruitful to encourage a

broader range of entrepreneurs to start an enterprise, knowing that some

(or many) will fail, but that the more likely winners will potentially come

from those who have failed and then tried again Entrepreneurs who have

been separated from their initial teams should be encouraged to start

again However, enterprise agents are commonly assessed on their short-

term records and therefore a radical change in policy is required if the

potential winners are to be given the freedom to fail and then to start again

as a member of another team It also requires a change in attitude in many

cultures that failure is acceptable, and that it is a learning process towards

long- term achievement Both of these requirements necessitate significant

alteration in existing mindsets, and unfortunately are therefore unlikely to

occur in the near future This book suggests new ideas on how such change

might happen!

This book offers a wide range of research methodologies, perspectives

and insights that will enlighten any reader, whether they are a scholar,

practitioner or enterprise support agent The book is structured to enable

the reader to ‘dip in and out’ of the work and not be required to read it

in its entirety in one sitting However, it would be advisable to read some

chapters at one sitting so that the comparative viewpoints and findings

on a specific topic can be contrasted and this will enable the reader to

achieve enhanced learning from their comprehension of the book The

discussions in the various chapters will challenge current perspectives and

offer interesting new approaches to various aspects of entrepreneurial

teams The book is an important contribution to the growing significance

of entrepreneurial teams as the preferred future structure of new ventures

PART I LEARNING FROM THEORY AND PRACTICE

2 Entrepreneurial teams research in

movement

Cyrine Ben- Hafạedh

While it has been 40 years since Jeffry A Timmons wrote about

entre-preneurial teams (ETs) and wondered whether they were ‘an American

dream or nightmare?’ (Timmons, 1975), research into this topic remains

relatively recent Indeed, it was the early 1990s before Kamm and her

colleagues published their seminal research agenda on ETs (Kamm et al.,

1990) but it has only been over the past 15 years that there has been an

exponential increase in research on ETs with no less than three academic

journal special issues devoted to this topic (International Small Business

Journal , June 2005; Management Research News, 2009; Entrepreneurship

Theory & Practice, January 2013) This pattern is consistent with the

history of entrepreneurship research that has been long marked by the

reification of the phenomenon in a deus ex machina entrepreneur (Ogbor,

2000) However, the collective reality of entrepreneurship (Johannisson,

2003) and, more specifically the importance of team entrepreneurship,

could not be overlooked much longer It has become increasingly

dif-ficult to keep neglecting the quantitative and qualitative importance of

ETs as most new ventures are now team based (at least one- half and up

to 79.1 per cent in a recent survey of European start- ups) (Watson et al.,

1995; Lechler, 2001; Kollmann et al., 2015), and some research has shown

that they tend to register superior performance (e.g., growth) to their solo

counterparts (Birley and Stockley, 2000; OECD, 2003)

Even though ETs are now getting the scholarly recognition that they

deserve, the overall number of research articles addressing this topic

remains reasonably low There are a number of recent articles that review

existing literature on ETs, with each of them focusing on a specific

issue For example, Zhou and Rosini (2015) examine the link between

ET diversity and performance, Klotz et al (2014) focus their attention

on the intermediary mechanisms that explain how team inputs lead to

team effectiveness, while De Mol et al (2015) are concerned with ET

cognition This chapter complements these review articles by

examin-ing ETs research in movement Movement is first considered from a

developmental stages’ perspective as this chapter critically reviews ETs

literature following the three main phases of an ET: forming, functioning

and evolving Then, taking a more holistic approach, the chapter seeks to

capture the signals of the current evolution of ETs research In

identify-ing the key lessons that are beidentify-ing learned, this chapter also outlines how

future research efforts could be reinforced and developed in the most

impactful ways

DEFINING THE TERM ‘ENTREPRENEURIAL TEAM’

