scholarly journals Understanding New Venture Failure due to Entrepreneur-Organization Goal Dissonance

2007 ◽  
Vol 32 (1) ◽  
pp. 55-74 ◽  
Author(s):  
D V R Seshadri
Keyword(s):  
Top Management Team ◽  
Chief Executive ◽  
Psychological Ownership ◽  
New Venture ◽  
Top Management ◽  
Goal Congruence ◽  
Start Up ◽  
Low Degree ◽  
High Degree

New ventures tend to have an alarmingly high casualty rate. Those who take the most severe brunt in such failures are key managers, who unwittingly take on roles much beyond their formal job descriptions, in an effort to keep the venture alive, often ending up as ‘employee entrepreneurs.’ Employees taking ownership of their jobs far in excess of that specified by their formal roles, thereby manifesting entrepreneurial behaviour, are also referred to as intrapreneurs. This paper presents the real life case study (with names, identities, and situations disguised) of the chief executive of a start-up venture who tried to repeatedly salvage the start-up company from one crisis after another, over a span of seven years, when two successive promoters failed to deliver their part of the commitment through timely infusion of the required promoter�s equity. In addition, he also had to reckon with facing undue pressure from the promoters to cater to their short-term goals. Based on the case study of Global Optical Disc Company Ld., the author presents a model to better understand new venture failure arising out of goal dissonance between the promoter and the organization and proposes the following hypotheses: A low degree of psychological ownership by the professional top management and a low goal congruence of the promoter and the new venture can be lethal for a new venture. A high degree of psychological ownership by the professional top management and a high goal congruence of the promoter and the new venture could result in a likely success, provided the industry structure, strategy, financial structuring, etc., do not result in the creation of conditions to cause failure. The situation of a low degree of psychological ownership by the professional top management team and a high goal congruence of the promoter and the new venture may result in a weak beginning for the new venture despite heroic efforts of the professional top management team. A high degree of psychological ownership by the professional top management and a low degree of goal congruence of the promoter and the new venture would most likely result in an eventual failure of the new venture. The transition from an employee mindset on the part of the intrapreneurial chief executive in a new venture to that of an entrepreneurial mindset in the situation of distress in the new venture, due to failure on the part of the promoter, is not automatic. The paper concludes with lessons for those managers who may be put into similar �testing by the fire� situations. While there could be any number of reasons for the failure of entrepreneurial start-ups, this paper focuses in particular on the failure attributable to dissonance between promoter�s personal goals and the start-up organization�s stated goals. Such lack of goal convergence is a phenomenon that occurs with alarmingly regular frequency. The paper describes some of the options that an employee-chief executive has under such adverse circumstances.

scholarly journals Uticaj nacionalne kulture na organizacionu strukturu preduzeca u Srbiji

2003 ◽  
Vol 44 (156) ◽  
pp. 45-66 ◽  
Author(s):  
Nebojsa Janicijevic
Keyword(s):  
Organizational Structure ◽  
National Culture ◽  
Holistic Approach ◽  
Organizational Restructuring ◽  
Complete Understanding ◽  
Main Hypothesis ◽  
Low Degree ◽  
High Degree ◽  
Female Values

The paper aims to point out the limitations of the partial and the need for a holistic approach to researching the influences of national culture on the management. Using the case study of organizational restructuring of Serbian enterprises, the paper shows how the complete understanding of the influences of national culture on management will be possible only if all dimensions of the national culture are simultaneously included in the analysis. The main hypothesis of the paper is that the low degree of formalization of Serbian companies' organizational structure, even with a high degree of uncertainty avoidance in Serbian national culture, results from the forces of collectivism and "female" values in this culture.

scholarly journals The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

2018 ◽  
Vol 64 (4) ◽  
pp. 810-854 ◽  
Author(s):  
Susan L. Cohen ◽  
Christopher B. Bingham ◽  
Benjamin L. Hallen
Keyword(s):  
Bounded Rationality ◽  
New Ventures ◽  
Multiple Case Study ◽  
New Venture ◽  
External Information ◽  
Start Up ◽  
Multiple Case ◽  
Established Firms

Using a nested multiple-case study of participating ventures, directors, and mentors of eight of the original U.S. accelerators, we explore how accelerators’ program designs influence new ventures’ ability to access, interpret, and process the external information needed to survive and grow. Through our inductive process, we illuminate the bounded-rationality challenges that may plague all ventures and entrepreneurs—not just those in accelerators—and identify the particular organizational designs that accelerators use to help address these challenges, which left unabated can result in suboptimal performance or even venture failure. Our analysis revealed three key design choices made by accelerators—(1) whether to space out or concentrate consultations with mentors and customers, (2) whether to foster privacy or transparency between peer ventures participating in the same program, and (3) whether to tailor or standardize the program for each venture—and suggests a particular set of choices is associated with improved venture development. Collectively, our findings provide evidence that bounded rationality challenges new ventures differently than it does established firms. We find that entrepreneurs appear to systematically satisfice prematurely across many decisions and thus broadly benefit from increasing the amount of external information searched, often by reigniting search for problems that they already view as solved. Our study also contributes to research on organizational sponsors by revealing practices that help or hinder new venture development and to emerging research on the lean start-up methodology by suggesting that startups benefit from engaging in deep consultative learning prior to experimentation.

