Studies on Innovative Practices
Edited by Mattias Elg, Per- Erik Ellström, Magnus Klofsten and Malin Tillmar
Chapter 13: Organizational formalization in new high-tech ventures – a dual-actor process
Formal organizational characteristics like structures or routines are important dimensions for understanding contextual conditions and other challenges facing managers who pursue intentional organizational change for increased efficiency in established firms (Armenakis and Bedeian, 1999). In new ventures, formal organizational characteristics are interesting for additional reasons, that is, as enablers for growth and establishment (Gilbert and McDougall, 2006; Davis et al., 2009). Entrepreneurial studies have shown both performance advantages and enhanced survival related to the early creation of formal organizational structures (Hannan et al., 2000; Burton, 2001; Sine et al., 2006). Based on the entrepreneurs’ initial employment models these studies indicate reduced uncertainty among internal and external actors, more efficient use of resources and other advantages gained. Despite these results the scientific and practical discourses on organizational design tend to characterize young firms as non-bureaucratic and innovative due to its informality (Mintzberg, 1973), simply operating based on an emergent strategy (Burton et al., 2011). This is a notion also reflected in the literature where high-tech venturing is concerned (Henderson and Clark, 1990).
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