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ABSTRACT
Research has yielded accumulated insights that new venture team (NVT) compositional diversity is a driving force behind the NVT success. However, studies have largely examined diversity attributes in isolation and tended to focus on demographic diversity as the primary source of identification separation with a static approach. In this study, we adopted the team faultline perspective to examine the alignment effect of NVTs’ multiple diversity attributes on NVT performance. Meanwhile, we identified entrepreneurial passion as an alternative and affective source of identification, and investigated the joint influence of these two distinct sources of identification on NVT performance across four stages of competition. Our findings indicate that NVT faultline strength is negatively related to team performance; High team entrepreneurial passion (TEP) mean mitigates the negative effect, whereas high TEP focus variety exaggerates the same negative effect. Our study has important implications for the literature on NVT diversity and entrepreneurial passion.
Acknowledgments
We are grateful to the associate editor Professor Susana Santos and the three anonymous reviewers for their constructive comments and suggestions that have helped improve the paper significantly. We also thank Kevin Y. Au in the Department of Management at The Chinese University of Hong Kong for his feedback on earlier versions of this work. An earlier version of this paper was presented at the 2016 Academy of Management Annual Meeting.
Disclosure statement
No potential conflict of interest was reported by the authors.
Supplementary material
Supplemental data for this article is available online at https://doi.org/10.1080/00472778.2021.2010086.
Notes
1 Gender, age, and nationality have high cognitive accessibility in our research context, because these characteristics are easy to observe and been used to categorize others by participants (Harrison et al., Citation2002).
2 Location of study is a salient attribute with high normative fit in our research context. This study was conducted in Hong Kong, an international city whose attractions have encouraged many international entrepreneurs to launch businesses there (43% founders in 2015; 35% founders in 2016, Hong Kong’s Startup Ecosystem Report) and has many residents educated in overseas institutions. Study locations reflect individuals’ experience in diverse cultures and business practices and, therefore, exhibit a high normative fit in Hong Kong NVTs.
3 Employment status, including self-employed entrepreneurs, university students, and full-time employees, has high normative fit in our research context, because it signifies the time and effort that individuals are willing to invest in the NVT (Foo et al., Citation2005; Gielnik et al., Citation2015).
4 An integrative review on NVTs from Knight et al. (Citation2020) proposed and demonstrated that NVTs are not a single type of team; rather, they manifest in many different ways and we could use three dimensions to locate an NVT, including ownership of equity, autonomy of strategic decision-making, and entitativity. In our study, the participating teams were low on ownership of equity, high on autonomy of strategic decision-making, and high on entitativity. NVTs high on all three dimensions are an archetypical manifestation in the multidimensional construct space, and teams in our study represent legitimate data points within that space as well. Therefore, theoretically, NVTs in our sample are representative.