Case studie : analysing the development of the team composition and the teamwork when growing from a start-up towards a small enterprise : innovation booster

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MSC. THESIS

CASE STUDY: ANALYSING THE DEVELOPMENT OF THE TEAM COMPOSITION AND

THE TEAMWORK WHEN GROWING FROM A START-‐UP TOWARDS A SMALL

ENTERPRISE

INNOVATION BOOSTER

UNIVERSITY OF AMSTERDAM (FEB) Master Business Administration Track: Entrepreneurship and Innovation

Supervisor: T. Gruijters Second supervisor: T. Vinig

BY Cecile Post Student number: 10719628 Final version: 14 Augustus 2015

KEY WORDS: start-‐up, small enterprises, team composition, teamwork and group development stages

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Statement of Originality

Cecile Post, who declares to take full responsibility for the contents of this document, writes this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Coming together is a beginning. Keeping together is progress. Working

together is success (Henry Ford)

Management Summary

This research is from great interest as todays’ environment has more and more start-‐ups popping up around the world. But, when starting up a business what process is a starting enterprise undergoing during the first three years? And what factors are influencing the team during this process? Plus, what actually happens with the teamwork during this timeframe? Up till now, the literature lacks an understanding on which factors are affecting the team and the teamwork within a start-‐up team when this is growing and expanding from a start-‐up towards a small enterprise. Our exploratory study discusses the above-‐introduced situation by analysing a single case in-‐depth. This company, called Innovation Booster, has opened its doors nearly three years ago in Amsterdam. By conducting fourteen semi-‐structured interviews with all current employees of the company we were able to gather qualitative data. We found that the balance between homogeneous and heterogeneous is a key element in a successful team. Next to this, teamwork changes as the team grows. The possibilities for communication decline and decision-‐ making shift from the founding team towards the new team members. Lastly, entrepreneurs can be handling their enterprise based on effectuation. However, it becomes more interesting for an entrepreneur to be handled their business according to causation as it further grows. The results of our study will be from great interested for two parties. First of all, entrepreneurial founders could use the study to assist their knowledge of approaching their team during this particular period. Secondly, the science could see this study as a starting point to further explore this topic.

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Acknowledgement

In this final phase of conducting this thesis, I would like to thank everybody who supported me through this process. Special thanks go to my supervisor, Mr Gruijters. I want to thank him for his patience, input, guidance and support through the illogicality path I walked during the process of writing my thesis. With his supervision throughout the summer months he motivated me to conduct this thesis. Secondly, I want to thank Innovation Booster for opening their doors for me and giving me the possibility to discover the process in full transparency. The warm welcome and the support of the respondents were from great help during the investigation period, and made it a fun and delightful experience. Lastly, I would like to thank my friends and family who supported me throughout the process.

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1. Introduction

Everyday around 137,000 new start-‐ups open their doors around the world (Mason, 2015). And, Johnson (2015) foresees a future ahead with an even more creative and innovative generation that will generate even more start-‐ups in the upcoming years However, out of this number of starting businesses only forty per cent are still running after the first year. What is the main reason for this high rate of closures? Over sixty per cent of the start-‐ups that closed down gave as primary reason that they were facing troubles with the team (Mol, Khapova & Elfring, 2015). Here we should question ourselves: is it genuinely so crucial and difficult to create a proper team when establishing a business? And what factors should we actually pay attention to when creating this entrepreneurial team? What is actually driving them?

In this research we are providing an inside in how a team is processed and approached in terms of growth during a start-‐up phase. Personally, I find this topic extremely interesting, since it provides me the possibility to investigate a real life example on how a team expands its team and how this process could go. With the idea in the back of the head that I will be running such a process in a very short period of time when setting up a start-‐up on my own. During my Bachelors I have been an intern in 2 start-‐ups and 2 MNEs. And, in one of the start-‐ups I experienced the difficulties a start-‐up had concerning their team and the pace of keeping up with the growth process. This situation was mismanaged and the feeling of being a team and doing the work together was lost. That made me realizes the importance of focusing on these points are as important as the focus on the operational business such as marketing, finance etc. But, this study will not be solely interesting for me. First of all, as entrepreneurial founders are struggling, it could be useful to apply this study to assist their knowledge on approaching their team during this particular period. Secondly, the science could see this study as a solid starting point to further explore this topic.