In order to identify articles and research relating to ETs, this chapter

relies on the numerous denominations used for ETs (Schjoedt et al.,

2013) The initial list was completed through a broad search with

the terms ‘entrepreneur’ and ‘team’ as keywords in an academic web

search engine (Google Scholar) and by checking the articles citing those

retrieved Having completed this process, the following terminologies are

considered appropriate terms for further investigation: ET,

entrepreneur-ial top management team, new venture team, new venture top

manage-ment team, venture team, founding team, founder team, start- up team,

team venture They were used as keywords for a query in titles, abstracts,

subjects and keywords, restricted to academic journals, on EBSCO’s

Business Source Complete database (scholarly business database) and

on the Social Sciences Citation Index (the most comprehensive database

of peer- reviewed journals in the social sciences, accessed via Thomson

Reuters Web of Science, formerly ISI Web of Knowledge) The plural

forms were also considered The results span 40 years The earliest

iden-tified paper was published in 1975 (Timmons, 1975) and the query was

last updated in January 2016 The two databases combined cover all of

the quality entrepreneurship and small business academic journals (ABS

2010 Ranking; Journal Quality List 2012) An analysis of the hundreds

of research hits led to a final unified sample of 121 articles Articles that

did not have ETs as a primary focus were excluded as well as any articles

on corporate ETs The articles that were identified as being appropriate

to the literature review were thoroughly analysed utilizing the focus of

‘movement’ in this chapter

In trying to find the ‘entrepreneur’ in entrepreneurship, Gartner et al

(1994, p 6) argue that ‘the locus of entrepreneurial activity often resides not

in one person but in many’ They are referring to the individuals who might

have some direct strategic influence on the development of a venture and so

the members of an ET should be searched for amongst them There are two

main approaches that could be taken to identify such characters: by

inclu-sion or by excluinclu-sion For the first approach, three main identification

crite-ria emerge from the literature: founder, owner and top manager (Table 2.1)

It has been suggested that the definition of an ET by Kamm et al (1990) is

the most used in the literature (Cooney, 2005); they state that:

[ .]we define an ET as two or more individuals who jointly establish a business

in which they have an equity (financial) interest These individuals are present

during the pre- start- up phase of the firm, before it actually begins making its

goods or services available to the market (Kamm et al., 1990, p 7)

Watson et al (1995) add the condition that the founders- owners also

‘actively participate’ in the business, while Ensley et al (2002) specify

the ‘active involvement’ as being involved in ‘strategic decision- making’,

indicating that the ET members should not only be managers but ‘top’

managers Many authors researching ETs simply do not define their

research object (Schjoedt and Kraus, 2009) and those who do generally

combine two or three of the main criteria (see Table 2.1) The major

exist-ing differences in definitions therefore lie both in the combinations and in

the ways that the terms are captured Cooper and Daily (1997) argue that

Table 2.1 Defining entrepreneurial teams: three main identification

criteria

Authors of the

Definitions, in

Chronological Order

Founder Owner (Top)

Manager Reason for Inclusion

Ucbasaran et al

(2003) X X X Reunion of the three updated conditions.

Cooney (2005) X X Special issue on ETs’ editorial.

Schjoedt and Kraus

(2009) X X Special issue on ETs’ editorial.

Klotz et al (2014) X Recent literature review

Neither founder status nor ownership criterion are specifically mentioned An ET here is akin to a new venture top management team.

while ‘founders’ is what usually comes to mind when thinking about ETs,

someone joining the entrepreneur(s) after founding should also be

sidered as part of the ET While Cooney’s (2005) definition would

con-sider prospective team members joining at any stage of the maturation

of the firm, other definitions such as Schjoedt and Kraus’s (2009) would

only consider the early phases of the venture Ensley et al (2002) argue

that two out of the three conditions should suffice, while Ucbasaran et al

(2003) consider that the three should be met More recently, Klotz et al

(2014, p 227) define an ET as ‘the group of individuals that is chiefly

responsible for the strategic decision making and ongoing operations

of a new venture’ Ownership is not discussed and the founder status

is apparently not a requirement This definition thus appears to focus

on a sole criterion and the authors do indeed state that in reality it is a

new venture top management team (but that they preferred to avoid this

terminology)

Beyond the different combinations of these three main criteria, a plementary approach to ET member identification enables one to exclude

com-actors that are not considered by the entrepreneurs as part of their teams

but who could comply with the conditions above These are notably early

employees and investors An important condition, highlighted in Schjoedt

and Kraus’s (2009) definition, is in the social unit concept: members of

an ET are seen as a social entity by themselves and by others, which

sug-gests that there is a mutual recognition between ET members Cardon

et al (2016, p 4) also argue that members of the ET are ‘distinct from

other groups such as outside funders of the venture or external boards of

investors’

This chapter suggests that it would be beneficial to combine the two approaches to ET identification An ET member should meet at least two

out of the three inclusion criteria that the literature has highlighted (see

Table 2.1) Moreover, strategic actors (Gartner et al., 1994) who comply

with the conditions above but who are not recognized by the others as part

of the ET should be excluded The combination of these two approaches to

ET identification should enable a more precise and operational definition

TEAM DEVELOPMENTAL STAGES

In seeking to understand the stages through which ETs develop and grow,

this section of the chapter explores three key areas: (1) forming, (2)

func-tioning and (3) evolving Under the topic of ‘forming’, the chapter will

address issues such as coming into existence, initial structuring and initial

strategic choices Under ‘functioning’, the chapter will address issues such

as moving from composition to outcomes and external processes, while

‘evolving’ will address issues such as turnover, managerial transition and

other types of outcomes Collectively, these areas will enable the reader to

understand more thoroughly the stages through which a team develops

and how performance can be influenced by these occurrences

Forming

The literature identifies two main mechanisms of ET formation (Forbes

et al., 2006) The first pictures a strategic behaviour where entrepreneurs

undertake an extensive search for prospective team members that would

fulfil their resource needs Kamm and Nurick’s (1993) conceptual model

of team- venture formation exemplifies this approach The second

perspec-tive presents ET formation as a manifestation of interpersonal attraction

following the homophily mechanism (‘birds of a feather flock together’)

