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Differences of Founder Characteristics in High-Tech Spin-Offs. Which factors influence the decision to become a startup-founder?

Bachelor Thesis 2016 41 Pages

Business economics - Investment and Finance

Excerpt

Table of Contents

List of figures

List of tables

List of abbreviations

1 INTRODUCTION

2 HIGH-TECH SPIN-OFFS
2.1 Classification of High-Tech Spin-Offs
2.1.1 Definition of High-Tech
2.1.2 Definition of High-Tech Spin-Offs
2.2 Parent Organization’s Relevance
2.2.1 Setting an Impetus for Entrepreneurship
2.2.2 Power of Reputation
2.3 From Storehouse to Factory of Knowledge

3 FOUNDER CHARACTERISTICS
3.1 Trait Theory
3.1.1 Need for Achievement
3.1.2 Locus-of-Control
3.1.3 Effectuation
3.1.4 Tolerance of Ambiguity
3.2 Socio Cultural Theory
3.2.1 Social Capital
3.2.2 Cultural Capital
3.3 Human Capital
3.4 Entrepreneurial Human Capital

4 EMPIRICAL RESEARCH
4.1 Methodology
4.2 Descriptive Analysis
4.2.1 Demographic Characteristics
4.2.2 Venture Characteristics
4.2.3 Entrepreneurial Characteristics
4.2.4 The average High-Tech Spin-Off Founder
4.3 Discussion
4.3.1 Impact of Self-Efficacy on Perceived Success
4.3.2 Impact of Previous Founding Experience on Perceived Success
4.3.3 Impact of Human Capital on Perceived Success

5 CONCLUSION

References

List of figures

Figure 1: Strategies for Decision-Making

Figure 2: Culture's Association with Entrepreneurship

List of tables

Table 1: Level 2 Variables - Level of Education, Gender and Age Range

Table 2: Level 1 Variables - Lifecycle and Perceived Success

Table 3: Moderator Variables - Founding Experience and Self-Efficacy

Table 4: Impact of Self-Efficacy on Perceived Success - by Gender

Table 5: Impact of Founding Experience on Perceived Success - by Gender

Table 6: Impact of Founding Experience on Perceived Success - by Education

List of abbreviations

illustration not visible in this excerpt

1 INTRODUCTION

The world we live in is a complex, yet fascinating one. Taking a look back down the line of evolution leaves us impressed by the uncountable achievements mankind has reached through knowledge, work, vision and action. Despite the same original conditions for all countries and their economies around the world, some selected economies such as the United States of America and Germany have managed to develop in a more sophisticated way and thus enjoy a higher standard of living than emerging economies such as India or Vietnam currently do. These successful economies have managed to set the path for constant growth in their “Gross Domestic Product (GDP)” through a highly educated labor force, low rates of unemployment, innovation and sustainable political decisions to promote and enable such development. Those more developed countries build their strength upon a knowledge-intensive economy and face different issues than agriculture- or labor-intensive economies do to stick to the growth path. Through centuries of development on both personal and economic levels, successful economies have achieved the best-in class status in diverse areas. Research-intensive industries such as automotive, chemicals and machinery are undoubtedly perceived as high-quality German engineering. Products engineered and manufactured within these industries have boosted Germany’s rise to become one of the wealthiest and most influential economies in our globalized world.

Technological advancement means change. Adapting to these changes through new products and new business models is key to creating jobs, maintaining a high rate of employment and thus to conserve and increase a nation’s wealth. Companies in Germany and the US have managed to successfully adapt to changes within the past centuries and have triggered them through a large number of innovations themselves. Since the expansive growth of the internet the term innovation has been so frequently used that people don’t fully appreciate the work invested by people, institutions and processes behind those innovations. Innovations do not pop up out of nowhere. Primarily innovations are a result of individuals within an institution which facilitates the creation of yet unknown concepts based on knowledge and organization.

