Cultural Diversity in Entrepreneurial Teams: Findings of New Ventures in Germany

DOES CULTURAL DIVERSITY MATTER FOR TEAM PERFORMANCE IN MULTINATIONAL COMPANIES? AN ANALYSIS OF CONFLICT, COMMUNICATION, SOCIAL INTEGRATION, CREATIVITY AND SATISFACTION

Team performance is key in each organisation. Hence, cultural effects in teams are a relevant matter of subject clarifying the ambiguous findings from previous research. With this background, we investigate how the macro-constructs of conflict, communication effectiveness, social integration, creativity and satisfaction interact with cultural diversity on team performance in an environment characterised by a largely homogeneous and ethnic workforce. We test our hypotheses on a sample of firms in Thailand. Our results indicate that creativity and satisfaction have a significant positive impact on team performance whereas cultural diversity has a significant positive impact on influencing conflict in a team-based environment. However, cultural diversity has no significant impact on communication effectiveness and social integration, and it has no significant impact on team performance.

The key theoretical contributions from our study are that cultural diversity can contribute to conflict even in a team composition that is seemingly cohesive and homogeneous in nature. Further, our study establishes that creativity and satisfaction have a positive effect on team performance even in the context of a homogeneous and ethnically majority-based team. For the practitioners, the results of the study indicate that initial actions need to be taken by the leaders of multicultural teams as they create teams to avoid the initial pitfalls due to conflict.

How entrepreneurial team heterogeneity impacts decision-making performance? An input-process-output approach

Purpose

Existing studies mostly rely on the static characteristics of team members, and there is still a lack of empirical investigation on how entrepreneurial team members make decisions through dynamic team process and how team members’ cognition influences team decision-making. The purpose of this study is to validate how entrepreneurial team heterogeneity affects team decision-making performance from the perspective of dynamic team process.

Design/methodology/approach

Drawing on the theory of input-process-output model, this study proposed and examined the mediating role of team interaction as well as the moderating role of proactive socialization tactics in the relationship between entrepreneurial team heterogeneity and decision-making performance. Based on a sample of 162 entrepreneurial teams that include pairing superiors and subordinates, hierarchical regressions and moderated mediation tests were used to test the hypotheses.

Findings

The research results show that the heterogeneity of entrepreneurial teams is positively correlated with both team interaction and decision-making performance. Team interaction plays a mediating role between entrepreneurial team heterogeneity and decision-making performance; information seeking of proactive socialization tactics moderates the impact of entrepreneurial team heterogeneity on team interaction.

Originality/value

Contributing to the literature on entrepreneurial team decision-making performance, this study identifies that proactive socialization tactics with a high level of information seeking can help entrepreneurial team members respond to environmental and organizational changes more effectively during team development and increase the effectiveness of team interaction. This finding helps us better understand the mechanism and context under which entrepreneurial heterogeneity may enhance the team’s decision-making performance.

Entrepreneurial orientation and the interaction of top management team background characteristics

The current study draws on the upper echelons theory to examine the nature of the relationship between top management team (TMT) tenure and a firm's level of entrepreneurial orientation (EO). We find evidence of an inverted-U relationship between TMT tenure and EO using data from firms across three industries with varied industry dynamics. We further introduce a contingency element by demonstrating that TMT industry background heterogeneity moderates the relationship between TMT tenure and EO, where the inverted U-shaped relationship will be more pronounced when the heterogeneity is low and will flatten when the heterogeneity is high. The findings demonstrate the complexity CEOs and governing bodies face while shaping a diverse TMT that can affect EO.

Passion in hybrid entrepreneurship: the impact of entrepreneurial teams and tenure

Purpose

– The purpose of this paper is to draw on the theory of choice overload to examine how entrepreneurial tenure and involvement in entrepreneurial teams influence passion for engaging in entrepreneurship.

Design/methodology/approach

– A survey was administered to 262 Swedish hybrid entrepreneurs, which refers to individuals who engage in entrepreneurship while also maintaining wage work; this arrangement is becoming more and more common in the Nordic economies. Hypotheses proposed associations between the entrepreneurial tenure (the length of engagement in the side business) and entrepreneurial teams (leading the business with one or more team members) with passion for entrepreneurship. Logistic regression was used to test the hypotheses.

