Systems Leadership Theory: Addressing Start-up Issues During a Scale-up Process

Abstract

Research into start-ups is a prominent area of study at present. The large number of start-ups and the many important innovations that have arisen out of them are a testament to the importance of research into the large percentage of start-ups that fail. A specific focus within this area of research that has not been explored extensively is the issues that start-ups experience when they attempt to scale up their business, and the large number that fail to do so. The present thesis seeks to identify issues that occur within start-ups during this stage of growth that are caused by internal aspects of the organisation rather than external factors. Once these issues are identified, the thesis aims to analyse the frameworks of systems leadership theory to determine whether it could apply to start-ups in regards to these issues. These aims result in the following research question: To what extent can systems leadership theory be applied in the context of start-ups to help them deal with the internally generated issues that arise during a scale-up process? In order to answer this research question, the paper employs a semi-theoretical approach through an analysis of existing literature on the issues that start-ups experience when scaling up, as well as case studies where these issues have occurred. The thesis also utilises minor empirical tests through the use of two separate surveys, one to collect data on the issues identified and one to gather data from systems leadership theory experts to contribute to the analysis of the theory’s viability. By combining these approaches of collecting data, the paper identifies three themes of issues that start-ups experience when scaling-up and classifies them as issues within: clarity of work, organisational structure, and management by objectives. The applicability of systems leadership theory for addressing these themes is assessed and it is found to be applicable for all three of them. Although limitations in the paper are identified, the paper concludes that the findings of the thesis are a solid proof of concept for the use of systems leadership theory in the context of start-ups and that future research is suggested to identify in more detail how the theory could be implemented.