This thesis focuses on individuals who have chosen to research and develop their innovations as academics at universities and commercialize them in the private sector through newly formed companies, so called “high-tech spin-offs (HTSO)” or academic spin-offs. The importance of such research institutions and their innovations has been acknowledged by 21st century policy makers in Germany, as they are searching for ways to secure the nations’ wealth by remaining economically competitive through key positions in high-technology. Politicians have recognized the potential embodied in technology. HTSOs have shifted into political awareness. The “Bundesministerium für Bildung und Forschung (BMBF)” has launched a roadmap highlighting the highest prioritized future projects within the next 10 to 15 years which are crucial to continue the economic development.[1] The roadmap paints a clear picture of how important it will be to invent key technologies in sectors such as energy, health, mobility, security and communication. The BMBF appoints a crucial function to high-tech spin-offs as they possess academic knowledge to invent key-technologies and commercialize it through a newly established company. Positive effects like job creation, new sources of tax income and the securitization of key technologies within the national economy contribute to the desired overall economic progress.

Chapter 1 will therefore describe the nature of HTSOs, differentiate their nature from non-technology start-ups and further highlight their importance in securing economic progress. After getting an understanding of the topic’s importance to the business community and why exactly such specific foundations are subject of this thesis, the focus in Chapter 2 shifts from an institutional to a personal level.

Just like every nation basically started out with the same original conditions, every human starts its way of life through birth. By that you could assume that everyone is equal. This might be true when facing justice in court, but in reality every person is unique through its characteristics. The result of different events, experiences and actions that have influenced each and every one of us and made us unique in our own way, are my personal motivation for choosing this thesis. Combining the sociocultural, philosophical approach with entrepreneurship and business to research on a personal decision to become self-employed poses a highly interesting issue worth researching.

Chapter 2 will investigate different theories which explain how an individual’s characteristics and personality are shaped throughout the course of life. This is important to get an understanding of the core subject of this thesis, the individuals who have come-up with promising innovations and founded their own spin-off. Research on start-ups and their founders is relatively new compared to traditional fields of studies, but has already contributed remarkable insights into founder characteristics, personality traits of founders and success factors of start-ups in general.

Chapter 3 is dedicated to the empirical section of this thesis, describing the methodology of the survey and conducting a descriptive analysis of the survey findings. In a second step, the results are discussed and elaborated on in more detail.

This thesis specifically tries to understand the differences of founder characteristics of HTSOs. The empirical part focuses on a very general demographic level. To better understand the entrepreneurs as individuals, this thesis takes a step back and also looks into sociological and psychological fields of study within the literature review section (Chapter 3). By doing so, we can create an understanding of personality traits which might not be directly related to economic studies, but indirectly influence behaviors and the decision-making process of entrepreneurs. Its goal is to elaborate on founder characteristics for a specifically selected group of businesses in order to gain deeper insights into entrepreneurs and who they are, which set of characteristics HTSO founders share in common and how certain characteristics affect outcomes.

2 HIGH-TECH SPIN-OFFS

2.1 Classification of High-Tech Spin-Offs

2.1.1 Definition of High-Tech

Before commencing, any uncertainty concerning the term “high-tech” needs to be resolved. According to a definition published by the “Zentrum für Europäische Wirtschaftsforschung (ZEW)”, “high-tech involves technologies which are currently the most cutting-edge and thus are a major driver for technical progress.”[2] Rather than describing a specific set of technologies, the definition shifts over time, depending on progress and new findings in research on technology. “It is closely related to the concept of radical innovation [by Schumpeter]; new technologies and products which break new ground and therefore disrupt whole markets as well as change the competitive environment.”[3] To close the gap between the overall economic progress and wealth of sovereign nations, which was covered in the introduction, companies offering high-tech products or services are thought to contribute to innovation, growth, employment in knowledge-intensive economies. In a working paper issued by the “Organization for Economic Co-operation and Development (OECD)”, HATZICHRONOGLOU (1997) states that “firms which are technology-intensive innovate more, win new markets, use available resources more productively and generally offer higher remuneration to the people that they employ. High-technology industries are those expanding most strongly in international trade and their dynamism helps to improve performance in other sectors (spillover).”[4] Their chances are seen in pioneering technology fields and developing new industries.

