Conflicts and Decision-making in Entrepreneurial Firms
The topic of conflicts and decision-making in entrepreneurial firms is one of many research threads that Centre for Entrepreneurship has extensively contributed into over the years. In this post, we would like to highlight several exciting papers that extend our understanding of conflicts in entrepreneurial teams and their consequences.
Conflicts and their consequences in entrepreneurial teams.
Rapidly-changing and highly uncertain entrepreneurial environment, and absence of internal decision-making routines frequently complicate decision-making processes in start-ups. These complex conditions may lead to various types of conflicts such as affective conflict that involves personal level issues, task conflict that refers to discrepancies in opinions about the task itself, or process conflict that relates to differences in perception of how to accomplish the task. Naturally, for nascent ventures, these conflicts have serious internal and external consequences, which is the central theme of studies presented here and conducted by Truls Erikson (University of Oslo), Andrew Zacharakis (Babson College), Bradley George (Babson College), and Annaleena Parhankangas (University of Illinois). This series of papers advances our knowledge about different types of conflicts, their interrelations, and the consequences these may have on firms’ performance and partnership with venture capitalists.
In particular, in Conflict between the VC and entrepreneur: the entrepreneur’s perspective, Zacharakis, Erikson & George are set to investigate the effects of conflicts on partner cooperation. Here, the authors cast light on how conflict between VC and entrepreneur (intergroup conflict) interact with conflict in the entrepreneurial team (intragroup conflict). The theme of conflict within the VC/entrepreneur dyad is also examined in Exploring the venture capitalist/entrepreneur relationship: the effect of conflict upon confidence in partner cooperation, where Erikson and Zacharakis look at how conflicts impact confidence in partner cooperation.
Another important topic the authors explored in their studies is how different types of conflicts interact with each other. Specifically, in Preventing dysfunctional conflict: examining the relationship between different types of managerial conflict in venture capital-backed firms, George, Erikson, and Parhankangas advance our knowledge and explore the complex interactions between task, process, and affective conflicts in venture-backed entrepreneurial firms. This paper makes an important scholarly contribution and provides a potential explanation for inconsistent results from previous studies that looked at the outcomes of different types of conflict.This exciting topic is further examined in Decision-making disagreements and performance in venture capital backed firms where on the example of multiple firms and industries, Erikson and George investigate the effects of proportional conflict (the combination of different types of conflict) on new venture performance.
Truls Erikson is a professor and director of Centre for Entrepreneurship.