Academic journal article Entrepreneurship: Theory and Practice

New Venture and Family Business Teams: Understanding Team Formation, Composition, Behaviors, and Performance

Academic journal article Entrepreneurship: Theory and Practice

New Venture and Family Business Teams: Understanding Team Formation, Composition, Behaviors, and Performance

Article excerpt

New ventures are frequently started by entrepreneurial teams rather than lone entrepreneurs. Often, team members have family ties. Yet, there has been relatively little research on new venture and family business teams. The papers in this special issue address this gap by studying team formation and composition, faultlines among team members, generational involvement in teams, the influence of shared organizational experience and functional homogeneity, and the likelihood of couples, biologically related, and unrelated teams achieving first sales. Combined, they suggest that relationships are more important than skill diversity in determining the effectiveness of both family business and new venture teams.

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Although there is a well-developed management literature on organization behavior and human resources, these topics have not received comparable attention in the entrepreneurship literature (Katz, Aldrich, Welbourne, & Williams, 2000; Tansky & Heneman, 2003). Research suggests that entrepreneurs behave differently than managers in large, established firms (Schjoedt & Shaver, 2007), and employees and managers in entrepreneurial organizations exhibit different behavioral dynamics as well (Monsen & Boss, 2009). Importantly, behavioral theories meant to apply to established organizations do not always transfer well to entrepreneurial firms (cf. Bygrave, 1993; Dess, Lumpkin, & McGee, 1999; Dew, Read, Sarasvathy, & Wiltbank, 2008; Sharma & Chrisman, 1999; Zahra, 2007). However, research is only starting to come to grips with the types and extent

of these potential differences (Moroz & Hindle, 2012; Morris, Kuratko, Schindehutte, & Spivack, 2012). The same is true for family businesses, where the agency costs from adverse selection and moral hazard suggest there is a need for studies that contribute to a better understanding of the composition and compensation of management teams, their behavioral dynamics, and the performance consequences of different approaches (e.g., Barnett & Kellermanns, 2006; Chua, Chrisman, & Bergiel, 2009).

In the process of preparing this special issue of Entrepreneurship Theory and Practice, one theme emerged as common among the five selected articles: the fundamental importance of teams. This is not surprising, as entrepreneurial teams start most new ventures (Gartner, Shaver, Gatewood, & Katz, 1994; Kamm, Shuman, Seeger, & Nurick, 1990; West, 2007). Nonetheless, relative to their importance, there are still considerable gaps in our knowledge about the dynamics of new venture and family business teams. How new venture and family business teams are formed, the basis for the decisions on who should be involved, the nature of the interactions of team members, what the implications are for ventures with one type of team rather than another, and other questions regarding the behavior and performance of venture teams have only begun to be investigated in the past decade (see, for example, Ucbasaran, Lockett, Wright, & Westhead, 2003). Furthermore, much more work has been done on teams composed of unrelated individuals than teams composed of family members even though the evidence suggests that the latter rather than the former are more common (e.g., Chua, Chrisman, & Chang, 2004; Ruef, Aldrich, & Carter, 2003). The prevalence of family-based management teams may suggest that the family form of organization possesses critical advantages in terms of access to resources, resilience to obstacles of both an economic and psychological nature, or simply that human beings prefer to engage in entrepreneurship with people that they know, trust, and love more than with people they know less well, regardless of the skills and abilities the two groups bring to the table. Unfortunately, not enough work has been done to draw definitive conclusions regarding how these new venture teams form, function, grow, and evolve over time. …

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