To summarize, high-tech industries and especially firms comprising those industries are key to securing competitive sustainability of knowledge-intensive economies. The BMBF appoints a crucial role to having a leading position in selected high-tech industries in its high-tech strategy 2020 report. These are Bio- & Nanotech, Materials Science, Aerospace and IT to name only a few. In order to achieve the highest possible economic value added, the ministry has clearly recognized that the utility of these technologies or new scientific findings highly depends on their translation from research results into economic activity, thus on the transfer from research-institutions to commercialization in the private sector.[5]

2.1.2 Definition of High-Tech Spin-Offs

That’s where the importance of HTSOs comes into play. Like PIRNAY/SULEMONT (2003) put it, high-tech spin-offs are “new firms created to exploit commercially some knowledge, technology or research results developed within a university.”[6] The exploitation is achieved through the formation of a new venture by scientists or graduates, who have been actively involved in the research process.

They are individuals who decide to become unemployed – “they found a startup [ as ] an institution designed to deliver a new product or service under conditions of extreme uncertainty.“[7] Handling this extreme uncertainty is what entrepreneurs are meant to do. Who would choose risk in favor of safe alternatives and which determinants differentiate excellent uncertainty-handlers from the ones who despite the desire to leap, eventually fail?

When defining academic high-tech spin-offs it would be wrong to define a time which must not elapse between leaving the institution and becoming a founder, as EGELN/GOTTSCHALK/RAMMER (2003) show, that substantial technology transfer from academia can take place even years after a founder has left university.[8]

NICOLAOU/BIRLEY (2003) go a little more into detail and demand a personnel transfer of the inventor academics who may or may not be currently affiliated with the academic institution in addition to the transfer of core technology.[9] For the purpose of this study, it is sufficient to speak of a university high-tech spin-off when both following characteristics are existent:

- A transfer of personnel (spin-off founder(s)) from the parent organization (university) to a newly formed venture (spin-off)[10]
- A transfer of technology or innovative ideas (intellectual property), which are created within and extracted from the parent organization and commercially developed in the new venture

To differentiate the above mentioned university high-tech spin-offs from others like corporate spin-offs, the transferred intellectual property does not need to be protected by intellectual property rights in order to be of relevance for this study.[11] Furthermore, the parent organization’s nature differentiates university spin-offs from other newly created ventures. As their name already reveals, university spin-offs are backed by an academic institution, corporate spin-offs by corporations. In this study, another form of venture creation, so called “start-ups”, are defined as independent ventures not backed by any parent organization. Another attribute to differentiate start-ups from HTSOs is the duration of the “Research and Development (R&D)” cycle until a first prototype is manufactured. HTSOs usually encounter a long R&D period with high deployment of personnel and financial resources without generating any noteworthy revenues.[12] Compared to non-high-tech start-ups, this characteristic is mostly due to the high-technology nature of products and services which are being developed within spin-offs.

Throughout this thesis university high-tech spin-offs, high-tech spin-offs and academic spin-offs will be used synonymously. The individuals who found these HTSO are referred to as founders or entrepreneurs synonymously.