Friendship is, for example, seen as an important driver of ET formation

(Francis and Sandberg, 2000) Discua Cruz et al (2013) examine the

spe-cific case of family ETs based on seven Honduran case studies They find

that trust and shared values are important for membership Quantitative

studies, using structural event analysis, have demonstrated that the

pre-dominant characteristic of ETs is homophily (tendency of individuals to

associate and bond with similar others) For example, based on 745 ETs’

composition reports, Ruef (2002) concludes that homophily, with regard

to gender in particular, is the most consistent principle guiding team

formation Ruef et al (2003) confirm this result on a sample of 816 ETs

from the first Panel Study of Entrepreneurial Dynamics (PSED) and also

add the characteristic of ethnicity The strategic perspective presented as

‘normative’ is thus challenged (Forbes et al., 2006; Aldrich and Kim, 2007)

and its upholders attempt to explain the homophily of ETs by suggesting

that the entrepreneurs are behaving irrationally Parker (2009) argues

that heterophilous ETs tend to be more successful (in terms of venture

performance) but entrepreneurs build homophilous teams because they

are prone to certain cognitive biases, over- optimism and self- serving

attri-butions in particular He suggests that informed outsiders (e.g.,

practition-ers or hands- on investors) would improve ET formation compared to the

private choices that entrepreneurs make (ibid.) Based on a qualitative

longitudinal study of ET formation in an academic spin- off, Clarysse and

Moray (2004) conclude otherwise They suggest it to be more efficient to

‘coach’ the existing ET instead and have it develop the skills and capacities

to run the operations, which can be achieved in a relatively short period

The two approaches to ET formation are contrasted in the literature

Rather than discussing their relative merits in absolute terms, Aldrich

and Kim (2007) attempt to alleviate the tension by contextualizing these

approaches as ETs do not form in a vacuum Aldrich and Kim (2007)

dis-tinguish between small- world networks that are dense and emerge based

on homophily and proximity from scale- free networks that are clustered

in hubs and where new nodes prefer to attach to those already highly

con-nected nodes They argue that the instrumental approach to ET formation

fits best well- institutionalized sectors characterized by scale- free networks,

whereas the social psychological approach fits best small- world networks

According to Aldrich and Kim (2007), the typical ET would be a mundane

ET forming in a small- world, local and dense type of network, hence the

superiority of the social psychological approach in explaining the

phe-nomenon of ET formation

Wasserman (2012) argues that the decision to venture in a team duces further critical decisions about whom to attract, what role each

intro-team member should play, and how to split the equity among the intro-team

members These are three core dilemmas that he calls the ‘Three Rs –

Relationships, Roles, and Rewards’ The first was broached earlier in

the chapter and the two others are now addressed In the forming phase,

a team begins to structure itself but how does it define the initial norms,

roles, and interaction patterns? Zhao et al (2013) argue that deploying

the correct ET member to the correct task is essential and should be done

on the basis of capability The research of Sine et al (2006) on work roles

in ETs has a focus on role formalization and functional specialization

and they find that new ventures with higher ET formalization and

spe-cialization outperform those with more organic organizational structures

Zolin et al (2011) investigate role flexibility and find, in a sample of 921

German incubator- based firms, that strong ties (defined as previously

known people in their study) in the ET increase such flexibility However,

the effect of strong ties on role modifiability is statistically significant only

with novice entrepreneurs

One team role that has been deeply investigated is the leadership role, with Ensley et al.’s (2000) results first confirming the existence of lead

entrepreneurs in ETs They suggest that lead entrepreneurs are set apart

from other ET members by the strength of their strategic or

entrepreneur-ial vision (the ability to see what is not there) and their self- confidence