Even though authors are aware of the interest of this topic (Clarysse & Moray, 2004), none have investigated this in these specifics. We can found literature that is related solely focusing on team diversity within the team (Davis, Aldrich & Longest, 2009; Kwapisz, Bryant & Rosso, 2014). Or, on the process itself as conducted in the process theory of Tuckman (1965). As well there is literature concerning team composition (Zhou & Rosini, 2015). Therefore we conducted a literature review that is covering specific aspects of our research.

First, we debate the importance of team composition in this paper. The diversity amongst the team and which aspects of diversity are enhanced results in creating an ideal environment of how a team composition should be. As well as, the entrepreneurial personality each team

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member takes with them is from great importance in a team. Then the focus will shift towards teamwork. What can be said about the corporate culture? How do people communicate? What about the helping-‐behaviour of team members? And what about the freedom and responsibility to make decisions? Does all these factors change over time when the team grows? Then, we investigate what team development process a team is going through according to the model of Tuckman (1965). What we see is that a team development includes five different phases. Interesting to discuss is what is happening with the model of we apply it to our start-‐up. Another important aspect in the establishment of the start-‐up is that it is more often an e entrepreneur that is operating together with another person instead of a singular entrepreneur (Gartner, Shaver, Gatewood and Katz, 1994). And, as if the most start-‐ups are growing very fast, the team grows with them. Which makes it even more interesting to evaluate the relationship between the start-‐up founders and the team they will create around them. Munoz-‐Bullon, Sanchez-‐Bueno & Vos-‐Saz (2015) examines the specific role of contributions a team can have and what role the founder has in this situation. Why are their entrepreneurial personalities from importance? How does their background or experience influence the way of doing business? And how are they approaching the business model? Lastly, we analyse the difference of a start-‐up and Micro and Small Enterprise. What happens with the enterprise? How does this change over the period of operating for three years?

Based on the finding in the literature study we have introduced our propositions. These propositions are established to give guidance on the qualitative research and to answer the questions that cannot be answered based on the current literature. By doing this we were able to answer the following research question in the end of the research:

Research Question: What happens with the team composition and teamwork when a start-‐ up grows towards a small enterprise?

Our claims are built upon a case study by a small enterprise that has been established approximately three years ago in Amsterdam. This study had the aim to create a deeper understanding on relationships between people on the work floor in terms of the team composition and teamwork. As mentioned by Maxwell (2005) a research suchlike is focusing on a particular situation instead of a rigorously comparison to other situations. Which makes it a conducting formative evaluation, and gives the reader the possibility to help improving their existing practice. This thesis is used to generate a framework for understanding how an organization grows and how their team and teamwork grow with them. The study builds upon prior ideas that are introduced in the literature review. First we want to emphasize this one

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study will be of interest since it introduces the reader to a new world, next to the currently existing literature (Siggelkow, 2007). And as mentioned by Eisenhardt (1989) a case study is a suitable research strategy to understand the dynamics presented within a single setting and can be used to generate theory.

Nonetheless, to ground a theory it is important that cross-‐case patterns are established, which desired multiple case analyses. Therefore, for the establishment of a theory it will be important to analyse more cases, but this first case study will function as a start for this process.

The case study is conducted by interviewing all the current employees at the enterprise of our case. Which gave us fourteen in-‐depth interviews on how the start-‐up changed during the last three years. The enterprise – named Innovation Booster – is an innovative enterprise that is facilitating innovation-‐consulting projects for large enterprises. The vision behind the service is to bring in a new start-‐up mind into a world of large enterprises, because these enterprises have often lost this kind of vision a long time ago and are dealing with a junk of regulations and bureaucracy. The aim of the study is not to focus on this enterprise in specific, but to focus on a process within such a case. Therefore, in the results we will especially review the process of such a case.

In a research you often deal with confidentiality principals. The participating party did not demanded anonymity and therefore we decided to leave the name of the firm in the thesis. Yin provided two main factors supporting the importance of disclosing the case name (2013). First, to give the reader the opportunity to recollect all prior information that he or she may have studied about the same case. This first argument is not from great importance in our situation, since it is the first case study within this enterprise. But the second argument is. Namely, that the absence of disguised names will make the entries case easier to review.

This research proceeds according to the following structure: the literature review is presented in chapter 2. Next, chapter 3 draws the methodology for this research. The results of the study are presented in chapter 4. Finally, section 5 will discuss the findings. And this report wraps up with the conclusion in chapter 6.