2.2 Parent Organization’s Relevance

Universities are modern society’s producers of intellectual property, as they engage in basic research, a very costly step for corporations in the economy. In terms of university spin-offs, they are the originators of the spin-off formation process. They enable new intellectual property to be created through academics by setting the environmental determinants. Historically, universities have been mainly focused on their main two missions: basic research and teaching. Policy makers and TIETZ (2013) have recognized that universities need to pursue a third mission: transfer of research findings or in other terms – transfer of technology.[13] By transferring findings from basic research activities into economic activity, their potential can unfold and be exploited more effectively. By doing so, universities’ value contributed to the economy not only increases, but rather academic institutions positively support their attempts to maximize spillovers from basic research into practice.[14] To assess the relevance of research findings in practice, universities depend on accurate feedback given by practical appliers of their research findings.[15] Universities are also an important factor of the success of a spin-off company as it usually receives support from its parent organization. This support is often provided by the university in form of access to infrastructure such as laboratory facilities or office space and access to academic personnel such as secretaries or other members of staff.

2.2.1 Setting an Impetus for Entrepreneurship

HEMER/SCHLEINKOFER/GÖTHNER (2006) conducted empirical research on academic spin-offs in Germany and their success determining factors. Within their study they found empirical evidence of how the parent organization is valuable to spin-offs and founders alike. Besides facilitating access to infrastructure and personnel resources as primary factor, they highlight one specific aspect which can spark the entrepreneurial intent within a person. This aspect describes a very personal level of characteristics associated with employees at academic institutions. They found that in most cases the academic environment represented by individuals and their attitude towards entrepreneurship sets the impetus for entrepreneurial opportunity recognition. It sensitizes potential founders to commercialize a research result in the private sector.[16]

This open-minded environment in universities combined with personal commitment of the founder itself sets the path to founding a spin-off. The observed behavior logically explains another role of parent organizations outlined in the study, one of an institution which is approached for consultation. On average 27% of the interviewed founders have had their business idea technically validated by their parent institution before setting up a company.[17]

2.2.2 Power of Reputation

Apart from operational and personal support, another relevant factor might not be obvious at first glance - the university’s reputation. According to SHAMMA/HASSAN (2009), reputation can be considered as the outcome of the past activity of the organization that has impact on the present behavior of stakeholder groups towards the organization.[18] It is formed throughout decades and centuries, shaped by actions, results and public standing and lies embedded within individuals. In case a university has built itself a solid reputation over the years, people will automatically associate the term excellence with it. It is irrelevant whether the reputation refers to excellence in research, academics or public rankings. A good reputation on a general level positively contributes to the decision making process in favor of one option. Therefore it has impact on how potential customers perceive the newly formed company when the university’s name is associated with it. This can be a key advantage of a spin-off in the start-up phase, when it is predominately confronted with the task of securing its first customers, which are central to a firm’s survival.

2.3 From Storehouse to Factory of Knowledge

The medieval university looked backwards; it professed to be a storehouse of old knowledge. The modern university looks forward, and is a factory of new knowledge”[19]

Not only the spin-off can benefit from its parent organization’s reputation - but this (in)formal relationship yields advantages for universities as well. Apart from the benefits talked about earlier, spinning-off successful ventures which commercialize promising innovations are key to shifting from a storehouse of old knowledge to a factory of new knowledge. This overall trend towards promoting entrepreneurship, more specifically academic entrepreneurship can be observed over the past two decades. The topic entrepreneurship has become socially acceptable; more people have become familiar with the topic itself and aren’t opposed to the idea of becoming self-employed. Successful high-tech start-ups in recent years have sparked a desire in people to pursue their own ideas in form of a company. Universities such as MIT or Munich Institute of Technology have recognized this behavioral trend and have started to implement their own entrepreneurship centers, workshop offerings and incubator programs. These services provide new entrepreneurs with valuable support in early stage phases and eventually contribute positively to the university’s reputation as an entrepreneurial university once former students have pursued their idea and have established a business. The more students using these offerings mean a higher chance of raising a key technology start-up as well as a higher chance of promoting a start-up which will increment technology. The public’s view on a university’s reputation is highly determined by research results, the public and former students and is eventually crucial to a new student’s decision on where to pursue his or her academic education. By assuming the trend towards entrepreneurship will continue universities greatly benefit from promoting start-ups and spinning off companies. It will result in new talents with a focus of interest in this area to be attracted to the institution; it establishes a strong bond between the universities and the company, between academia and the industry. Hence bolstering entrepreneurship, promoting business ideas and excelling in academic entrepreneurship will help universities as the parent organizations of new knowledge to achieve or maintain an excellent reputation, since “it is the most important strategic and valuable asset a company can possess.”[20]