Foo et al (2006), from a sample of 51 ETs, highlight that the presence

of a distinct leader is positively related to team satisfaction Beyond the

existence of a leader, an entrepreneurial type of leadership (characteristics

of risk- taking, innovativeness and proactiveness) can also stimulate ET

members to be more creative (Chen, 2007) Furthermore, it is interesting

to note that it is not the resources that a leader brings to the table that are

critical, but rather it is the trust that his or her fellow teammates have in

the leader that enhances people’s commitment to cooperation (Wu et al.,

2009) It should also be noted that the initial trust and commitment

gener-ated are very beneficial to the subsequent growth stage of the enterprise

(Wang and Wu, 2012) In seeking to understand why this happened,

Darling et al (2006) identify certain personal skills that enable a lead

entrepreneur to bring together and develop that commitment within a

team and these skills included paradoxical thinking, controlled responding

and inclusive behaving

Another dilemma within team formation concerns the equity split

(Wasserman, 2012) Balkin and Swift (2006) remind us that at the creation

of a new venture, the situation is often that of cash scarcity, and therefore

equity and its relative distribution to the members of the ET is a critical

issue It represents more than potential future wealth since it is also about

control and symbols such as the value of the contribution of each team

member This is likely to be an emotionally charged decision for any

team and perception of fairness is essential (ibid.) This is confirmed by

Breugst et al.’s (2015, p 66) qualitative longitudinal study of eight ETs

that highlights that the ‘perceived justice of equity distribution emerged as

a key variable influencing ET interactions and important entrepreneurial

outcomes’ Team attraction (the belief that the team is a strong entity)

and team repulsion (a team drifting apart) are, respectively, positively and

negatively related to high perceived justice However, external threats can

make a team go from a positive spiral to a negative spiral despite high

per-ceived justice Therefore, the distribution of power is essential to

under-standing strategic decision- making and organizational performance In

a sample of 129 newly chartered US banks, DeVaughn and Leary (2010)

find that the incidence of organizational distress (defined as a specific

state or condition that is just short of failure) decreases with an increase

in the number of large blockholders on the ET (ownership superior to

5 per cent)

Determining the strategy for an enterprise is another critical element of

the ‘forming’ stage as an ET initiates the new venture and sets the

found-ing strategies that might lock the organization into a certain pattern (Zhao

et al., 2013) Fern et al (2012) suggest that differences between firms may

emerge due to the ETs’ heterogeneous knowledge stock and the

result-ant decision- making regarding strategic choices They find that a team

member’s past experience strongly constrains choices, and that diversity

of experience, at the level of the ET member and the ET, lessens these

constraints This supports Beckman’s (2006) argument that ET

composi-tion shapes new firm behaviours as an important antecedent of

exploita-tive and exploraexploita-tive behaviour and firm ambidexterity Exploitation is

more common for heterogeneous ETs in their members’ prior company

affiliations while exploration is more common for the more diverse teams

Gruber et al (2013) find in a sample of 496 technology ventures that ETs

with more diverse industry experience and more diverse external

knowl-edge sourcing relationships identify not only a larger number of market

opportunities but also more varied and distant ones Ding (2011)

empiri-cally tests the effect of ET members’ professional- education background

on early- stage organizational strategy in a sample of 512 young

biotech-nology firms She finds that firms with proportionally more entrepreneurs

with PhDs on the team have a higher probability of adopting open science

Furthermore, this link is stronger in a less favourable institutional

envi-ronment for open science Chaganti et al (2008) find that new ventures

with an ethnic- immigrant presence in the ETs show a stronger propensity

to seek and pursue entrepreneurial opportunities, and thus a more

aggres-sive prospector strategy than those without that presence This effect

is dependent on the team size (weaker when teams are larger) and the

average team members’ age (stronger for teams with younger members)

Henneke and Lüthje (2007) find that a heterogeneous composition in

terms of ET members’ educational background fosters strategic planning

openness, that is, the consideration of a wider range of strategic options

for the new venture However, they find weak support for the relationship

between the ET’s educational heterogeneity and environmental scanning

They attribute the weakness of this link to contextual effects specific

to fast- paced environments such as those they studied Saemundsson

and Candi (2014) research how environmental conditions influence new

technology- based firms to select an exploration strategy versus an

exploi-tation strategy in their innovation activities, arguing that due to resource

constraints they are unlikely to opt for both Based on 145 Danish firms,

they find that heterogeneous ETs (in their backgrounds) are more likely

to adapt their strategy to the environment whereas homogeneous ETs are

more likely to continue with their preferred strategy (unless the pressure

from the environment increases)