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2. Literature Review

This literature review gives us the possibility to put the existing literature concerning the topic we investigated in a certain perspective (Maxwell, 2005). The literature review kicks of with discussing the importance of diversity in team composition. Herewith we set a start on what a team is and how it should be conducted. Next, the teamwork within a team is analysing in more detail. The topics that are going to be touched are corporate culture, communication, team-‐ helping behaviour and decision-‐making. Thirdly, we look at the process of forming a team. Since our research question is focusing on the development of both the team composition and the teamwork which functions as a backbone of the process that we are analysing. Then, we discuss the importance and the influence the founders have in this process. Followed up by the differences according to the literature when talking about a start-‐up and a small enterprise. Together, these five sub sections are forming a theoretical framework in which the research has been conducted. Based on the findings in this literature we established propositions that are introduced in the last sub section of this chapter.

This literature review attempts to identify all interesting empirical and conceptual studies concerning the prior introduced topics. For this purpose, computerized searches have been conducted in Google Scholar. The following keywords have been search indicators: start-‐up team / company / team development process / (start-‐up) teams, team diversity / entrepreneurial personality / factors enhancing/resisting teamwork To ensure a certain level of quality amongst all used empirical studies, the Amsterdam Business School Comprehensive Journal List is used to check the reliability of the papers. As well, we investigated the references of the articles that have been of great help for this literature review.

2.1 TEAMS COMPOSITION

A crucial factor in creating a profitable firm is the team composition, since these employees will be a potential source for scare assets (Munoz-‐Bullon et al, 2015). The definition of team is “a social system of two or more people that are embedded in organizations (context), whose member perceive themselves as such and are perceived as members by others (identity), and who collaborate on a common task (teamwork)” (Hoegl, 2005). In this literature review we have made the distinction between the team in general as presented in this chapter. And, a part of this team is the founding team that consists of the founders of the enterprise. In section 2.4 we will describe to the founding team and the extraordinary influences they have on a team in more detail.

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Nonetheless, the composition of such a team is from great importance. A very well known saying in the world of venture capital is that they would preferable start a project “with a grade A team with a grade B idea than in a grade B team with a grade A idea” (Franke, Gruber, Harhoff & Henkel, 2008). Teams support the creating of new opportunities. Add to this the fact that they make decisions; this will also affect the performance and success of the organization over time (Munoz-‐Bullon et al, 2015). But what makes a grade A team? In the upcoming paragraphs the following subjects will be discussed: team diversity and the desire for heterogeneousness and homogeneous. Plus, the topic of (entrepreneurial) personalities is touched. These components support the creation of such an A-‐level team.

2.1.1 Diversity

As mentioned before, forty per cent of the start-‐ups close down during the first year. Due to the fact that over sixty per cent of these shutdowns gave as reason that there were troubles with the entrepreneurial team (Mol, et al., 2015). According Kwapisz et al. (2014) the diversity of a start-‐ up team will lead a higher change of becoming a successful start-‐up. Next to this, the team composition will have a mind-‐boggling impact on the outcomes and the processes and progresses of a firm (Molleman, 2005). In the literature different approaches are given to describe team diversity. In this research the focus is on the two-‐factor approach of Zhou et al. (2015). This approach analyses diversity as a visible/non-‐visible diversity amidst team members. We first discuss this manner, and then give a critical opinion on the presented method. Lastly, we investigate the desire for heterogeneousness and homogeneousness in this section.

The visible and non-‐visible aspects are introduced by Zhou et al. (2015) to provide an insight in diversity. The work of Jackson, May and Whitney (1995) is used in our literature to show this framework. The visible factors consist of (1) race & ethnicity, (2) age and (3) gender. And non-‐ visible differences are factors such as skills and abilities, industry experience and personality differences.

Shore, Chung-‐Herrera, Dean, Ehrhart, Jung, Randel & Singh (2009) provide a more detailed view concerning the visible dimensions of diversity. Beginning with the race and ethnicity dimension. These authors found that a higher level of racial/ethnic diversity will lead to many beneficial effects. Such as a higher level of information, stronger ability of problem solving, increased creativity, positive effect on conflict and debate, more creativity, increased quality in decision-‐taking and lastly, a better understanding of cultural backgrounds. Nevertheless, the constructive effect concerning variation has not been proven yet. Overall, most results have shown zero or negative results concerning diversity towards a team (Shore et al., 2009).