In conclusion the parent organization’s relevance becomes obvious as it fulfills valuable tasks like motivating founders, pathing the way for entrepreneurship and providing consultation services, as well as access to resources. Especially in the stages prior to an official launch of a spin-off, those characteristics partly determine whether the formation of a spin-off is likely to progress or not. Once the hurdle of founding the business is overcome, the entrepreneur shifts into focus as he/she determines the spin-off’s development by decisions he/she makes. Hence, the essential actors in a spin-off are the parent organization and the entrepreneur. After having elaborated on one essential actor, the parent organizations, and their role in academic spin-offs, it is essential to understand the second actor, his/her personal motivation and circumstances which drive academics into becoming entrepreneurs by founding a spin-off.

3 FOUNDER CHARACTERISTICS

Compared to regular start-ups, academic spin-offs seem to have much better conditions to form a company due to the support of their parent organization, which founders of regular start-ups often lack but wish for. The conversion of these seemingly optimal conditions for founding a spin-off into an eventually successful and profitable business heavily relies on the founder and the decision he/she makes as an entrepreneur.

There has been a lot of research on factors and characteristics which successful entrepreneurs must not lack and which determine a start-ups success. The research focus on success-determining factors basically tries to identify a skill-set embedded in an entrepreneur which facilitates success and differentiates winners from losers. The research focus of this thesis tries to deliver insights into drivers of entrepreneurship in academia and whether there is a significant set of characteristics common in spin-off entrepreneurs. Who are these people who more or less choose great uncertainty and risk over secure and safe alternatives when making the decision of becoming self-employed in order to exploit an opportunity?

Amongst others, BARNEY/BUSENITZ (1997) state that entrepreneurs face greater uncertainty than managers of established companies since they cannot rely on neither historical data nor past performance. They are faced with decision-making under uncertainty due to little or no specific market information. Furthermore the market‘s acceptance of their new products or services contains a great amount of uncertainty.[21] So far empirical evidence was not sufficient enough to identify unique characteristics, competencies or traits which trigger and shape the entrepreneurial development process in individuals. The reason might be the complex individuality of any human being - incorporating the impacts of psychological traits and different forms of capital such as social, cultural and human capital. Further shaped by environmental factors, a set of characteristics evolves – forming an individual’s personality - and by deviation, an attitude which can be favorable of entrepreneurship.

In the following, several theories which try to explain favorable factors under which entrepreneurship is most likely to emerge are reviewed.

3.1 Trait Theory

The Trait Theory stems from the field of psychology, focusing on ‘individual differences’ which are identified as ‘traits’ and are believed to be part of the psychological make-up of individuals. Traits cause individuals to behave in particular ways, thus the Trait Theory tries to explain individual behavior through attribution of traits. Applying the Trait Theory to entrepreneurship suggests that some people comprise a specific set of traits that make up their personality and make them more likely to become entrepreneurs.[22] According to this theory there is a set of traits that characterize an entrepreneur and are predictive of entrepreneurial behavior.

3.1.1 Need for Achievement

McCLELLAND (1961) hypothesized that a high need for achievement influences the decision to enter an entrepreneurial occupation. Need for achievement is a trait comprised of the components 1) desire for feedback, 2) taking personal responsibility for decisions and 3) setting goals and achieving them through one’s own effort. The need for achievement characteristic implies a high self-motivation among entrepreneurs, motivating their behavior towards accomplishment. McClelland figured that this unusual motivation to excel in terms of goal accomplishment is the key to entrepreneurial behavior and therefore serves as a good indicator when predicting entrepreneurial behavior.

