Academic journal article Journal of Management and Organization

Entrepreneurial and Management Teams: What Makes the Difference?

Academic journal article Journal of Management and Organization

Entrepreneurial and Management Teams: What Makes the Difference?

Article excerpt

ABSTRACT

The importance of teams has been largely recognized in recent management and entrepreneurship research. This article critically reviews the literature of entrepreneurial and management teams by comparing the key concepts, and the development and foci of research from the SME performance viewpoint in particular. The comparison reveals that entrepreneurial teams differ from management teams, and so the concepts should not be considered interchangeable. Such teams also operate largely in different contexts, however, both having different roles for management and a significant impact on firm performance. Moreover, the review suggests that entrepreneurial and management teams are often groups rather than teams and they are more common than previously believed, though there is much variation in their prevalence by industry sector and firm size.

Keywords: teams; entrepreneurial teams; management teams; performance; small and medium enterprises

This article focuses on management teams and entrepreneurial teams. The importance of teams has been widely recognized in recent management and entrepreneurship research. This interdisciplinary phenomenon reflects a growing trend of multiple individuals being involved in the management of the firm. It is more common today that instead of a single manager there may be a group of managers who take care of the important issues concerning the whole organisation (Nadler 1997; Murray 1989). The literature on entrepreneurial teams and management teams suggests that they can play a significant role for firm performance. In fact, teams have continuously been related to organizational effectiveness and high performance. For example, a number of studies have shown that firms founded and managed by teams are on average more successful than those founded and managed by single persons (Lechler, 2001; Rosa & Scott, 1999; Vyakarnam et al., 1999). A great deal of organisational theory and literature, as well as practice, supports the significance of management teams and entrepreneurial teams and perceives them to be crucial in firms. To perform well in tighter competition, greater efficiency is required. As it is impossible to deal with all the rapidly increasing amounts of data and the complexity of the global economy, managers are forced to become more flexible in their ways of dealing with the management (Pasanen 2003; Nadler 1997; Murray 1989).

Entrepreneurial teams and management teams in SMEs are more common than has been believed (van Gils, 2005; Lau, 2000; Lechler, 2001; Vyakarnam et al., 1997; Watson et al., 1995). On the basis of the few available empirical studies of their prevalence, about two thirds of SMEs have a management team or an entrepreneurial team (Cooper et al., 1990; Pleschak & Werner, 1998; Pasanen, 2003). It has been claimed that management team issues make up a major research stream in small business literature in the US because of its critical impact on firm performance (Lohrke et al., 1999). Moreover, entrepreneurial teams are the dominating form of startups in certain fields (Cooper et al., 1990). However, there is much variation in their prevalence as between industry sectors.

The literature reveals that there is a wide variety of closely-related and at least partly overlapping concepts of entrepreneurial and management teams, indicating the conceptual confusion in the field. Several terms are used for teams of owners, entrepreneurs and firm managers; e.g., entrepreneurial teams, entrepreneurial founder teams, entrepreneurial founding teams, venture teams, strategic teams, management teams, top management teams, top management groups, executive teams, executive groups, managerial teams, senior executive teams, and senior executive groups. Moreover, each term seems to have several definitions, making comparison of previous studies difficult. In several research articles the concepts of entrepreneurial team and management team are also used as synonyms (e. …

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