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Secondly, studies concerning age diversity have proven that younger employees are more desirable to hiring than middle-‐aged or older workers (Shore et al, 2009). Chiefly, negative results in diversity in regards to older employees have been found when the older employee is relatively older then the team or management. I would like to mention that the research concerning this topic has been merely conducted in the Western world, which makes it very suitable for our study.

Thirdly, looking at the gender dimension research showed that diversity leads to a higher level of efficacy and improved group outcomes. Nonetheless recent studies hold negative assumptions concerning this level of diversity since these are building on old theories. Such as the similarity-‐attraction theory, social identity or discrimination. In my opinion, these studies seem a fairly out-‐dated and therefore it feels more reasonable to focus on the positive effects described earlier.

The non-‐visible diversities are (1) skills and abilities, (2) values and attitudes and (3) personality differences.

Starting with the skills and abilities according to the finding of Molleman (2005). Here, the diversity among the team results in the ability to learn from each other that makes it more presumable that new ideas are generated or combined within the team. Besides, it has been proven that creativity and motivation increase in teams whose members differ according to skills or functional background.

Secondly, the values and attitudes is something that differs in each and every team. Which is shown to be a positive effect. Since this dimension is hard to value and surely each team will have diversity amongst their values and attitudes. We solely are looking at the values and attitudes that could be important for this study: feeling responsible for attaining team goals and responsiveness to help team members.

Finally, the personality differences are stated as one of the dimensions. Since I consider this is a very important dimension it is decided to devote a specific subsection on this topic. Why is this so influential on the team composition? During prior working experiences I discovered that most of the diversity dimensions mentioned before fade away if the personalities are tuned to one other. Many studies support this view (Smith, 1967; Carland, Hoy, Boulton & Carland, 1984; Antonic, Bratkovic, Singh & DeNoble, 2014).

Mannix and Neale (2005) provide as critical note on the two-‐factor approach that it only covers a limited amount of factors. Molleman (2005) supports this view and mentions that there is a inconsistency of research concerning diversity in teams and the effect this has on team functions

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due to the focus most authors put on a sole dimension instead of the diversity picture as whole. In addition to this, attention should be paid on the self-‐categorization theory (Chatman and Spataro, 2005). This theory implies that people base an opinion on the demographic differences (especially those who are visible) to classify their team members in a group that have the same demographic differences as their in-‐group and team members with a different visible demographic background as an out-‐group. As a consequence, the team members let this influence the level of cooperation within a team.

All by all, the visible and non-‐visible diversity factors are seen as stable deviation by multiple authors (Milliken & Martins, 1996). And these two factors are not mutually exclusive. For instance, ethnic difference could be identified with education, socioeconomic status and values & attributes.

Now we have introduced the topic of diversity, it is time to take a specific look into the entrepreneurial personalities, which is one of the aspects of team composition diversity. Then, we will summarize this section by introducing an overview on factors that should be heterogeneous and which should be homogeneous within the perfect team composition.

2.1.2 (Entrepreneurial) Personalities

Entrepreneurial types and personalities have received a mass of attention in academic literature over the past years (e.g. Smith, 1967; Carland et al., 1984). Herewith, different models are established to evaluate the personality focusing on the entrepreneurial aspects. But not many studies have been focusing on the personalities of team members and the results this has on the teamwork and final results (Milliksen et al. 1996). On forehand, we stress that the personalities of the team are going to be important for the discussion concerning the team diversity.

The Myers-‐Briggs type indicator (MBTI) is based on Jung’s theory. Myers created the MBTI with the idea that different jobs favored contrasting personalities. Jung added a structure to make the connection between personalities and job performance (Pittenger, 1993). Jung’s theory is based on four scales of personalities: Extraversion, introversion / sensing, intuition / thinking, feeling and judging. And Myers (1992) created the following dimensions:

-‐ Extraversion (E) Interested in people and things in the world around them -‐ Introversion (I) Interested in the ideas in their minds that explain the world

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-‐ Intuition (N) Interested in what can be imagined and seen with “the mind’s eye”

-‐ Thinking (T) Interested in what is logical and works by cause and effect -‐ Feeling (F) Interested in knowing what is important and valuable

-‐ Judging (J) Interested in acting by organizing, planning, deciding -‐ Perceiving (P) Interested in acting by watching, trying out, adapting

According to the Myer-‐Briggs type indicator employees can be four letters in total. One of each of the pairs presented above. Each of the sixteen personality types are seen as qualitatively unique and represent other specialties (Pittenger, 1993). There are some typical types for entrepreneurial personalities. For example, entrepreneurial personalities tended to be NTs more often. As well, the P is mostly higher than the J (Reynierse, 1997). Studies showed the most entrepreneurial types are: ESFP, ESTP, ENTP, ENFP, INTP, ISTP. This displays that each entrepreneurial is a perceiving type that is trying out new things, adapting to situation and are acting by watching.

