Organizational Routines Development and New Venture Performance

Alessandro Marino

Abstract


To better understand how entrepreneurial ventures vary as they evolve, we introduce and develop the concept of an organizational routine in a prototypical state, a protoroutine. Protoroutines allow experienced new ventures (but not inexperienced start-ups) to economize on decision-making and execution time in problem solving by drawing from an inventory of prior solutions to challenges. Protoroutines are not, however, tailored to the challenge at hand. We embed protoroutines into a simulation-based model featuring agents with differing decision-making speeds and abilities of exploring more distant solutions, two parameters influenced by founding team characteristics.
Search speed and distance are typically traded off against each other at the team design level. Protoroutines may therefore be particularly helpful in organizational contexts in which it is optimal to have both search speed and distance. We characterize the organizational contextual configurations along the dimensions of environmental turbulence and decision complexity in which protoroutines, search speed, and search distance are associated with elevated (and dampened) organizational performance. One important conclusion is that decision-making speed can be a valuable organizational resource across organizational environments. Overall, our agent-based model and simulation results deepen our understanding of how and with what performance consequence new ventures develop.

Parole chiave


organizational routine formation; founding team characteristics; new venture performance; agent-based simulation model.

Full Text

PDF

Riferimenti bibliografici


Ancona D. G., Caldwell D. F. Demography and Design: Predictors of New Product Team Performance. Organization Science 1992; 3 (3): 321-341.

Bantel K. A., Jackson S. E. Top Management and Innovations in Banking: Does the Composition of the Top Team Make a Difference. Strategic Management Journal 1989; 10 (1): 107-124.

Baron J. N., Burton M. D., Hannan M. T. The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies. Industrial and Corporate Change 1996; 5 (2): 239.

Baum J. R., Wally S. Strategic Decision Speed and Firm Performance. Strategic Management Journal 2003; 24 (11): 1107-1129.

Beckman C. M. The Influence of Founding Team Company Affiliations on Firm Behavior. Academy of Management Journal 2006; 49 (4): 741.

Boeker W. Strategic Change: The Effects of Founding and History. Academy of Management Journal 1989: 489-515.

Bresnahan T. F., Brynjolfsson E., Hitt L. M. Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence. Quarterly Journal of Economics 2002; 117 (1): 339-376.

Carpenter M. A., Fredrickson J. W. Top Management Teams, Global Strategic Posture, and the Moderating Role of Uncertainty. Academy of Management Journal 2001; 44 (3): 533-546.

Davis J. P., Eisenhardt K. M., Bingham C. B. Developing Theory Through Simulation Methods. Academy of Management Review 2007; 32 (2): 480-499.

Dess G. G., Beard D. W. Dimensions of Organizational Task Environments. Administrative Science Quarterly 1984; 29 (1): 52-73.

Eisenhardt K. M. Making Fast Strategic Decisions in High-Velocity Environments. Academy of Management Journal 1989; 32 (3): 543-576.

Eisenhardt K. M., Schoonhoven C. B. Organizational Growth: Linking Founding Team, Strategy, Environment, and Growth among US Semiconductor Ventures, 1978-1988. Administrative Science Quarterly 1990; 35 (3): 504-529.

Feldman M. S., Pentland B. T. Reconceptualizing Organizational Routines as a Source of Flexibility and Change. Administrative Science Quarterly 2003; 48 (1): 94-121.

Geletkanycz M. A., Hambrick D. C. The External Ties of Top Executives: Implications for Strategic Choice and Performance. Administrative Science Quarterly 1997; 42 (4): 654-681.

Gersick C. J. G. Pacing Strategic Change: The Case of a New Venture. Academy of Management Journal 1994; 37 (1): 9-45.

Gersick C. J. G., Hackman J. R. Habitual Routines in Task-Performing Groups. Organizational behavior and human decision processes 1990; 47 (1): 65-97.

Hannan M. T., Freeman J. Structural Inertia and Organizational Change. Readings in Organizational Decline: Frameworks, Research, and Prescriptions 1988.

Hong L., Page S. E. Groups of Diverse Problem Solvers Can Outperform Groups of High-Ability Problem Solvers. Proceedings of the National Academy of Sciences 2004; 101 (46): 16385-16389.

Ichniowski C., Shaw K., Prennushi G. The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines. The American Economic Review 1997; 87 (3): 291-313.

Judge W. Q., Miller A. Antecedents and Outcomes of Decision Speed in Different Environmental Contexts. Academy of Management Journal 1991; 34 (2): 449-463.

Kaplan S. N., Stromberg P. Financial Contracting Theory Meets the RealWorld: An Empirical Analysis of Venture Capital Contracts. The Review of Economic Studies 2003; 70 (2): 281-315.

Kauffman S. A. The Origins of Order: Self-organization and Selection in Evolution. New York, USA: Oxford University Press, 1993.

Keats B. W., Hitt M. A. A Causal Model of Linkages among Environmental Dimensions, Macro Organizational Characteristics, and Performance. Academy of Management Journal 1988; 31 (3):570-598.

Keck S. L. Top Management Team Structure: Differential Effects by Environmental Context. Organization Science 1997; 8 (2): 143-156.

Levinthal D. A. Adaptation on Rugged Landscapes. Management science 1997; 43 (7): 934-950.

March J. G. Exploration and Exploitation in Organizational Learning. Organization Science 1991; 2 (1): 71-87.

March J. G., Simon, H. A. Organizations. New York: Wiley, 1958.

Murray A. I. Top Management Group Heterogeneity and Firm Performance. Strategic Management Journal 1989; 10 (1): 125-141.

Nelson R. R., Winter S. G. An Evolutionary Theory of Economic Change. Cambridge, MA: Belknap, 1982.

Paoli M., Prencipe A. Memory of the Organisation and Memories within the Organisation. Journal of Management and Governance 2003; 7 (2): 145-162.

Rivkin J. W., Siggelkow N. Balancing Search and Stability: Interdependencies Among Elements of Organizational Design. Management Science 2003; 49 (3): 290-311.

Ruef M., Aldrich H. E., Carter N. M. The Structure of Founding Teams: Homophily, Strong Ties, and Isolation among US Entrepreneurs. American Sociological Review 2004; 69 (2): 317-317.

Schweiger D. M., Sandberg W. R., Ragan J. W. Group Approaches for Improving Strategic Decision Making: A Comparative Analysis of Dialectical Inquiry, Devil's Advocacy, and Consensus. Academy of Management Journal 1986; 29 (1): 51-71.

Simon H. A. The Architecture of Complexity. Proceedings of the American Philosophical Society 1962; 106 (6): 467-482.

Simon H. A. Cognitive Science: The Newest Science of the Artificial. Cognitive Science 1981; 4 (1): 33-46.

Smith K. G., Smith K. A., Olian J. D., Sims Jr H. P., O'Bannon D. P., Scully J. A. Top Management Team Demography and Process: The Role of Social Integration and Communication. Administrative Science Quarterly 1994; 39 (3).

Stinchcombe A. L. Organizations and Social Structure. Handbook of Organizations 1965: 142-193.

Tushman M. L., Anderson P. Technological Discontinuities and Organizational Environments. Administrative science quarterly 1986: 439-465.

Virany B., Tushman M. L., Romanelli E. Executive Succession and Organization Outcomes in Turbulent Environments: An Organization Learning Approach. Organization Science 1992; 3 (1): 72-91.




ISSN: 1971-5293

ISSNe: 2283-3374


Esperienze d'Impresa, Reg. Tribunale Salerno n. 875 del 3/11/1993