IDEAS home Printed from https://ideas.repec.org/p/zrh/wpaper/337.html
   My bibliography  Save this paper

Team Heterogeneity in Startups and its Development over Time

Author

Listed:
  • Ulrich Kaiser

    () (Department of Business Administration, University of Zurich)

  • Bettina Müller

    () (Centre for European Economic Research, Dept. of Industrial Economics and International Management, Mannheim)

Abstract

We investigate the workforce heterogeneity of startups with respect to ed- ucation, age and wages. Our explorative study uses data on the population of 1,614 Danish firms founded in 1998. We track these firms until 2001 which enables us to analyze changes in workforce composition over time. Such a dynamic analysis constitutes a hitherto neglected area of entrepreneurship re- search. To assess relative workforce heterogeneity, we construct a simulated benchmark to which we compare observed workforce heterogeneity. We find that the initial workforce is relatively homogeneous compared to our bench- mark. Our result holds both for non-knowledge-based and, to a lesser extent, knowledge-based startups. This seems surprising since a vast management literature advocates heterogeneous teams. The difficulties associated with workforce heterogeneity (like affective confl ict or coordination cost) as well as "homophily" (peoples inclination to bound with others with similar char- acteristics) hence appear to generally overweigh the benefits of heterogeneity (like greater variety in perspectives or more creativity). We also document that workforces become more heterogeneous over time - startups add work- ers with skills di erent from the workforce at startup. The initial supposedly "poor" mix of workforce characteristics is hence adjusted as the startup ma- tures. This increase in workforce heterogeneity is, however, smaller compared to our benchmark but substantially larger than is team additions had the same characteristics as the initial team members.

Suggested Citation

  • Ulrich Kaiser & Bettina Müller, 2013. "Team Heterogeneity in Startups and its Development over Time," Working Papers 337, University of Zurich, Department of Business Administration (IBW).
    • Handle: RePEc:zrh:wpaper:337
    as

    Download full text from publisher

    File URL: http://repec.business.uzh.ch/RePEc/zrh/wpaper/337_IBW_full.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alex Coad & Bram Timmermans, 2012. "Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs," DRUID Working Papers 12-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
    3. Bram Timmermans, 2010. "Old Wine in New Bottles: The Effect of Previous Co-Worker Experience on the Survival of New Firms," DRUID Working Papers 10-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Macmillan, Ian C. & Siegel, Robin & Narasimha, P. N. Subba, 1985. "Criteria used by venture capitalists to evaluate new venture proposals," Journal of Business Venturing, Elsevier, vol. 1(1), pages 119-128.
    5. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    6. Scott Shane & Toby Stuart, 2002. "Organizational Endowments and the Performance of University Start-ups," Management Science, INFORMS, vol. 48(1), pages 154-170, January.
    7. Roure, Juan B. & Keeley, Robert H., 1990. "Predictors of success in new technology based ventures," Journal of Business Venturing, Elsevier, vol. 5(4), pages 201-220, July.
    8. Colombo, Massimo G. & Piva, Evila, 2012. "Firms’ genetic characteristics and competence-enlarging strategies: A comparison between academic and non-academic high-tech start-ups," Research Policy, Elsevier, vol. 41(1), pages 79-92.
    9. Zacharakis, Andrew L. & Meyer, G. Dale, 1998. "A lack of insight: do venture capitalists really understand their own decision process?," Journal of Business Venturing, Elsevier, vol. 13(1), pages 57-76, January.
    10. Ensley, Michael D. & Pearson, Allison W. & Amason, Allen C., 2002. "Understanding the dynamics of new venture top management teams: cohesion, conflict, and new venture performance," Journal of Business Venturing, Elsevier, vol. 17(4), pages 365-386, July.
    11. Roure, Juan B. & Maidique, Modesto A., 1986. "Linking prefunding factors and high-technology venture success: An exploratory study," Journal of Business Venturing, Elsevier, vol. 1(3), pages 295-306.
    12. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    13. Amason, Allen C. & Shrader, Rodney C. & Tompson, George H., 2006. "Newness and novelty: Relating top management team composition to new venture performance," Journal of Business Venturing, Elsevier, vol. 21(1), pages 125-148, January.
    14. Bram Timmermans, 2010. "The Danish Integrated Database for Labor Market Research: Towards Demystification for the English Speaking Audience," DRUID Working Papers 10-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    15. Jay D. Teachman, 1980. "Analysis of Population Diversity," Sociological Methods & Research, , vol. 8(3), pages 341-362, February.
    16. Martin Ruef, 2002. "Strong ties, weak ties and islands: structural and cultural predictors of organizational innovation," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 427-449, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brixy, Udo & Brunow, Stephan & D''Ambrosio, Anna, 2017. "Ethnic diversity in start-ups and its impact on innovation," IAB Discussion Paper 201725, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    labor Entrepreneurship; Startups; Skill Heterogeneity; Team Dynam- ics;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zrh:wpaper:337. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniela Koller). General contact details of provider: http://edirc.repec.org/data/ibuzhch.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.