3.1.2 Locus-of-Control

Apart from achievement-motivation, the ‘locus-of-control’ concept is well acknowledged when determining entrepreneurial personality traits. Locus-of-control was conceptualized by Rotter J. (1954) and refers to the perceived control over the events in life. People with an internal locus-of-control believe to be masters of their own fate and thus can control outcomes themselves.[23] Opposite to mastery of fate, people showing an external locus-of-control believe that outcomes in life result from factors which they cannot control themselves. Several empirical studies found significant proof of internal locus-of-control beliefs in entrepreneurs.

3.1.3 Effectuation

BOWMAN/SEXTON (1985) found the risk-taking propensity of entrepreneurs as a distinguishing characteristic from the general population.[24] Since entrepreneurial activities are primarily associated

Abbildung in dieser Leseprobe nicht enthalten

Figure1: Strategies for Decision-Making[25]

with risk, the general public is tempted to believe that entrepreneurs are high risk takers. In fact, entrepreneurs are rather moderate risk takers, weighing pros and cons before settling for a decision. SARASVATHY/READ/DEW/MILTBANK (2011) take on the moderate risk-taking trait and argue that entrepreneurs overcome situations of Knightian Uncertainty through effectuation. Effectuation is defined as a set of techniques to effectively manage an unpredictable future. This is in stark contrast to another form of reasoning, causality, which assumes a predictable future based on prior events.[26] Sarasvathy et al. argue that entrepreneurs try to avoid an emphasis-on-prediction behavior since prediction is an extrapolative mechanism which solely takes into account past and imperfect information to forecast future events. Such historical information is often not available since the early stages of founding a business and becoming an entrepreneur are characterized by exercise of judgement in an environment, in which opinions (and not scientific knowledge) guide most of the decision-making. KNIGHT (1964) designates such a situation as uncertainty in contrast to risk, where decision making based on scientific knowledge is possible.[27] In order to not having to rely on luck and wishing for all predictions to come true under uncertainty, entrepreneurs rather pursue an emphasis-on-control behavior (see Figure 1). Navigating an uncertain situation through emphasis-on-control is what Sarasvathy et al. describe as effectuation in entrepreneurs. Therefore entrepreneurs do not necessarily possess a personality trait of being extraordinary risk takers, but rather reveal a mentality focused on controlling the uncertainty.

3.1.4 Tolerance of Ambiguity

Another personality trait attributed to entrepreneurs also deals with some sort of uncertainty resulting from situations where information is too complex or incomplete in order to use it as a base for decision-making. The concept of ambiguity-tolerance refers to the way people perceive ambiguous situations - BUDNER (1962) defined it as a continuum with intolerance of ambiguity as the tendency to perceive ambiguous situations as threatening, opposed to tolerance for ambiguity, where ambiguous situations are perceived as desirable. Individuals intolerant of ambiguous situations might make anxious decisions without properly taking into account all available information, whereas persons who are tolerant of ambiguous situations do not show signs of anxiety but rather wait for all necessary information to be available before making a decision.[28]

BOWMAN/SEXTON (1985) conducted a study on differences in personality traits between entrepreneurs and managers and found that “high ambiguity tolerance seems to be a unique component of the entrepreneurial personality.”[29] This seems very intuitive when compared to the other entrepreneurial personality traits like risk-taking propensity and locus-of-control. As any ambiguous situation contains a certain amount of risk, the person making decisions under such circumstances and finding them desirable basically has to be comfortable with risk-taking in some way.

