[PDF] The organizational design of high-tech startups and product innovation

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Dis cus si on Paper No. ??-???

The Organizational Design

of High-Tech Startups and Product Innovation

Christoph Grimpe, Martin Murmann,

and Wolfgang Sofka

Dis cus si on Paper No. ??-? ??

The Organizational Design

of High-Tech Startups and Product Innovation

Christoph Grimpe, Martin Murmann,

and Wolfgang Sofka

Die Dis

cus si on Pape rs die lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZE der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. 1 The

Abstract

We investigate whether appointing a middle

performance. Additional hierarchical levels are often suspected to restrict innovative activi- usually strongly limited on a sample of German high 2

I. INTRODUCTION

Launching

ter managing competing formation processing capacity as 3 et al. 4 for R&D decision making is not limited to 5

II. THEORY AND

New technologies have

nt level 6 , 1990 7

Hypotheses

Startup decision making is typically dominated by the founder 8 , 1999 , 2006 9 introducing middle managers can be extended to i its offering vis Hypothesis 1: Startups with middle management are more likely to introduce

Existing

technologic innovate ( technologies ( 10 more predictable because it enables a better understanding of the requirements that need to be ble knowledge elements that may not have been obvious to the founder. In sum, our second Hypothesis 2: Startups with middle management are more likely to ex-

Apart from

existing knowledge, we argue that middle managem s 11 not invented here syndrome) ( founders 12 Hypothesis 3: Startups with middle management

R&D personnel.

Finally,

Miller

opportunity 13 Hypothesis 4a: Startups with middle management are more likely to introduce personnel is stronger for risky business opportunities. Conversely, startups with comparatively less risky business opportunities benefit Hypothesis 4b: Startups with middle management are more likely to introduce

III. DATA

We construct a dedicated dataset combining multiple data sources to test our hypotheses. It s and ths larg- s largest credit rating agen- 14 , 2014 s formation, (ii) the indus- 1 1 15 2

2 ---

16

Variables

Dependent

Our hypotheses predict the likelih

Explanatory

Our main variables of interest on the right

the size of the existing knowledge stock of a firm, 3 ployees by summing up those employees that have occupation codes 4 3 - 4 17 er(s) of a firm held prior to the registration of the firm. We retrieve this information from the founders had tertiary education as well as the share of employees with tertiary education. 18 ncorporated (limited liability). We further add three industry

Estimation

Since our depe

Dis cus si on Paper No. ??-???

The Organizational Design

of High-Tech Startups and Product Innovation

Christoph Grimpe, Martin Murmann,

and Wolfgang Sofka

Dis cus si on Paper No. ??-? ??

The Organizational Design

of High-Tech Startups and Product Innovation

Christoph Grimpe, Martin Murmann,

and Wolfgang Sofka

Die Dis

cus si on Pape rs die lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZE der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. 1 The

Abstract

We investigate whether appointing a middle

performance. Additional hierarchical levels are often suspected to restrict innovative activi- usually strongly limited on a sample of German high 2

I. INTRODUCTION

Launching

ter managing competing formation processing capacity as 3 et al. 4 for R&D decision making is not limited to 5

II. THEORY AND

New technologies have

nt level 6 , 1990 7

Hypotheses

Startup decision making is typically dominated by the founder 8 , 1999 , 2006 9 introducing middle managers can be extended to i its offering vis Hypothesis 1: Startups with middle management are more likely to introduce

Existing

technologic innovate ( technologies ( 10 more predictable because it enables a better understanding of the requirements that need to be ble knowledge elements that may not have been obvious to the founder. In sum, our second Hypothesis 2: Startups with middle management are more likely to ex-

Apart from

existing knowledge, we argue that middle managem s 11 not invented here syndrome) ( founders 12 Hypothesis 3: Startups with middle management

R&D personnel.

Finally,

Miller

opportunity 13 Hypothesis 4a: Startups with middle management are more likely to introduce personnel is stronger for risky business opportunities. Conversely, startups with comparatively less risky business opportunities benefit Hypothesis 4b: Startups with middle management are more likely to introduce

III. DATA

We construct a dedicated dataset combining multiple data sources to test our hypotheses. It s and ths larg- s largest credit rating agen- 14 , 2014 s formation, (ii) the indus- 1 1 15 2

2 ---

16

Variables

Dependent

Our hypotheses predict the likelih

Explanatory

Our main variables of interest on the right

the size of the existing knowledge stock of a firm, 3 ployees by summing up those employees that have occupation codes 4 3 - 4 17 er(s) of a firm held prior to the registration of the firm. We retrieve this information from the founders had tertiary education as well as the share of employees with tertiary education. 18 ncorporated (limited liability). We further add three industry

Estimation

Since our depe