We assess the role of human capital in the growth and development of new technology–based ventures, based on longitudinal data from 198 high–tech ventures. Our empirical results imply that there is a strong relationship between team experience and strategy. Although there is a weak direct link between team experience and venture performance, the findings strongly suggest that the fit between strategy and team experience is a key determinant of the long–term performance of high–tech entrepreneurial ventures. For small, technology–based new ventures, the team's technological experience appears to be the most important determinant of the success of a differentiation strategy.
Get full access to this article
View all access options for this article.
References
1.
AmasonA.C., ShraderR.C., & TompsonG.H. (2006). Newness and novelty: Relating top management team characteristics to new venture performance. Journal of Business Venturing, 21(1), 125–148.
2.
BantelK.A. & JacksonS.E. (1989). Top management and innovation in banking: Does the top team make a difference?Strategic Management Journal, 10, 107–124.
3.
BartelA.P. & LichtenbergF.R. (1987). The comparative advantage of educated workers in implementing new technology. Review of Economics and Statistics, 69, 1–11.
4.
BartelA.P. & LichtenbergF.R. (1990). The impact of age of technology on employee wages. Economics of Innovation and New Technology, 1, 1–17.
5.
BeattyR.P. & ZajacE.J. (1994). Managerial incentives, monitoring, and risk bearing: A study of executive compensation, ownership, and board structure in initial public offerings. Administrative Science Quarterly, 39, 313–335.
6.
BeckerG.S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education. Chicago: University of Chicago Press.
7.
BirleyS. & NorburnD. (1987). Owners and managers: The Venture 100 versus the Fortune 500. Journal of Business Venturing, 2(4), 351–363.
8.
ChowdhuryS. (2005). Demographic diversity for building and effective entrepreneurial team: Is it important?Journal of Business Venturing, 20(6), 727–746.
9.
ClarysseB. & MorayN. (2004). A process study of entrepreneurial team formation: The case of research–based spin–off. Journal of Business Venturing, 19(1), 55–79.
10.
CohenJ. & CohenP. (1983). Applied multiple regression for the behavioral sciences (2nd ed.). Hillsdale, NJ: Lawrence Erlbaum.
11.
CooperA.C. (1981). Strategic management: New ventures and small businesses. Long Range Planning, 14(5), 39–45.
12.
DailyC.M., McDougallP.P., CovinJ.G., & DaltonD.R. (2002). Governance and strategic leadership in entrepreneurial firms. Journal of Management, 28(3), 387–412.
13.
DavidssonP. & HonigB. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331.
14.
EnsleyM.D. & AmasonA.C. (1999). Entrepreneurial team heterogeneity and the moderating effects of environment volatility and team tenure on new venture performance. In DavidssonP., GartnerW.B., MasonC.M., & McDougallP.P. (Eds.), Frontiers of entrepreneurship research (pp. 505–517). Babson Park, MA: Babson College.
15.
EnsleyM.D., CarlandJ.W., & CarlandJ.A. (1998). The effect of entrepreneurial team skill heterogeneity and functional diversity of new venture performance. Journal of Business and Entrepreneurship, 10(1), 1–14.
16.
EnsleyM.D., PearsonA., & AmasonA. (2002). Understanding the dynamics of new venture teams: Cohesion, conflict, and new venture performance. Journal of Business Venturing, 17(4), 365–386.
FilatotchevI. & BishopK. (2002). Board composition, share ownership, and “underpricing” of U.K. IPO firms. Strategic Management Journal, 23(10), 941–955.
19.
FinkelsteinS. & HambrickD.C. (1990). Top management team tenure and organizational outcomes: Moderating role of managerial discretion. Administrative Science Quarterly, 35, 484–503.
20.
FinkelsteinS. & HambrickD.C. (1996). Strategic leadership: Top executives and their effects on organizations. Minneapolis, MN: West.
21.
GartnerW.B. (1988). Who is an entrepreneur? is the wrong question. American Journal of Small Business, 12(4), 11–32.
22.
GuptaA.K. (1984). Contingency linkages between strategy and general managerial characteristics: A conceptual examination. Academy of Management Review, 9(3), 399–412.
23.
GuptaA.K. (1988). Contingency perspectives on strategic leadership: Current knowledge and future research directions. In HambrickD.C. (Ed.), The executive effect: Concepts and methods for studying top managers (pp. 1147–1178). Greenwich, CT: JAI Press.
HambrickD.C. (1994). Top management groups: A conceptual integration and reconsideration of the “team” label. In CumminsL.L. & StawB. (Eds.), Research in organizational behavior (Vol. 16, pp. 171–213). Greeenwich, CT: JAI Press.
26.
HambrickD.C., ChoT.S., & ChenM. (1996). The influence of top management team heterogeneity on firms’ competitive moves. Administrative Science Quarterly, 41, 659–684.
27.
HambrickD.C. & MasonP.A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9, 193–206.
28.