But, the test receives some criticism by showing the doubt on the reliability. Since the test acts upon four different scales – as presented above – it might be that candidates receive a different outcome from time to time (Pittenger, 1993).

2.1.3 Homogeneous vs. Heterogeneous

In the prior two sections the visible and non-‐visible diversity of teams have been discussed. Now it is the time to find more support concerning this topic and establish an outline. In table 1 an overview is given concerning the desirability to diversity based on the finding of Milliksen et al. (1996).

This author makes a distinction between the short-‐term and the long-‐term consequences of diversity. The focus for our diversity will be mainly on the long-‐term consequences within a team composition. Since we are looking at the process of a team instead of a certain moment in time. These are long-‐term consequences are: individual consequences (absenteeism, deviant behaviour, performance and turnover), group behaviour (turnover and performance) and organizational behaviour (turnover, performance and strategic changes). As shown in the table some diversity dimensions support heterogeneous, where others require a homogeneous approach.

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DIMENSION DESIRED EFFECT (HOMOGENEOUS/ HETEROGENEOUS)

REASONING

VISIBLE DIVERSITY

Race/Ethnic Heterogeneous Both sides find support in the literature. However, as mentioned in section 2.1.1.2 the heterogeneous diversity will be expected to have a more positive impact on the team.

Reasons support homogeneousness

-‐ More psychologically committed when racial or ethical background is similar

-‐ Creates positive effect on emotional responses Reasons support heterogeneousness

-‐ Better cooperation -‐ Higher quality of ideas -‐ Higher level of creativity

Age Homogenous Heterogeneous diversity tends to result in a higher level of turnover amongst the employees; something a start-‐up tries to avoid the spill of important and scare knowledge.

Gender Heterogeneous First of all, men tend to be more effected in a negative manner if they belong to the minority gender of the company. On the other side, are women more likely to be absent and is a higher level of turnover measured amongst them. Overall, the combination of men and women creates a higher level of creativity and productivity. Therefore, the idea situation of a team will be a group with merely men, but not solely.

NON-‐VISIBLE DIVERSITY

Skills and abilities Homogeneous Difference in level or type of education tends to create a higher turnover level.

Industry experience Homogeneous Research showed that heterogeneous experience leads to a higher level of turnover, due to the feeling the members are missing out on something

Different personality characteristics and values

Heterogeneous Homogeneousness leads to commitment and satisfaction of the employee. However, performance does not seem supporting in this case. And, Milliksen stated that if people are different according to the Hofstede dimensions (power distance and collectivism) they faced negative discrimination more often. Table 1: heterogeneous or homogeneous team composition

2.2 TEAMWORK

Now we have discussed the team composition it is time to take a closer look at the teamwork a team conduct. We found that teamwork became a topic that received more and more attention during the past years. Not only due to the growing complexity of technology, but as well due to

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the increasing global competition and the growing awareness of internal coordination and scaling down of redundancies the teams are facing (Chatman et al., 2005). Teamwork highly affects the exchange of knowledge and the individual contribution of each team member. Therefore, one key success element of a start-‐up can be devoted on the relationship among individuals within the team. Creating strong relationships at the workplace will lead to stabilization of essential routines. As a consequence, teamwork plays a substantial part in creating skills and experiences amidst the team members.

Even though it is proven that it is hard to validate excellent teamwork, members must be able to get along to deliver good teamwork (Mathieu, Heffner, Goodwin, Cannon-‐Bowers, 2000). The same author proved successful teams most surely are teams in which each team member has true concern for one other and has a collective commitment towards the tasks. In our literature review, the focus is on four important drivers for great teamwork: The (1) corporate culture, (2) communication, (3) helping-‐behaviour and (4) decision-‐making.

