Misfit and Milestones: Structural Elaboration and Capability Reinforcement in the Evolution of Entrepreneurial Top Management Teams
Authors: Ferguson, A.J., ,听Burton, M.D.,听Beckman, C.M.
Publication: Academy of Management Journal聽
Abstract:听
We examine how 鈥渢op management team (TMT) misfit,鈥� or discrepancies between the TMT鈥檚 functional roles and the qualifications of the managers who fill those roles, affects the evolution of TMT composition and structure in a longitudinal study of entrepreneurial ventures. We distinguish two types of misfit鈥攐verqualification and underqualification鈥攁nd study how each is associated with TMT changes. We further consider the moderating effect of firm development. Results reveal that underqualified TMTs hire new managers to reinforce existing capabilities whereas overqualified TMTs elaborate their role structures. However, achieving developmental milestones (i.e., obtaining venture capital funding and staging an initial public offering) is a critical contingency to TMT change: absent these milestones, firms neither hire new managers nor add roles, even when they seemingly need to do so. These findings contribute to knowledge of how TMTs and new ventures evolve by underscoring the importance of simultaneously attending to TMT composition and structure.