This section has examined the ‘forming’ stage of ETs The literature distinguishes two main routes to team formation, one strategic and the

other interpersonal This dichotomy is also present in the practitioners’

discourses In this book, Kim and Aldrich (Chapter 3) examine these two

main strategies for constructing ETs, contrasting academic and popular

advice The initial structuring of the ET is also part of the ‘forming’

stage Role formalization, specialization and flexibility are starting to be

addressed in the literature The leadership role is singled out and more

spe-cifically investigated Rewards are another team dilemma in this stage The

rare research on this topic points at the significance of perceived justice of

equity distribution Finally, the importance of the initial strategic choices

is examined from a path dependency perspective Research finds that ET

composition shapes these initial choices contingent on the environment

the new organization evolves in

Functioning

In order to perform effectively, an ET will draw on its resources and

interactions, which means that team composition and processes need to

be addressed Team composition is one of the earliest topics ETs

research-ers tackled by examining the impact of team divresearch-ersity on performance

Arguing that it did not have to start from scratch, research on ETs

ini-tially drew heavily from research on top management teams (Birley and

Stockley, 2000; Davidsson and Wiklund, 2001) Following upper echelons

theory (Hambrick and Mason, 1984), the question commonly investigated

has been: ‘Two competing views of team diversity: heterogeneity or

homo-geneity, which is better?’ (Horwitz and Horwitz, 2007) The argument

for the former is generally that it brings different expertise, experiences

and perspectives, and thus fosters creativity, innovation and problem

resolution This vision is countered by a social approach that argues that

diversity in aspects such as age, race and expertise has a negative impact

on team outcomes (ibid) Similarity between members of a team is

sup-posed to reduce dissonance (Festinger, 1957) and thus enhance cohesion

and work processes (and ultimately performance) but no clear answer has

been found to date According to Horwitz and Horwitz (2007), findings

are so conflicting that some authors contend there are no consistent main

effects of team diversity on organizational performance ET research

fol-lowed the same path and appears to have reached the same conclusions

Klotz et al (2014) argue that research has failed in identifying the

essen-tial ingredients for building effective ETs, while Zhou and Rosini (2015)

argue that the results are inconsistent and that the association between

team diversity and performance remains inconclusive As for classical

upper echelons theory studies, results are thus mitigated For example,

the impact of functional diversity or experience in entrepreneurship is not

clear (Hmieleski and Ensley, 2007; Parker, 2012) However, a recent

meta-analysis finds significant effects of ET characteristics on new ventures Jin

et al (2016) first examine aggregated team composition characteristics

such as collective industry experience, start-up experience, and work

expe-rience, and their effects on new venture performance are significantly

posi-tive This is consistent with earlier studies which found a positive effect of

individual human capital on entrepreneurial success (Unger et al., 2011)

Second, they examine heterogeneity in the ET in terms of gender, age, and

functional experience combined into a global heterogeneity measure and

conclude that heterogeneity is important for new ventures Third, they test

for the impact of ET size on new venture performance and find a positive

and significant effect Taken together, these results suggest that ET

com-position has overall an effect on new ventures but strong inconsistencies

remain when the studies are not bundled and, more specifically, when

dif-ferent diversity dimensions are examined separately (for example, Zhou

and Rosini, 2015)

This issue of the inconsistencies in team composition studies can be tackled from at least three angles Generally, ETs research seems to follow

Joshi et al.’s (2011) suggestions in their review on workplace demography

research that they break into three approaches: (1) reconceptualization

of diversity variables; (2) incorporation of mediating mechanisms; and

(3) greater emphasis on contextual moderators

Concerning conceptualization of diversity, there is first a discussion between surface- level and deep- level diversity The two main ideas in

upper echelons theory are (a) the close link between the top management

team’s composition and the firm’s outcomes, and (b) the possibility to

approximate cognitive diversity by demographic diversity (Hambrick,

2007) Schjoedt and Kraus (2009) argue that surface- level characteristics

are often used to assess ET heterogeneity whereas most of them do not

have an established link with performance, whereas heterogeneity in deep-

level characteristics possesses such a link, which suggests that the latter

needs to be examined Personality is one example of the inputs that have

not been examined deeply in the literature (Klotz et al., 2014) although

Schoss et al (Chapter 6) undertake such a review later in this book They

find that personality factors are significantly related to venture success

and that the relevant traits are much more effective when they are present

in different team members rather than in only one team member Khan

et al (2015) find diversity in need of achievement to have negative effects

on the outcomes in general but it can become positive if, at the same time,

the team’s mean need for achievement is low overall The same authors

focus on internal locus of control in another article and find that it

pro-motes team performance (effectiveness and efficiency) However, team

efficiency is increased when ETs possess at the same time a high internal

locus of control at team level and a low diversity on this well- established

entrepreneurial personality trait (Khan et al., 2014) Moreover, these two

papers contribute in showing that measurement is also important since the

mean level in a characteristic and the diversity on that same characteristic

can have different impacts Klotz and Neubaum (2016) call for

person-ality studies in an ET setting Focusing on the dark side of personperson-ality