2.2.1 Corporate Culture

Chatman et al. (2005) discussed the matching personal dispositions of team members and the cultural values within a team as an important factor to cooperative behaviour. As mentioned by these authors “it is found that people who were more dispositional cooperative were more responsive to situational norms for cooperation than those who were less cooperative”. An operational corporate culture is seen as a sort of social control that engages when team members of a certain group or organization have the same values and expectations about convenient behaviour. Acceptance among colleagues can be achieved when members advocate strong cultural values. On one hand we have the employees with high individualism prioritize their individual goals. And on the other hand those who emphasize collectivism. Here, the importance of collective goals and achievements is playing a crucial role. For teamwork it is proven that a collective culture is stimulating and improving the collective accomplishments and the cooperative behaviour (Charman et al., 2015; Bettenhausen, 1991).

2.2.2 Communication

Harvard Business Review devoted an entire issue in 2012 concerning teamwork. One of the most refreshing topics was the research that informed that high performing teams are those who are characterized by energy and engagement among each other. Even more important, to achieve this communication was the silent driver (Pentland, 2012).

With energy the author refer to the informal contribution of the entire team. Each team has a certain total amount of team energy. As a consequence each person contributes a certain and often a different amount of informal energy to their group/team. When a person adds a high

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level of informal energy it is contributing to the team at a high level. Where others might contribute zero. In a group of 10 members it could be the case that four team members are contributing a lot, and herewith they form “a team within a team”. Which gives the “out-‐siders” the feeling they have less or nothing to say. Repeatedly, managers or leaders are shocked to discover how they are dominating the group by being so high in energy after investigation. To overcome this problem it will be from great importance to share a map and discuss the outcomes with the team. Ideal would be a situation where each team member delivers the same amount of energy. Franke et al. (2008) support this idea by introducing the social identity theory. This theory states how important it is for people to have to feeling to belong to a certain group. A person receives a positive feeling when this in such a situation. Secondly, engagement refers to the manner of communication from team member to team member. Here, people with a high level of energy regularly engage on a high level as well. The engagement can be found at the “the team within the team” instead at the team as whole. Which results in lower performance, due to the lack of information from all members.

2.2.3 Team Helping Behavior

Liang, Shih & Chiang (2015) focuses on another aspect of teamwork. Namely helping behaviour by team members. This type is noticeable for the interpersonal, cooperative and extra-‐role behaviour attitude towards other members. Even though helping behaviour can not be set as a guideline for job requirements, and you probably will not get rewarded for it either, a team member has to decide it will go beyond its own task to help another team-‐member. When team members are willing to engage and help their team it will lead to a higher level of team effectiveness. Prior studies showed that is will positively affect the team members’ attitudes, motivation and behaviour. Especially, towards collective achievements that has to be fulfilled at team-‐level. Does this team helping behaviour hold if the size of the team increases?

2.2.4 Decision Making

However, Molleman (2005) stressed the importance of team autonomy; which means that the founder gives the team the freedom to make decisions on their own concerning the goals and with which methods and planning those are going to be achieved. Even though the team will become a little less structured by doing this, it will lead to a higher level of functioning. For the research it will be interesting to discuss on which level decision-‐making is done on daily basis. We assume that decision-‐making on strategic level is done by the founder(s). However, it can be interesting to show how general decision-‐making is accomplished.

Finally, it is worth mentioning that team size matters when talking about teamwork. Hoegl (2005) stressed that smaller teams generally demonstrate better teamwork and operating in a

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more effective manner. As well, the team collaboration, social loafing, and effective and efficiency team completion are in general higher in smaller teams. Therefore, we assume that when the team is growing the efficiency of teamwork will be reduced. Will this mean that the input of communication will get more differ when the team grows? As well, corporate culture is likely to undergo some changes. There are many factors influencing this culture. In the findings the focus is going to be on which factors are important and how these factors have been changing during the process of establishing a team. Also, it will be highly certain the willingness to helping other team members is going to drop down as the team expands. Along with fact decision-‐making is going to shift from solely the founders towards the team as whole.

2.3 TEAM DEVELOPMENT PROCESS

The step from a start-‐up team to towards a team within a small enterprise is very critical and has an impressive impact of the duration and success of the firm (Clarysse et al., 2004). The literature provided by entrepreneurship journals has not extensively handled the topic on teams during growth during business. The models that are available are focusing on team development and the stages these teams undergo in teams that are established under certain circumstances or at a certain point in time. In this upcoming section the model of Tuckman (1965) is going to be introduced. This author created the model back in 1965 by describing sequence steps small groups make. Based on the analysis of fifty different group developments, Tuckman was able to detect five stages of development within a team, as shown in figure 1.

