Variation in Organizational Practices: Are Startups Really Different?

Maryann P. Feldman*, Serden Ozcan, Toke Reichstein

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The idea that new ventures are simple mimetic reflections of the organizational practices of existing organizations contradicts the recognized importance of organizational diversity for innovation. There is an inherent contradiction in the literature between the persistence implied by the inheritance of practices from prior employment, and the experimentation prevalent in the organizational practices contributed by new organizations. This paper first accounts for mechanisms that may drive heritage of practices from parent organizations to their spawns. It then sets out to explore mechanisms that may cause a lower degree of diversity in applied practices among established organizations, and lastly, the conditions that may cause a greater degree of diversity among practice combinations of startups. The reviewed mechanisms suggest that the distribution of organizational and strategic practices among established organizations and startups to be somewhat dissimilar, and that startups significantly contribute to the variation in organizational practices. Using a sample set of Danish organizations, we find evidence of greater diversity in organizational practices among newer organizations, while established organizations are more likely to converge on a set of similar practices. Our results further indicate that strategic disagreements between the entrepreneur and their prior employer are associated with greater differences in strategic orientation. A distinction between strategic and HRM practices provides additional insights.
Original languageEnglish
JournalJournal of Evolutionary Economics
Number of pages31
ISSN0936-9937
DOIs
Publication statusPublished - 25 Oct 2020

Bibliographical note

Epub ahead of print. Published online: 25 October 2020.

Keywords

  • Entrepreneurship
  • Newfirms
  • Startups
  • Corporate culture
  • Diversity

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