traits, they suggest that some team members may possess positive traits

that offset the negative traits of others Also, they argue that

research-ers should move beyond simply examining the mean level of presearch-ersonality

traits in teams and examine how the minimum and maximum levels affect

functioning and performance and how the intra- group variance does too

Furthermore, similar to the fact that most studies up to now focus on

surface- level diversity, it is noticeable that most studies simply construe

diversity as variety Harrison and Klein (2007) argue that the construct

of diversity actually requires closer examination They propose that it can

be construed from three main perspectives: separation, variety or

dispar-ity Variety is the perspective that is usually adopted in ET research as it

is the basis of upper echelons theory It considers differences among team

members in terms of relevant knowledge or experience and is viewed as

positive (ibid.) On the other hand, separation predicts a negative outcome

to diversity Separation indicates that there are differences in position or

opinion among team members, primarily of value, belief or attitude (ibid.)

Finally, disparity (inequality) reflects possession that is the distribution of

how much of a socially valued commodity each unit member possesses

This second discussion about the conceptualization of diversity echoes

some studies in the literature concerning certain types of teams where

the variety perspective may not be perceived as the most relevant One

example is the case of academic spin- off ETs that the literature presents

as being possibly composed of two identity- based subgroups: academics

and practitioners With their different mindsets and cultures (Rasmussen,

2011), academics and practitioners on a same team can create a faultline

(i.e., a divide between these two subgroups that negatively impacts team

processes and consequently team outcomes) (Thatcher and Patel, 2012)

Visintin and Pittino (2014) argue that team integration can be promoted

by a number of ET attributes such as common background and past

membership in the same research team They find the latter to be true

in a sample of 103 university spin- offs based in Italy As for common

background, similar experience does positively moderate the relationship

between profile differentiation (i.e., the presence of academics and non-

academics on the team) and performance but not similarity in education

background (ibid.)

Joshi et al.’s (2011) second suggestion for team composition research

concerns ‘mediating mechanisms’ The latter might also be an

explana-tion for the lack of consistent results on the relaexplana-tionship between ET

composition and new venture performance As a limitation to their

meta-analysis on this relationship and as a future research opportunity, Jin et

al (2016) highlight the importance of exploring the possible mediating

effects Mediators are classically considered to be processes following the

input–process–output (IPO) framework The most conventional

media-tor variables that ET research examined are conflict and communication

(Schjoedt and Kraus, 2009) Ensley and colleagues (Ensley and Pearce,

2001; Ensley et al., 2002) find that cognitive conflict, task related, is

posi-tively linked to new venture performance and is propounded as a source

of creativity, innovation and avoidance of groupthink (Janis, 1982)

Affective (relational) conflict has, on the other hand, a negative impact

on performance They also find a positive link between these two types

of conflict (Jehn, 1997) that could be explained by the fact that attempts

to stimulate cognitive conflict can, in turn, augment the affective type of

conflict This relationship might contribute to explain Foo’s (2011) finding

that task conflict relates negatively to member- rated ET effectiveness in a

sample of 73 teams developing their business idea Foo et al (2006)

inves-tigate the effects of team inputs and processes on team members’

percep-tions of team viability and satisfaction in nascent ventures on a sample of

51 new venture teams They suggest that it is not as much the frequency

of communication that must be taken into account as its openness They

find that teams with problems communicate more (in order to resolve their

issues) An open communication is positively linked to their performance

measures and it enhances personal interactions Some studies attempt

to integrate different variables in a multidimensional model such as that

by Watson et al (1995), which comprises four dimensions: leadership,

interpersonal flexibility, team commitment and helpfulness They find a

positive relationship between this aggregate measure and perceived firm

performance in a sample of 191 ETs Similarly, Lechler (2001) emphasizes

the importance of going beyond the classical conflict and communication

variables to measure social interaction in its complexity as a whole He

suggests six components: communication, cohesion, work norms, mutual

support, coordination and conflict resolution Using a sample of 159 new

technology-based firms’ ETs, Lechler (2001) obtains conclusive results

linking his measure and venture success

Marks et al (2001) argue that certain mediating variables generally viewed as processes are not processes per se but rather emergent states