HannanM.T. & FreemanJ. (1977). The population ecology of organizations. American Journal of Sociology, 82(5), 929–964.
JaccardJ., TurrisiR., & WanC.K. (1990). Interaction effects in multiple regression. Newbury Park, CA: Sage Publications.
31.
KammJ.B. & NurickA.J. (1993). The stages of team venture formation: A decision–making model. Entrepreneurship Theory and Practice, 17(2), 17–27.
32.
KobrinS.J. (1991). An empirical analysis of the determinants of global integration. Strategic Management Journal, 12, 17–31.
33.
KunkelS. (1991). The impact of strategy and industry structure on new venture performance. Unpublished doctoral dissertation, University of Georgia.
34.
LambkinM. (1988). Order of entry and performance in new markets. Strategic Management Journal, 9(special issue–summer), 127–140.
35.
LinkA.N. & SiegelD.S. (2007). Innovation, entrepreneurship, and technological change. Oxford: Oxford University Press.
36.
LitschertT. & RamaswamiK. (1991). The performance impact of strategy manager coalignment. An empirical examination. Strategic Management Journal, 12, 509–522.
37.
MarinoK.E., CastaldiR.M., & DollingerM.J. (1989). Content analysis in entrepreneurship research: The case of public offerings. Entrepreneurship Theory and Practice, 13, 51–66.
38.
McDougallP.P. (1987). An analysis of strategy, entry barriers, and origin as factors explaining new venture performance. Unpublished doctoral dissertation: University of South Carolina.
39.
McGeeJ.E. & DowlingM.J. (1994). Using R&D cooperative arrangements to leverage managerial experience: A study of technology–intensive new ventures. Journal of Business Venturing, 9, 33–48.
40.
NorburnD. & BirleyS. (1988). The top management team and corporate performance. Strategic Management Journal, 9, 225–237.
41.
PalmerM. (1971). The application of psychological testing to entrepreneurial potential. California Management Review, 13(3), 38–50.
42.
PedhazurE.J. (1982). Multiple regression in behavioral science research. New York: Hold, Rinehart & Winston.
PorterM.E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.
45.
PorterM.E. (1985). Competitive advantage: Creating and the free press. New York: Sustaining Superior Performance.
46.
RobinsonK.C. (1995). Measures of entrepreneurial value creation. Unpublished doctoral dissertation, University of Georgia.
47.
RobinsonK.C. & McDougallP.P. (1998). The impact of alternative operationalizations of industry structural elements of measures of performance for entrepreneurial manufacturing ventures. Strategic Management Journal, 19(11), 1079–1100.
48.
RobinsonK.C. & McDougallP.P. (2001). Entry barriers and new venture performance: A comparison of universal and contingency approaches. Strategic Management Journal, 22(6–7), 659–685.
49.
RosenS. (1987). Human capital. The New Palgrave: A Dictionary of Economics, 2, 681–690.
50.
RumeltR.P. (1974). Strategy, structure and economic performance. Boston: Harvard Business School Press.
51.
SandbergW. & HoferC. (1987). Improving new venture performance: The role of strategy, industry structure and the entrepreneur. Journal of Business Venturing, 2(1), 5–28.
52.
SharfmanM.P. & DeanJ.W.Jr. (1991). Conceptualizing and measuring the organizational environment: A multidimensional approach. Journal of Management, 17(4), 681–700.
53.
ShraderR.C. (1996). Influences on and performance implications of internationalization by publicly owned U.S. new ventures: A risk taking perspective. Unpublished doctoral dissertation, Georgia State University.
54.
ShraderR.C. (2001). Collaboration and performance in foreign markets: The case of young, high–technology manufacturing firms. Academy of Management Journal, 44(1), 45–60.
55.
ShraderR.C., OviattB.M., & McDougallP.P. (2000). How new ventures exploited trade–offs among international risk factors: Lessons for the accelerated internationalization of the 21st century. Academy of Management Journal, 43(6), 1227–1247.
56.
SiegelD.S. (1999). Skill–biased technological change: Evidence from a firm–level survey. Kalamazoo, MI: W.E. Upjohn Institute Press.
57.
SiegelD.S., WaldmanD.A., & YoungdahlW.E. (1997). The adoption of advanced manufacturing technologies: Human resource management implications. IEEE Transactions on Engineering Management, 44, 288–298.
58.
SzilagyiA.D. & SchweigerD.M. (1984). Matching managers to strategies: A review and suggested framework. Academy of Management Review, 9, 626–637.
59.
UcbasaranD., LockettA., WrightM., & WestheadP. (2003). Entrepreneurial founder teams: Factors associated with member entry and exit. Entrepreneurship Theory and Practice, 28(2), 107–127.
60.
VanaelstI., ClarysseB., WrightM., LockettA., MorayN., & S'JegersR. (2006). Entrepreneurial team development in academic spinouts: An examination of team heterogeneity. Entrepreneurship Theory and Practice, 30(2), 249–271.
