Frontiers of Entrepreneurship Research
1997 Edition

SUMMARIES

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THE EVOLUTION OF STRUCTURE AND STRATEGY IN FAST-GROWTH FIRMS FOUNDED BY ENTREPRENEURIAL TEAMS

Thomas M. Cooney
1William D. Bygrave

1Center for Entrepreneurial Studies,
Babson College, Babson Park, MA 02157

Telephone: 1617-239-4567
Fax: 617-239-4178

Principal Topics

A body of research is emerging which indicates that fast-growth firms are more likely to be led by entrepreneurial teams. An entrepreneurial team is defined in this study as "two or more individuals who have a significant financial interest and participate actively in the development of the enterprise". The purpose of this research is to explore the configuration of such organizations (utilizing the Burns and Stalker model of organic / mechanical structures) and the strategies implemented (applying the Mintzberg model of emergent / deliberate strategies) to elucidate on their fruition. The hypothesis is that fast-growth firms led by entrepreneurial teams will employ organic structures coupled with emergent strategies.

Method

The software development industry was selected for the sample population because it is a growth sector in a rapidly changing environment. Firms chosen employ less than 100 people and have been in existence for approximately five years. Three companies were picked randomly and detailed in-depth interviews were held with more than one member of the founding team. This method was considered most apt because of the need to interpret the evolution rather than attempting to quantify the number of firms that may be classified in such a category.

Major Findings/Implications

As the research is currently ongoing final analysis has not yet been formed. Expectations are that given the nature of the research methodology a varied response will be gathered necessitating a panoramic interpretation of the findings.  The primary supposition of this study is that a greater understanding will be developed of how fast-growth firms led by entrepreneurial teams evolve structurally and strategically. What is particularly interesting is the manner in which these firms continually realign themselves as the environment alters. This ability to react to change has been proposed by a number of writers as the principal reason for their success. However, previous research did not examine this position in the context of firms founded by more than one individual.

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