This notably led to the use of the input–mediator–output–input (IMOI)

framework where the ‘M’ encompasses the different processes as well as the

emergent states (Ilgen et al., 2005) The latter are ‘constructs that

charac-terize properties of the team that are typically dynamic in nature and vary

as a function of team context, inputs, processes and outcomes Emergent

states describe cognitive, motivational, and affective states of teams, as

opposed to the nature of their member interaction’ (Marks et al., 2001,

p 357) Shared leadership is a mediator of this type that has received some

attention Carland and Carland (2012) propose a model in which there are

two interacting aspects of shared leadership: shared entrepreneurial vision

and shared command and control While definitions of shared leadership

are numerous, generally it is described as a state where leading behaviour is

manifested by the team as a whole and not just a single individual (Ensley et

al., 2003) Ensley et al (2006) compare this concept to that of vertical

lead-ership and examine their relative influence on new venture performance

They are both found to be significant predictors but the shared leadership

variables account for a significant amount of variance in new venture

per-formance beyond the vertical leadership variables Hmieleski et al (2012)

further confirm the important effect of shared authentic leadership on

new venture performance based on a sample of 179 US new ventures In

Chapter 8 of this book, Zhou and Vredenburgh also find empirical support

that shared leadership improves ET performance and they find, moreover,

that personality composition is a dispositional antecedent of shared

leader-ship Zhou (2013) focuses on interaction and shows in a sample of 144 ETs

that task- related informational diversity benefits ET performance more

when leadership is shared among team members

Some authors attempt to introduce contingency to explain the

inconclu-sive results of the effects of team diversity They notably examine the fit

with the firm’s life- cycle stage, its degree of innovativeness or the venture’s

strategy and business environment Steffens et al (2012) find that higher

homogeneity in the ET is detrimental in the long term but did not find

a relationship between team homogeneity and short- term performance

Amason et al (2006) find that a negative relationship exists between team

heterogeneity and venture performance in highly innovative firms, but not

in the less innovative firms Ganotakis and Love (2012) find that the set

of ET human capital needed for entering export markets is different from

that required for succeeding in those markets Eesley et al (2014) find

that diverse ETs are likely to achieve high performance in a competitive

commercialization environment while technically focused teams present

a better fit with a cooperative commercialization environment and when

the enterprise pursues an innovation strategy In their meta-analysis of ET

composition and new venture performance, Jin et al (2016) distinguish

high-tech industries from low-tech industries and find that in the latter

‘aggregated team characteristics are significantly more beneficial to new

venture performance than heterogeneous ET characteristics’ (p 18) This

means that in low-tech industries, increasing ET diversity is less beneficial

than increasing human capital embedded in the team The environment is

thus an important contingency variable

The remainder of this section focuses on the external processes as,

beyond the internal processes they experience, ETs also interact with

their environment Witt (2004) examines the network success hypothesis

that assumes a positive relationship between the networking activities of

founders and their new ventures’ success His review of empirical studies

reveals a lack of significant results, which he notably explains as being

caused by a focus on the individual rather than the ET Also, there are

important stakeholders such as venture capitalists that have attracted

much research In both of these cases, external processes have often been

linked to internal ones Neergaard (2005) identifies, in a qualitative study,

six central networking activities and showed that not all ET members were

equally active networkers, with one member in particular often doing

most of it Arenius and Laitinen (2011) confirm the latter and further

argue that if the networking is shared then it diminishes the associated

stress and the team will be better able to detect its network reconfiguration

needs (following the changes in their resource needs) Vissa and Chacar

(2009) endeavour to show, in a sample of 84 Indian software team- based

ventures, how the use of external networks was contingent on ET internal

processes (strategic consensus and cohesion) and how they jointly shape

performance outcomes In Grandi and Grimaldi’s (2003) examination

of 40 Italian academic spin- offs, they find that the ETs’ intention to set

up relations with external actors and their frequency of interaction with

the latter was an antecedent of new venture success They notably

dem-onstrate that the networking intention is positively influenced by the

degree of articulation of the roles in the ET (a clear ‘division of labour’)

and negatively by the degree of completeness of the ET Brinckmann and

Hoegl (2011) examine how teamwork capability (quality of internal

col-laboration) and relational capability (collaboration with partners external

to the focal firm) of the ET affects the development of new firms Their

findings show that these internal and external processes will have

diverg-ing effects on the development of a new venture Teamwork capabilities

lead to a reduced likelihood of ET members being added and they do not

affect sales and employment growth, while relational capabilities lead to

ET member additions as well as sales and employment growth

The most commonly investigated external processes are venture talist related, with scholars focusing on two main processes: conflict and

capi-learning Higashide and Birley (2002) examine conflict between the ET

and the venture capitalist as perceived by the latter They find that

cogni-tive conflict related posicogni-tively to firm performance while affeccogni-tive conflict