The Trait Theory and its approach of seeing key drivers of entrepreneurial emergence in personality traits and their resulting behavior of individuals certainly yields valuable and mostly empirically validated traits which many entrepreneurs share in common. But as BÜHLER (1999) states in his dissertation on founder characteristics in favor of my personal opinion, entrepreneurs are not a group of individuals who share a homogenous set of traits in common. Rather the heterogeneity of personality traits is a significant characteristic among entrepreneurs.[30] Single personality traits that can be observed in entrepreneurs have been empirically validated in past studies, but the attempt of describing entrepreneurial behavior merely based on personality traits has not been empirically sufficient.[31]

In order to get a more holistic insight into entrepreneurial behavior and founder characteristics, CHELL (1985) suggests taking environmental impacts on entrepreneurial behavior into account. She proposes to rather model behavior as a function of personality traits and socio cultural environment.[32] Predicting someone to become an entrepreneur if he/she is tolerant of ambiguity, shows an internal locus-of-control, has a high need for achievement and on top of that has an effectual manner of controlling uncertainty is not a global formula. Therefore, cultures and social values are too different and too much of an impact on entrepreneurial activity, as the foundation of one’s own business is not always linked to seeking a challenge but rather poses an opportunity to escape unemployment and poverty. To extend our understanding of founder characteristics, we need to look into socio cultural determinants.

3.2 Socio Cultural Theory

The Socio Cultural Theory was first conceptualized by sociologist Max Weber in 1930. Applied to entrepreneurial studies it puts forward the opinion that entrepreneurship is most likely to emerge under a certain socio cultural environment as entrepreneurship is embedded in a social context.[33] A sociocultural environment contains elements of social systems made up of interpersonal relationships which facilitate living together in nations based on social linkages and embedded values, and cultural values, which are intangible elements that are assumed to shape the environment in which business is conducted. These elements concerning actions, thinking and values of an individual are passed on from generation to generation and are believed to influence one’s attitude towards entrepreneurship.[34] In today’s world we can observe that members of a few nationalities (e.g. Turks in Germany, Asians in the US) show a greater propensity towards entrepreneurship than others under certain circumstances (e.g. when migrating to other countries).

Since it has only been observed under these specific circumstances, ALDRICH /ZIMMER (1986) argue that socio cultural values inhibited by these nationalities are rather situational than deterministic conditions for predicting entrepreneurial activity.[35] Nevertheless has the field of socio cultural factors influencing entrepreneurial behavior found great acknowledgment in the past years – and I personally believe that especially in today’s globalized world it is of importance to further evaluate the two main components of the socio cultural theory: social capital and cultural capital.

3.2.1 Social Capital

Social capital does not have a single definition, but the OECD defines it in a simple way as tangible resources which are essential for daily life to live among people and in order to trust each other (e.g. goodwill, fellowship, sympathy, social intercourse).[36]

In short, it focuses on social networks, which by BRASS/KRACKHARDT’s (1999) definition consists of multiple actors, and the linkages among these actors. Social capital in an entrepreneurial context sees social networks as a valuable resource necessary to start one’s own business as an entrepreneur - since missing resources needed for a business foundation (e.g. financial capital, labor) can be accessed through ties with members of the social network.[37] ALDRICH/ZIMMER (1986) see similarities between entrepreneurs and actors who are in the center of a social network. In their research they figure that also social networks relate to the concept of transaction costs. Hence a social network will minimize linkages among each single one of its members and by nature organize in a way, where a central entity or boundary-spanner acts as the core link between all members.[38] Moreover, it is obvious that a central position within any kind of network is also associated with power and authority. This power bearing role of a central actor allows this individual to influence and coordinate members, information and resources within a social network and hence makes him a leader of the group.