Top management team time horizon blending and organizational ambidexterity

2019 ◽  
pp. 147612701988366 ◽  
Author(s):  
Jianhong Chen ◽  
Danny Miller ◽  
Ming-Jer Chen
Keyword(s):  
Chief Executive Officer ◽  
Time Horizon ◽  
Top Management Team ◽  
Chief Executive ◽  
Management Team ◽  
Top Management ◽  
Organizational Ambidexterity ◽  
Joint Effects ◽  
Upper Echelons Theory ◽  
Time Horizons

We focus on the strategic implications of executive time horizons on a top management team. We argue that time horizon mean and diversity individually and interactively influence organizational ambidexterity, that is, a firm’s joint exploitation of current competencies and exploration of new opportunities. Drawing on the chief executive officer and top management team interface literature, we propose that effective CEO temporal leadership will enhance the joint effects of top management team time horizon mean and diversity on organizational ambidexterity. We tested our hypotheses by conducting multiple runs of surveys on a sample of 146 Chinese small- and medium-sized firms. Our study contributes to upper echelons theory and temporal research on strategy, being the first to examine the strategic consequences of top management team time horizon composition.

scholarly journals Teeling Whiskey Company: A Tradition of Family Entrepreneurship and Whiskey Distilling

2015 ◽  
Vol 16 (3) ◽  
pp. 217-225 ◽  
Author(s):  
Colm O'Gorman ◽  
Martina Brophy ◽  
Eric Clinton
Keyword(s):  
High Growth ◽  
New Venture ◽  
Professional Experience ◽  
Fast Growing ◽  
High Profile ◽  
Start Up ◽  
Family Based ◽  
Traditional Industry ◽  
Family Entrepreneurship

This case study explores the origins of a new high-growth family start-up competing in a traditional industry. Teeling Whiskey Company Ltd (TWC) is the brainchild of entrepreneur Jack Teeling. This new venture stems from another high-profile, family-based business named Cooley Distillery. Jack was Managing Director of Cooley Distillery, the business his father founded in 1987. At Cooley Distillery, he acquired a wealth of professional experience in whiskey distilling and selling. When the distillery was sold to a large US spirits company in 2012, Jack pursued his own entrepreneurial venture in Irish whiskey. A year after the business was founded, Jack was joined by his brother Stephen Teeling, and together they have shaped their idea for a boutique, premium whiskey distiller producing innovative offerings into a fast growing, internationalized business. Jack and Stephen need to build a niche for TWC, as many new distilleries are due to enter the market.

Everyone must help: performance implications of CEO and top management team human capital and corporate political activity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christopher M. Harris ◽  
Lee Warren Brown
Keyword(s):  
Human Capital ◽  
National Collegiate Athletic Association ◽  
Top Management Team ◽  
Chief Executive ◽  
Management Team ◽  
Political Activity ◽  
Top Management ◽  
Corporate Political Activity ◽  
Content Type ◽  
Outcome Differences

PurposeWhile research has shown that multiple actors, both internal and external to the organization, influence performance, oftentimes, these actors are studied in isolation. This paper aims to examine the performance implications of both top management team (TMT) and chief executive officer (CEO) human capital. In addition, the authors consider external actors' influence on performance by examining corporate political activity (CPA).Design/methodology/approachThe authors use a sample of National Collegiate Athletic Association (NCAA) football teams, examining human capital data on the head coaches and the assistant coaches, combined with the schools' participation in NCAA football committees.FindingsThe study findings indicate that organizations engage in various market and nonmarket strategies in concert, and that different strategies result in performance outcome differences. Specifically, we examine how the use of CEO and TMT human capital and CPA interact and influence performance.Practical implicationsThe authors examine the moderating effects of political activity on the human capital–performance relationship for both top leaders and TMTs. Organizations benefit from investing in the human capital of their leaders internally and CPA externally.Originality/valueWhile organizations engage in market and nonmarket actions in concert, management research has generally studied these concepts in isolation. This paper suggests that both market and nonmarket activities can influence performance.

Zandinger!

2003 ◽  
Vol 28 (2) ◽  
pp. 193-204 ◽  
Author(s):  
George H. (Jody) Tompson
Keyword(s):  
Life Cycle ◽  
Industry Structure ◽  
New Venture ◽  
Board Game ◽  
Ground Zero ◽  
Target Marketing ◽  
Start Up ◽  
Successful Business ◽  
Toy Industry

Most cases in entrepreneurship address strategic or operating difficulties of recently formed organizations. The case study presented here addresses an organization in its earliest stage of the life cycle: pre start–up. The case is about an entrepreneur who is planning to create a new venture based on a board game invented by his uncle. Accordingly, the case requires students to prioritize the tasks to create a venture from ground zero. The entrepreneur in this case already owns another successful business, has good marketing skills, and has received accolades from an expert in the toy industry. He seems to have a potentially successful product but is uncertain about what to do next. The case presents information for assessing industry structure and competitiveness, manufacturing options, and target marketing.

Organizational Volatility and Rates of Leader Succession

1978 ◽  
Vol 4 (1) ◽  
pp. 25-41 ◽  
Author(s):  
Donald L. Helmich
Keyword(s):  
Size Variation ◽  
Chief Executive ◽  
Equity Structure ◽  
Contextual Variation ◽  
Moderator Effects ◽  
Corporate Growth ◽  
Low Degree ◽  
Presidential Succession ◽  
Economic Trends ◽  
High Degree

The study tests the contention that variations in the focal organization's context, reflecting strategies of coopting, competing, capitalizing, and corpulating, constrain the periodicity of succession in the office of chief executive within the setting of 58 petrochemical companies. Contextual variation is identified through a coefficient of volatility which accounts for economic trends in corporate growth (or decline) through least squares deviations. Results suggest that high presidential succession rates are influenced by both a low degree of variation over time in board membership and a high degree of variation in debt to equity structure. The relationship between board size variation and succession rate is somewhat unexpected, and it is even more predominant when surveyed companies are classified according to the degree of successfulness (profitability and return on investment). Further analysis reveals a prediction model for successor tenure based on volatility variables and moderator effects.

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