Firm Emergence and Strategy: The Impact of Institutional Background

Abstract

This dissertation extends our understanding of the relationship between entrepreneurial teams and entrepreneurial outcomes. Using a sample of 260 nascent family ventures, I look at the impact of entrepreneurial team composition on important entrepreneurial milestones. I examine two specific measures of entrepreneurial outcomes: the chances of entrepreneurial groups establishing new family firms and their propensity to engage in exploration and exploitation. Drawing from the institutional logics perspective and building on the entrepreneurial team literature, I introduce the concept of institutional background- a team demographic characteristic- as an important dimension of team composition. I argue that institutional background provides richer measures of mechanisms and processes that affect founding team cognition, values, perceptions and, consequently, entrepreneurial outcomes. I explore my arguments using two studies. In the first study, I focus on entrepreneurial groups attempting to launch new family-owned manufacturing firms. I investigate how their institutional backgrounds impact their chances of getting their organizations started. By focusing on the not-yet fully established organization, my findings provide a fresh perspective to our understanding of the emergence of family firms. In the second study, I explore how the logic imprinted at founding continues to shape organizational practices—the propensity to engage in exploration and exploitation. The second study challenges and extends current work on exploration, exploitation, and organizational ambidexterity by showing that founders’ institutional backgrounds constrain strategic choices. By connecting decisions on explorative and exploitative behaviour to founders’ institutional background, this study provides an alternative to managerial ‘discretion’ and ‘ability’ to manage exploration and exploitation. Overall, this dissertation takes another step toward opening the black box of how entrepreneurial teams impact entrepreneurial outcomes.