Academic journal article Entrepreneurship: Theory and Practice

Differences in Management Practices of Founding and Nonfounding Chief Executives of Human Service Organizations

Academic journal article Entrepreneurship: Theory and Practice

Differences in Management Practices of Founding and Nonfounding Chief Executives of Human Service Organizations

Article excerpt

As noted by Hofer and Charan (1984), work on behavioral aspects of entrepreneurship has been channeled into two related but separate areas of theory and research. One line of investigation has examined the personal characteristics of entrepreneurs--frequently operationalized, as we do in this paper, as persons who founded a new organization (e.g., Begley & Boyd, 1987; Cooper & Dunkelberg, 1987; Reynolds, 1988; Schere, 1982). Studies have compared various groups (e.g., entrepreneurs and nonentrepreneurs, minority and nonminority entrepreneurs, and successful and unsuccessful entrepreneurs) on characteristics such as risk-taking propensity, locus of control, and achievement orientation (see reviews by Brockhaus & Horwitz, 1986; Wortman, 1986). In general, these studies have produced weak and inconsistent results (Brockhaus & Horwitz, 1986; Herron, Robinson, & McDougall, 1988).

Van de Ven (1980) admonished investigators to heed the lessons learned from leadership research, suggesting that the examination of entrepreneurial behaviors, rather than traits, may provide more consistent findings. Gartner (1988, 1989) was more blunt: he stated that "Who is an entrepreneur?" is simply the wrong question to be asking. He argued that just as we would learn more about playing baseball by studying the behaviors rather than the personality traits of baseball players, entrepreneurship--the creation of new organizations--could be better understood by examining the behaviors of the entrepreneurs who found organizations.

The second line of inquiry identified by Hofer and Charan--the literature pertaining to the life cycles or stages of organizations--indeed has focused on the behaviors of entrepreneurs. Although theorists have proposed diverse models to describe the nature of the developmental stages through which organizations advance (e.g., Greiner, 1972; Kimberly, 1979; Mintzberg, 1984; Quinn & Cameron, 1983), the models are fairly similar in their discussions of the initial period in which the organization is founded and starts to develop. The power and management practices of the entrepreneur are particularly prominent in discussions of the organization in this stage. Unfortunately, little research has been conducted to test the life cycle theories (Kazanjian, 1988), and what evidence there is has tended to be qualitative case studies (e.g., Greiner, 1972; Tashakori, 1980).

The present study was designed to complement the earlier case studies by providing a quantitative, larger sample test of several propositions drawn from the life cycle literature. In doing so, we compared the management practices of founding and nonfounding executive directors (chief executives) of small- to medium-sized nonprofit human service organizations. These directors have roles fairly comparable to those of top executives of similarly sized for-profit enterprises. They are responsible for overseeing day-to-day operations in the organizations they run, and may be involved in decision making in areas as diverse as finance, strategy, personnel management, and service delivery.

A common theme in the life cycle literature is the strong desire of founders to personally oversee, coordinate, and control the activities of their organizations (Gray & Ariss, 1985; Lippitt & Schmidt, 1967; Mintzberg, 1984; Schein, 1983; Scott, 1971; Tashakori, 1980). We expected that the founder's tendency to control might manifest itself in several ways in the organizations we studied. First, we hypothesized that founders would have larger spans of control than executive directors who were not founders of their organizations. That is, it should be easier to monitor the activities of individuals if you have them report directly to you.

Drawing from the arguments of several writers (Mace, 1971; Schein, 1983; Tashakori, 1980), we also expected that founders would be more likely than nonfounders to build boards of directors that are under their control. …

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