Findings

– Results from logistic regression support the hypotheses with three findings: the longer the individual has had the side business, the less likely passion to be the main motive behind entrepreneurship; passion is less likely to be the main motive behind entrepreneurship among those who are part of an entrepreneurial team; and, involvement in an entrepreneurial team strengthens the negative association between entrepreneurial tenure and passion for entrepreneurship.

Research limitations/implications

– The data are limited to the creative sector in Sweden and to the hybrid entrepreneurship context.

Practical implications

– The results support the impact of choice overload and the notions that entrepreneurship passion will decrease the longer the business is up running and if the venturing occurs with another team member. In practice, this means that interventions for re-kindling passion in entrepreneurship should focus on dealing with choice overload under conditions of long-term tenure and team-funded ventures. If entrepreneurs want to maintain high levels of passion, quick and isolated entrepreneurial processes reduce the choice overload that may threaten maintaining a high passion for entrepreneurship.

Originality/value

– This study is the first to apply choice theory to an entrepreneurship context and to find support for possible negative effects of choice overload on passion for entrepreneurship.

MULTI-CULTURAL TEAMS AS SOURCES FOR CREATIVITY AND INNOVATION: THE ROLE OF CULTURAL DIVERSITY ON TEAM PERFORMANCE

Multi-cultural teams are seen as a wellspring of creativity and innovativeness. Yet, we still miss an in-depth study of their potential and challenges during the innovation process in firms. This is a serious omission as many international firms are in need of improving their global innovation position by the inclusion of insights from team members of different nationalities with knowledge about markets and culture. To derive first insights, we conducted a longitudinal qualitative study in a large global company with 70 personal interviews in five innovation teams over a period of two years. These data, based on semi-structured interviews, provide us with rich information about effects of cultural diversity in teams in the innovation process. Data were analysed through a thematic network analysis and two coders inductively forming categories. Results indicate that cross-cultural teams have a high potential of creativity, but are confronted with difficulties arising from different working- and communication styles which have to be proactively managed from the beginning. While progressing, teams learn to cope with this diversity related to some more surface-level cultural dimensions and members even align. Yet, diversity of power distance induces conflicts that deeply impact the innovation process. Based on these findings, we develop a set of propositions, which lead into a conceptual model on the effects of multi-cultural team work on creativity and innovation. Finally, we discuss further implications for research and practice.

Entrepreneurial and management teams: What makes the difference?

The importance of teams has been largely recognized in recent management and entrepreneurship research. This article critically reviews the literature of entrepreneurial and management teams by comparing the key concepts, and the development and foci of research from the SME performance viewpoint in particular. The comparison reveals that entrepreneurial teams differ from management teams, and so the concepts should not be considered interchangeable. Such teams also operate largely in different contexts, however, both having different roles for management and a significant impact on firm performance. Moreover, the review suggests that entrepreneurial and management teams are often groups rather than teams and they are more common than previously believed, though there is much variation in their prevalence by industry sector and firm size.

Cultural determinants of email communication styles

Based on a sample of 234 IT consulting and services professionals from various cultural backgrounds, this study investigates whether Edward T. Hall’s concept of culture can explain cultural differences in email communication. Although a vast array of intercultural research employs Hall’s concept in various communication settings, few take into account the computer-mediated communication technologies that now play an integral role in the operations of international companies. Our results show that cultural differences in email are present and can be explained by Hall’s dimensions of context, time, and space orientation. In particular, cultural background has a significant impact on the preference for formalness, promptness, preciseness, task-relatedness, and relationship-relatedness in email communication. Implications for managers as well as future studies are derived.

Entrepreneurial and management teams: What makes the difference?

The importance of teams has been largely recognized in recent management and entrepreneurship research. This article critically reviews the literature of entrepreneurial and management teams by comparing the key concepts, and the development and foci of research from the SME performance viewpoint in particular. The comparison reveals that entrepreneurial teams differ from management teams, and so the concepts should not be considered interchangeable. Such teams also operate largely in different contexts, however, both having different roles for management and a significant impact on firm performance. Moreover, the review suggests that entrepreneurial and management teams are often groups rather than teams and they are more common than previously believed, though there is much variation in their prevalence by industry sector and firm size.