M. Diane Burton

Coming From Good Stock: Career Histories and New Venture Formation

We examine how the social structure of existing organizations influences entrepreneurship and suggest that resources accrue to entrepreneurs based on the structural position of their prior employers. We argue that information advantages allow individuals from entrepreneurially prominent prior firms to identify new opportunities. Entrepreneurial prominence also reduces the perceived uncertainty of a new venture. Using a sample of Silicon Valley start-ups, we demonstrate that entrepreneurial prominence is associated with initial strategy and the probability of attracting external financing. New ventures with high prominence are more likely to be innovators; furthermore, innovators with high prominence are more likely to obtain financing.

Building the Iron Cage: Determinants of Managerial Intensity in the Early Years of Organizations

Considers the impact of founding conditions on the later administration and management of technology startups in Silicon Valley. Data were collected in 1994-1995 by survey and interviews with 173 technology firms that had at least 10 employees and were no more than 10 years old. This research draws on the Stanford Project on Emerging Companies. The interviews with firm founders identified three dimensions along which work and employment are organized. These are: attachment, basis of coordination and control, and selection. Within these three dimensions, founders created employment models related to their views about desired organizational culture, strategies for employee selection, or perceptions of employee motivation. These three organizational dimensions are used to explain the five basic employment models - engineering, star, commitment, bureaucracy, and autocracy. Results show that the bureaucratic model is the most administratively intense with autocracy in second place, then engineering, star, and commitment. Both the model that is chosen by the founder and the gender balance in these firms affected the level of managerial intensity that resulted in the firms. Firms with a higher proportion of women in the first year became less bureaucratized than other firms. Administrative intensity is found to increase drastically when a firm goes public. This likely results from the need for more financial reporting, regulatory compliance, and investor relations management. Overall, this analysis demonstrates the path-dependence in bureaucratization. (SRD)

Labor pains: Change in organizational models and employee turnover in young, high-tech firms.

Organizational theories, especially ecological perspectives, emphasize the disruptive effects of change. However, the mechanisms producing these effects are seldom examined explicitly. This article examines one such mechanism—employee turnover. Analyzing a sample of high‐technology start‐ups, we show that changes in the employment models or blueprints embraced by organizational leaders increase turnover, which in turn adversely affects subsequent organizational performance. Turnover associated with organizational change appears to be concentrated among the most senior employees, suggesting “old guard disenchantment” as the primary cause. The results are consistent with the claim of neoinstitutionalist scholars that founders impose cultural blueprints on nascent organizations and with the claim of organizational ecologists that altering such blueprints is disruptive and destabilizing.

Founding the Future: Path Dependence in the Evolution of Top Management Teams from Founding to IPO

We contrast life-cycle and path-dependent views of entrepreneurial firms by examining the evolution of top management teams. We show how initial conditions constrain subsequent outcomes by demonstrating that the founding teams prior functional experiences and initial organizational functional structures predict subsequent top manager backgrounds and later functional structures. We find that narrowly experienced teams have trouble adding functional expertise not already embodied in the team. We also find that firms beginning with a limited range of functional positions are less likely to develop complete functional structures. Importantly, we do not find functional structure and functional experience to be interchangeable. We find that firms beginning with more complete functional structures are likely to go public faster, and firms beginning with broadly experienced team members obtain venture capital more quickly regardless of the experience and structural composition of the top management team in place at the time of these outcomes. Further, broadly experienced founding teams that build an early team with a full complement of functional positions achieve important milestones faster than firms that start with neither experience nor structure. This suggests that creating positions as “placeholders” in new ventures, where positions are created and filled with the intent of bringing individuals with more relevant experience onboard later, is not obviously a path by which to succeed. By examining the origins of top management team experience and functional structures, we illustrate the lasting imprint of founders on top management team composition and firm outcomes.

Leaving a Legacy: Position Imprints and Successor Turnover in Young Firms

This article considers how local firm histories influence individual turnover rates in organizations. We argue that position imprints—the legacies left by the first incumbents of particular functional positions—constrain subsequent position holders. We show that the functional experience of the person who creates a position influences the turnover rate of successors who later occupy that position. When the first position holder has an atypical background, all successors experience high turnover rates. Individuals who are both typical with respect to the normative environment and similar to the position imprint have the lowest turnover rates. Surprisingly, we find lower turnover rates among individuals who match the position imprint even if they violate normative expectations. Thus, contrary to institutional theory predictions, we find that local firm histories dominate. In revealing how social structures emerge within firms and affect individual outcomes, our research revisits core topics of bureaucratization and organizational stratification including idiosyncratic jobs, occupational segregation, and differential mobility. In addition, we integrate structuralist and interactionist perspectives on role theory by considering how roles are created. Finally, in demonstrating the effects of position imprints on successor mobility we add a temporal dimension to theories of turnover.

