Team design and performance : a study of short-term enterpreneurial teams

Abstract

In this dissertation, I study the factors that influence the performance of short-term teams engaged in an entrepreneurial activity. This is an important area to study because team-started businesses account for a disproportionately greater number of high-growth firms (Kamm, Shuman and Seeger, 1990). Unfortunately, there has been limited research on team started businesses. The entrepreneurial teams that I study are participants in the MIT $50K Business Plan Competition. This sample is chosen because business plan competitions are increasingly becoming the meeting place for new ideas, people interested in starting business ventures and others who are interested in participating in these ventures (e.g., patent attorneys, investors and venture capitalists). In addition, the sample overcomes some problems typical of many entrepreneurship studies including left censoring biases, population identification and low response rates. Chapter 1 is an overview of the thesis while chapter 2 describes the entrepreneurial activities at MIT. Chapter 3 describes the MIT $50K Business Plan Competition and elaborates the steps taken to collect information from competition participants. Since entrepreneurial team performance is influenced by factors both internal and external to the team, this thesis takes a comprehensive approach, presenting three papers that explore the effects of team composition, team design and external contacts on entrepreneurial team performance. Both external and team-member evaluations of entrepreneurial team performance are used. Both evaluations are important because positive external evaluations can increase the venture's chances of getting resources (e.g., Roberts, 1991a) while positive internal evaluations can increase the chance that members will be satisfied with their teams and continue in team involvement (e.g., Hackman, 1987). The first paper, described in chapter 4, explores the influence of team design, both team structure and member interaction, on short-term entrepreneurial team performance. The findings show that there are different drivers of performance. While task design predicts external evaluations of performance, the way in which members interact predicts member-rated performance. The second paper, described in chapter 5, explores the influence of team-member functional diversity on short-term entrepreneurial team performance, with team design as the mediating variable. This study shows the need to investigate the indirect effects of functional diversity on performance and to distinguish between external and team-member evaluations. The results show that functional diversity has negative indirect effect on member-rated performance but no effect on external-rated performance. The third paper, described in chapter 6, explores the influence of member contacts with people outside the team on short-term entrepreneurial team performance. The study shows that high-performing teams gather a range of information and are efficient in information gathering. The study shows that social capital concepts, such as strong and weak ties, can be integrated with the team literature. The concluding chapter proposes a model that combines the influence of internal and external factors on entrepreneurial team performance. The chapter also summarizes the findings and compares them to the new venture and team literatures. Finally, areas for future research are proposed.