Summary article week 2 "How Lead Founder Personality Affects New Venture Performance: The Mediating Role of Team Conflict"
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Course
Startup Psychology (6013B0545Y)
Institution
Universiteit Van Amsterdam (UvA)
Complete summary of the article "How Lead Founder Personality Affects New Venture Performance: The Mediating Role of Team Conflict" by de Jong, Song & Song (2011)
How Lead Founder Personality Affects New Venture Performance: The
Mediating Role of Team Conflict
De Jong, Song and Song (2011)
Introduction
This article discusses how a lead founder's personality affects new venture performance,
with founding team conflict acting as a mediator. The study distinguishes between task
and relationship conflict and investigates the impact of the lead founder's personality on
these types of conflict in the founding team. The study also examines the impact of task
and relationship conflict on new venture performance and considers the mediating role
of conflict in the relationship between the lead founder's personality and new venture
performance. This study contributes to the growing stream of research in the area of
management and entrepreneurship by taking a multilevel perspective to investigate the
impact of microlevel variables on macrolevel new venture performance.
Theoretical Framework
Lead Founder Personality, Conflict in the Founding TMT, and New Venture
Performance: This part discusses the research on the relationship between an
entrepreneur's personality and their job satisfaction, performance, and new venture
outcomes. Studies show mixed results, with some finding indirect effects of personality
traits on performance, while others show direct effects. In new ventures, team conflict is
a significant challenge as founding TMTs (top management teams) tend to be fragmented,
lacking coherence and structure. Therefore, a leader with a strong personality who can
initiate constructive conflict is needed to monitor team discussions about personal issues
and to identify collective goals. The impact of leader personality on TMT interpersonal
processes, such as team conflict, has rarely been investigated in established organizations
and ignored in new ventures. Recent studies in management and entrepreneurship aim
to acquire a better understanding of the relationship between micro-level variables.
Lead Founder Personality Characteristics as Antecedents of Conflict in the
Founding TMT: The study examines five personality traits: openness, neuroticism,
extraversion, agreeableness and conscientiousness, and their impact on task conflict and
relationship conflict in the founding TMT. The study proposes that lead founders with
greater openness are more likely to encourage creative, unconventional behaviors in the
workplace, leading to higher levels of task conflict but lower levels of relationship conflict.
On the other hand, lead founders with higher levels of neuroticism may have devastating
impacts on relationship conflict, while their propensity to experience negative affect and
anxiety may increase team conflict. Extraverted lead founders put a greater emphasis on
communicating their points of view, including task-related issues and at the same time
possess the social skills to decrease relationship conflict. Agreeable lead founders
encourage agreement-seeking behavior and tend to advance a compromise rather than a
confrontation strategy, which should reduce the likelihood of relationship conflict.
Finally, conscientious lead founders likely organize and direct necessary behaviors to
produce targeted outcomes and motivate employees to fulfill their job duties more
diligently and with more effort, decreasing both task and relationship conflict. Therefore:
, - H1 states that lead founder openness relates (a) positively to task conflict in the
founding TMT and (b) negatively to relationship conflict in the founding TMT.
- H2 states that lead founder neuroticism relates (a) negatively to task conflict in
the founding TMT and (b) positively to relationship conflict in the founding TMT.
- H3 states that lead founder extraversion relates (a) positively to task conflict in
the founding TMT and (b) negatively to relationship conflict in the founding TMT.
- H4 states that lead founder agreeableness relates (a) positively to task conflict in
the founding TMT and (b) negatively to relationship conflict in the founding TMT.
- H5 states that Lead founder conscientiousness relates negatively to (a) task
conflict in the founding TMT and (b) relationship conflict in the founding TMT.
The proposed theoretical model is as follows:
Consequences of Conflict in the Founding TMT: The authors suggest that task conflict,
or disagreements over the work at hand, can be beneficial for TMTs dealing with
nonroutine tasks, as it can stimulate thorough information processing and in-depth
decision-making. On the other hand, relationship conflict, or disagreements about
personal issues, can be harmful as it impairs cognitive task performance and inhibits
information processing. The authors propose that task conflict in founding TMTs is
positively related to new venture performance, while relationship conflict is negatively
related. However, sometimes, high levels of task conflict and relationship conflict coexist,
and this can inhibit the positive effect of task conflict. The authors recommend
encouraging task conflict while disallowing relationship conflict to gain the benefits of
conflict without the costs. The text also mentions inconclusive results on the interactive
effects of task and relationship conflict on new venture performance, with some studies
finding no effects while others suggesting that higher relationship conflict impedes the
positive effect of task conflict on firm performance. Therefore:
- H6 states that (a) task conflict in the founding TMT positively relates to new
venture performance, and (b) relationship conflict in the founding TMT negatively
relates to new venture performance.
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