In this research, we will analyze a decision making model that relates to successful team ventures. At the idea stage of a team venture, one of two processes is assumed to occur. An individual may get an inspiration for a new venture by recognizing a market’s unmet need (also known as an opportunity). This can be termed the “lead entrepreneur” approach, in which one person gets and processes information, often from members of his or her social network, as well as from personal experience at work, at school, or at home, or from the news media. Most other types of innovation also emerge from such an idea-generation phase (Kamm, 1997, p. 101). The primary decision to be made at this first stage is whether or not to act on this idea for a new venture.
As Scott notes (1991, p. 156), “Organizations do not spontaneously emerge but require the gathering and harnessing of . . . materials, energy, information, and personnel.” The next major set of decisions to be made, therefore, is where these resources will be sought. This is the first step in the implementation stage of a team venture. It addresses how individuals or groups decide to seek a partner or partners to help them supply resources.
The model proposes that there are three likely outcomes from this decision:
- (a) the individual entrepreneur will supply resources;
- (b) the existing group will supply them;
- (c) partners will be sought.
This is a pivotal decision for both individuals and groups. If individuals decide to supply resources themselves and believe for other reasons that partners are unnecessary, they remain solo entrepreneurs and no team is formed.
If a problem-solving view is adopted to explain team ventures, then it can be hypothesized that team members perceive a gap between needed resources or the likelihood of the venture’s failure and their ability or willingness to assume these costs (Bass, 1983, p. 77). This model permits testing of the notions of “bounded rationality” and “satisficing” to learn more about the extent to which team builders adhere to the long-prescribed rule that entrepreneurs should undergo systematic self-assessment prior to starting new firms.
On the other hand, starting a team venture may be less a matter of problem solving and more a matter of preference for individuals or groups whose members either (1) personally value working as a team; or (2) belong to professions (science and engineering, especially), cultures, or some other socializing force where working with one or more partners is highly valued.
A common prescription for creating effective teams is to insure that they are well balanced in terms of members’ functional expertise and “management skills, decision-making styles and experience” (Timmons, 1999, p. 198). This prescription is related to attraction theory; if entrepreneurs follow it, they are attracted to others who possess qualities and competencies very different from their own, but which are needed for starting the envisioned new firm.
Inducements. The model assumes that in some instances prospective partners must be convinced to join entrepreneurial teams. For a variety of reasons, including prior career commitments, family responsibilities, or negative attitudes toward uncertainty, attractive prospects may be hesitant to take the obvious risks of starting a new venture. The promise of future rewards from joint ownership as a way to motivate candidates has received most attention in the entrepreneurship literature.
The model assumes that decision-making authority is a major team maintenance issue, which successful teams address by consciously defining and agreeing upon each member’s role not only on the team but also in the emerging organization. (Kamm, 1997, p. 119) Furthermore, effective teams use their common goal as a primary criterion in making decisions about how to resolve conflicts, such as over the amount of equity to offer as an inducement to a prospective partner.
This model helps us to discover about assembling team ventures will have a number of important effects upon management science in the areas of entrepreneurship and organizational theory, especially decision making and development. It could provide the field of organizational theory with insights about the conception, gestation, and birth of new business firms. Use of this conceptual framework should also contribute to theory building about selection and recruitment decisions as a special case of managerial decision making under conditions of extreme uncertainty. This model may also serve as a foundation for much needed further theory building on entrepreneurial teams.
Bass, B. L. (1993). Organizational decision making. Homewood, IL: Richard D. Irwin, Inc.
Kamm, J. B. (1997). An integrative approach to managing innovation. Lexington, MA: Lexington Books.
Scott, W. R. (1991). Organizations. Englewood Cliffs, NJ: Prentice Hall.
Timmons, J. A. (1999). Careful self-analysis and team assessment can aid entrepreneurs. Harvard Business Review, November-December, 198-206.