From Exploration to Exploration: The effects of NVT Characteristics on Performance

Abstract

Research on new venture teams (NVT) has largely addressed direct relationship between team functioning and organizational outcomes such as strategic choices and performance levels. However, there is limited prior work on the intermediary mechanisms that more precisely explain how team inputs lead to firm performance (Kolt, Hmieleski, Bradley and Busenity, 2014). This study aims to extend the understanding of NVT research by investigating whether the NVT characteristics (i.e. Knowledge, Motivation, and Diversity including both Gender and Culture) may enhance performance by facilitating exploration versus exploitation of entrepreneurial activities. For this purpose, we use an experimental and longitudinal research design of a simulation-based approach with a business game that simulates start-up business processes at early stage of new economic activities. Building upon existing upper echelons theory (UET), diversity theories and organizational learning, and applying an inputs-mediators-outcomes (IMO) framework, we show that NVT characteristics such as team motivation, knowledge and both gender and cultural diversity significantly affect performance, and in a way which is mediated by the levels of innovation behavior in terms of explorative and exploitative activities the teams engaged in. Since NVT is critical to successful entrepreneurship process and more specifically at firm’s early stage of development and performance, this study is one the first to methodologically decompose team characteristics-performance relationship into the exploration, exploitation, and all phases of team’s innovation behavior to test the proposed hypotheses. We discuss the implications of our findings for both researchers and practice.

The preliminary results of this paper have been presented at ACERE 2016 - 2 Feb 2016 to 5 Feb 2016 Gold Coast, Australia. We also acknowledge Per Davidsson, Henry Burger and Don Siegel for constructive advises at initial stage of the development of this paper.

dt ogilvie bio

Dr. dt ogilvie is Professor of Urban Entrepreneurship & Economic Development and former Distinguished Professor of Urban Entrepreneurship and former Dean and Professor of Business Strategy at Saunders College of Business at the Rochester Institute of Technology. She is the Founder of the Center for Urban Entrepreneurship (CUE). Dr. ogilvie is formerly Professor of Business Strategy & Urban Entrepreneurship at Rutgers Business School - Newark and New Brunswick. She was Founding Director of The Center for Urban Entrepreneurship & Economic Development (CUEED) and Founding Director of the Scholarship Training and Enrichment Program (STEP), which helps underprepared incoming freshmen succeed at Rutgers Business School. Dr. ogilvie has published in top journals and 12 of her research papers have been recognized with research awards. Her research interests include strategic decision making and the use of creativity to enhance business and battlefield decision making and applying complexity theory to strategy and creativity; executive leadership strategies of multicultural women executives; women in the executive suite; assessing environmental dimensions; strategic thinking in the 21st century; cognition and strategic decision making; and entrepreneurship and economic development of urban cities.

Dr. ogilvie is presently a loaned professor to the City of Rochester, where she serves as Senior Advisor to the Mayor on Economic Development and Urban Entrepreneurship.