The early model consists of the following four steps: forming, storming, norming and performing. The process starts with the forming stage. Here, the group becomes familiar with the duties that come along with the job, ground rules are set and boundaries interpersonal and task behaviour are tested. As well, it becomes important to build relationships with the founders. Plus, in this stage organizational standards are slowly created.

The second stage is storming. Distinctive is lack of unity and the polarization around interpersonal issues. During this period team members dislike moving towards new areas of interpersonal relations and prefer the establishment of security. Or as Tuckman (1965) quoted; “group members become hostile toward one another and toward a therapist or trainer as a means of expressing their individuality and resisting the formation of group structure”.

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Figure1: Tuckmans' team development stages

Thirdly, the norming phase was implemented to develop adherence within the group. Recognized by the fact that team members retain acceptance concerning their personal opinion. Furthermore, each team member has certain roles and norms allocated. Most importance is the creation of an entity feeling. As a result, task conflicts are often avoided to keep a certain level of harmony inside the team.

Performing was the final stage of the first model Tuckman introduced. Here, the group is functioning as a “problem-‐solving instrument”. Because all team members are adapted to the situation and have clarified the role they play within the team. One keyword in this phase is structure. All tasks are obvious. And herewith, each member is flexible and functional in his or her position, which leads to no wasted energy on indistinctness.

Tuckman revised the model by adding a new final phase stage, adjourning, in 1977. In this phase a person that does not undergoes the previous steps as desired is separated from the team (Bonebright, 2010). This step is an important issue and influences the group as whole as well.

The model will be a solid focusing point to discover the development of the team. Nonetheless, this model has some limitations that need to be taken into account. For our research, the most considerable pitfall is that is seeing the creation of teams as a closed process (Bonebright, 2010). Where in the research new team members are added to the team on regular bases. A solution to this will be to discuss and focus on stage two, three and four. And in which manner they adapt to

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the situations over time. In line with this is the lack of explanation on how groups change over time (Rickards and Moger, 2000). Meaning the model fails to address the results of team development on creativity in problem solving. As well, the development stage model is not taking the probability into account of performing on outstanding bases. These raised two questions by Bonebright (2010): what is the storming phase a never ending phase? And what are the circumstances under which the performance norm is achieved?

The theory of team development stages can be used to explain the circumstances under which a team is formed and has transformed. Unfortunately, a model that is perfectly suited to the situation of transforming from a start-‐up towards a small enterprise is not available in the current literature. Our study could form a starting point for this research gap, since we are discovering if we can detect these phases within a start-‐up as well, and how they develop over time.

2.4 THE FOUNDERS

Clearly the founder(s) of a firm will are playing a critical role in the success of the business. When looking at a successful start-‐up it been proven that firms are more often managed by a team, rather then a sole entrepreneur (Klotz, Hmielseki, Bradly & Busenitz, 2014), and therefore we talk about the founders in this section instead of a sole founder. The personality and the characteristics of such a founders can very often explain why a business succeeded or failed (Elmuti, Khoury & Abdul-‐Rahim, 2011). Therefore, focus in this section is devoted to the entrepreneurial personality and characteristics, his or her experience/background and bias of handling a business (effectuation versus causation).

2.4.1 Entrepreneurial Personality and Characteristics of Founders

Myers-‐Briggs personality traits has been studied by multiple authors to establish a relation between the entrepreneurial personality and the function a person takes within their working life’s as mentioned before. As mentioned before, research showed that entrepreneurs are often having the P (perceiving) aspect in their personality. Which means that they are interested in acting by watching, are existed about trying out or adapting new things and are spontaneous (Carland et al., 1992). Interesting to mention is the difference between an entrepreneur and a manager (Allinson, Chell & Hayes., 2015). A prototypical “entrepreneur” is focusing on the big, strategically picture while often still managing the business. Here, there still should be a certain focus towards expending the business and driving change.

Accessory, entrepreneurs are anticipating and seeking for new opportunities where others might see confusion, chaos or uncertainty. Vyakarnam, Jacobs and Handelberg (1999)