Bowman and Sexton see a boundary-spanning role in entrepreneurs because they have to deal with bankers, consultants, customers and suppliers when setting up their business. So basically individuals, who grow up in social environments, where they act as boundary-spanners within a dense social network, are believed to have valuable soft-skills, which an entrepreneur should not lack, and thus can be directly transferred once they set out to become entrepreneurs. These actors possess the skills to engage in the three kinds of categories which a social network encompasses:[39]

- Bonds – are links based on a sense of common identity (e.g. close friend, family)
- Bridges – are links stretching beyond bonds (e.g. distant friend, colleague)
- Linkages – are links to people further up or down the social ladder

In conclusion, social capital facilitates co-operation and helping among people by sharing similar norms and values. Especially in today’s world where networking has become one of the most essential skills in order to secure a job, but more importantly in the entrepreneurial industry where it is essential in order to bring together the right people and technologies to offer a successful product or service. But how do members of social networks know what those social norms and values are - how are they created? Another form of capital, so called cultural capital, evolves around such issues and digs into cultural aspects responsible for the emergence of social norms and values.

3.2.2 Cultural Capital

Arguably the most influential researcher on cultural issues, having developed a whole set of cultural dimensions for different countries around the globe, is Geert Hofstede. HOFSTEDE (2001) defines culture as the “collective programing of the mind that distinguishes the members of one group or category of people from another.”[40]

This programming, as he calls it, is believed to happen at early stages in life and leads to behavioral patterns and hence sets the cultural context.

[...]


[1] See Bundesministerium für Bildung und Forschung (2010), pp. 3f.

[2] Rammer (2011), p. 6.

[3] Rammer (2011), p. 6.

[4] Hatzichronoglou (1997), p. 4.

[5] See Bundesministerium für Bildung und Forschung (2010), p. 9.

[6] Pirnay/Sulemont (2003), p. 357.

[7] See The Lean Startup (2015).

[8] See Egeln/Gottschalk/Rammer (2003), p. 9.

[9] See Nicolaou/Birley (2003), p. 334.

[10] See Cooper (1985), p. 76.

[11] See Shane (2004), p. 6.

[12] See Pleschak/Werner (1998), p. 1.

[13] See Tietz (2013), p. 2f.

[14] See Harhoff/Licht (1996), p. 58.

[15] See Pleschak (2001), p. 63.

[16] See Hemer /Schleinkofer/Göthner (2006), p. 15.

[17] See Hemer/Schleinkofer/Göthner (2006), p. 15.

[18] See Shamma/Hassan (2009), p. 326.

[19] Huxley (1982).

[20] Shamma/Hassan (2009), p. 326.

[21] See Barney/Busenitz (1997), p. 13.

[22] See Chell (2008), p. 4.

[23] See Shapero (1975), p. 133.

[24] See Bowman/Sexton (1985), p. 131.

[25] Modified, Taken from Sarasvathy/Read/Dew/Miltbank (2011), p. 34.

[26] See Sarasvathy/Read/Dew/Miltbank (2011), p. 4.

[27] See Knight (1964), p. 233.

[28] See Budner (1962), p. 29.

[29] Sexton/Bowman (1985), p. 131.

[30] See Bühler (1999), p. 13.

[31] See Sexton/Bowman (1985), p. 136.

[32] See Chell (1985), p. 47.

[33] See Aldrich/Zimmer (1986), p. 8.

[34] See Akhter/Sumi (2014), p. 2.

[35] See Aldrich/Zimmer (1986), p. 8.

[36] See OECD (2007), p. 102.

[37] See Brass/Krackhardt (1999), p. 180.

[38] See Aldrich/Zimmer (1986), pp. 11 f.

[39] See OECD (2007), p. 103.

[40] Hofstede (2001), p. 9.

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Pages
41
Year
2016
ISBN (eBook)
9783668255630
ISBN (Book)
9783668255647
File size
1017 KB
Language
English
Catalog Number
v335596
Institution / College
Technical University of Munich – TUM School of Management
Grade
1,3
Tags
startup entrepreneur entrepreneurship founder spin-off characteristics social capital cultural capital human capital personality traits empirical study Gründer

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Title: Differences of Founder Characteristics in High-Tech Spin-Offs. Which factors influence the decision to become a startup-founder?