Bringing Organizational Demography Back In: Time, Change, and Structure in Top Management Team Research

Organizational scholars have achieved broad consensus on two facts: the era of the loyal “organization man” is over, and traditional large bureaucracies are being replaced by new organizational forms. Commentators in both the popular press and the scholarly literature have documented the myriad ways that jobs at all levels are less secure and how both organizations and employees are less loyal (cf., Cappelli, 1999; Osterman, 1999). These changes in the nature of the employment relationship are particularly visible in the executive ranks. The promotions and ousters of corporate leaders that are core to academic theories of governance and motivation are chronicled in the press in colorful detail. Executive tenure has declined and executive mobility is facilitated by professional executive search fi rms (Khurana, 2002). At the same time, we see widespread change in how organizations are designed and managed (Barley, 1992; Guillen, 1994); and in diff erent eras, diff erent organizational forms dominate (e.g., functional, divisional, and matrix forms; see Chandler, 1962; Davis et al., 1994; Shenhav, 2000; Zuckerman, 2000). We have seen the rise (Fligstein, 1987) and fall (Davis, 2009) of fi nancial capitalism, and the emergence of new executive roles such as the Chief Operating Offi cer (COO) (Hambrick and Cannella, 2004) and the Chief Financial Offi cer (CFO) (Zorn, 2004; Zorn et al., 2004). Given the known game of musical chairs in the executive suite as people come and go, and the extensive changes in organizational structures that change the chairs drawn up to the table, it is surprising that most scholarship on top management team (TMT) demography is cross- sectional in nature and implicitly treats the TMT as a stable entity. In the 25 years following the publication of Hambrick and Mason’s (1984) “Upper echelon theory” and Pfeff er’s (1983) “Organizational demography,” TMT research has been one of the most vibrant research areas in organizational studies. Researchers have conducted an impressive array of studies linking TMT characteristics to such factors as organizational performance, strategic change, and turnover. Despite these vigorous eff orts, attempts to synthesize the cumulative wisdom have been unproductive. The fi ndings are often contradictory, the methods and measures inconsistent, and the theoretical underpinnings poorly specifi ed (Finkelstein and Hambrick, 1996; Jackson et al., 2003;

A Careers Perspective on Entrepreneurship

Excerpt] What if being an entrepreneur were treated like any other occupation—teacher, nurse, manager? What if the decision to found a new venture were thought of as one of many options that individuals consider as they try to structure a meaningful and rewarding career? How would the field of entrepreneurship research be different? In our view, there is much to be learned by conceiving of entrepreneurship not solely as a final destination, but as a step along a career trajectory. Doing so opens the study of entrepreneurship to a wider range of scholarly insights, and promises important insights for entrepreneurial practice, training, and policy. This special issue takes an important step in this direction.

Introduction: Bringing Jobs Back In: Toward a New Multi-Level Approach to the Study of Work and Organizations

Abstract In this paper, we call for renewed attention to the structure and structuring of work within and between organizations. We argue that a multi-level approach, with jobs as a core analytic construct, is a way to draw connections among economic sociology, organizational sociology, the sociology of work and occupations, labor studies and stratification and address the important problems of both increasing inequality and declining economic productivity.

Do Start-Ups Pay Less?

The authors analyze Danish registry data from 1991 to 2006 to determine how firm age and firm size influence wages. Unadjusted statistics suggest that smaller firms paid less than larger firms paid, and that firm age had little or no bearing on wages. After adjusting for differences in the characteristics of employees hired by these firms, however, they observe both firm age and firm size effects. Larger firms paid more than did smaller firms for observationally equivalent individuals but, contrary to conventional wisdom, younger firms paid more than older firms. The size effect, however, dominates the age effect. Thus, although the typical start-up—being both young and small—paid less than a more established employer, the largest start-ups paid a wage premium.

Experience through Enterprise: Entrepreneurial Careers, Fates, and Fortunes

The symposium as organized provides a platform to discuss the career of the ex-entrepreneur. Four papers are assembled, addressing post-entrepreneurial career outcomes (such as entrepreneurial pers...