associated negatively to firm performance These impacts are in general

stronger in any conflict related to organizational goals than to policy

deci-sions Zacharakis et al (2010) examine both the ET’s internal conflict and

external conflict with a venture capitalist They find that ETs do not view

cognitive conflict with the venture capitalist as favourable and that the

intra- team conflict increases the conflict between the ET and the venture

capitalist Berggren and Fili (2008) focus on business angels and how they

abstract from different cues that their relationship with the ET is

experi-encing problems From interviews with business angels, six different cues

have emerged that are ranked according to how detrimental they could

be to the relationship with the ET Busenitz et al (1997) consider that an

ET’s perception of whether its treatment by the venture capitalist is fair

will affect its receptivity to venture capitalist advice In a sample of 116

venture capitalist–funded firms, they mainly identified the indiscriminate

use of contractual covenants as an adverse trigger The background of the

ET also frames the perceived sense of fairness in the studied relationship

The number of years of ET industry experience and the average ET firm

tenure negatively frame perceptions of procedural justice On the other

hand, overall team tenure positively (and significantly) frames ET

percep-tions of fairness Barney et al (1996) consider that venture capitalist

learn-ing assistance can be of two types (business management and operational)

and argue that ETs would evaluate them differently depending on some

of their characteristics Their results indicate that ETs with more industry

experience and longer team tenure in the current venture are negatively

related to both business management advice and operational assistance

offered by their venture capitalists The ETs that tend to welcome

busi-ness management advice are those that had previously worked together

and whose primary experience was from another industry Busenitz et al

(2004) adds to these studies by adopting a learning perspective to consider

the venture capitalists’ value- added proposition and finds no statistically

significant support for strategic information, a negative association for

dismissals, and positive support for procedurally just interventions

In summary, team composition and processes are the most addressed

topics in ETs research In investigating the passage from composition to

outcomes, ET scholars draw heavily on upper echelons theory and do

not find consistent results Nevertheless, the composition characteristics

are still believed to be important for new venture performance Different

strategies are deployed in order to clarify this relationship Some scholars

started to look at dee level composition characteristics such as

per-sonality Others focused on the mediators and considered emergent states

rather than traditional processes Finally, a contingency approach has also

been taken with a better consideration of context The ‘functioning’ stage

also involves external processes The latter are more and more examined

together with internal processes and the most commonly investigated

external processes are those in relation to venture capitalists

Evolving

The evolution of the ET is studied from two perspectives: first that of the

turnover and second that of the managerial transition (or when the ET

becomes and/or is replaced by a top management team) What both of

these perspectives have in common is the acknowledgement of how initial

conditions appear to constrain them as well as other outcomes Bryant

(2014) argues that the adaptive capacity of entrepreneurial ventures is

often limited by the legacies of imprinted founding characteristics He

develops a model of the microfoundations of imprinting based on

collec-tive memory and shows how a venture’s long- term capacity to adapt might

be improved Based on an empirical research study, Beckman and Burton

(2008) find that the ET’s prior functional experiences and initial

organiza-tional funcorganiza-tional structures predict subsequent top manager backgrounds

and later functional structures Furthermore, following the IMOI

frame-work, certain outcomes have a cyclical causal feedback, which the extra ‘I’

represents These outcomes will be discussed later in the chapter

Ucbasaran et al (2003) emphasize the importance of human capital in new ventures and portray ET turnover as a way to manage this human

capital in order to adapt it to the project and its future development

They argue that it is important to distinguish team entries from team

exits as they are likely to have different antecedents Vanaelst et al (2006)

qualitatively examine the evolution of ten ETs and find that departures

are linked to intrapersonal conflict (e.g., the personal ambition of an

ET member cannot be conciliated with that of the venture) and/or

inter-personal conflict (cognitive and/or affective) New entries, on the other

hand, are all linked to supplementary resource needs Loane et al (2014)

examine motives of ET exits in 12 firms and find that the drivers of ET

exits are notably linked to conflicts regarding business strategies,

per-sonal circumstances or lifestyle changes The authors underline the fact

that not all exits signal conflict as one might deduce from the literature

and that the influence of outside equity may similarly force departures

from an ET

In their analysis of ETs turnover, Ucbasaran et al (2003) also consider the value of human capital, both in terms of quantity and quality The

former is operationalized by the ET’s size and average age, and the latter

by the degree of functional diversity Globally, they consider that an ET

poor in terms of human capital will be associated with new entries whereas

a heterogeneous team (in which member coordination and integration

costs are higher) will be associated with team exits They test these

hypoth-eses in a sample of 92 firms surveyed at three points in time over more

than a ten- year span They find that team size is negatively linked to team

entries and find no significant relationship for team exits Chandler et al.’s

(2005) results on emerging ventures (six to 24 months old) corroborate

Ucbasaran et al.’s (2003) perception of turnover in ETs as an adaptation

mechanism but also mitigate against their results For example, Chandler