Trust-control relationships in new venture teams during organizational emergence

Teams play an important role in the creation of new ventures (Beckman, 2006, Aldrich et al., 2002) as they a relatively controllable determinate of new venture performance, in comparison to, for example, market conditions or... [ view full abstract ]

Teams play an important role in the creation of new ventures (Beckman, 2006, Aldrich et al., 2002) as they a relatively controllable determinate of new venture performance, in comparison to, for example, market conditions or competitor behavior (Forbes et al., 2006). Intra-team trust has been shown to have a positive impact on team performance (De Jong et. al. Forthcomming). The ambiguity and uncertainty inherent in new venture creation also emphasizes the need for trust within the team and speaks to why so many new ventures are started by spousal pairs, close friends, or familiar colleagues (Aldrich et al., 2002, Blenkinsopp and Owens, 2010). Control is an important element of organizational design, as it facilitates structure and expectations management (Eisenhardt, 1985, Greenwood and Hinings, 1988, Das and Teng, 2001). However we know little about how intra-team trust emerges in teams (Fulmer and Gelfand, 2012) or the way in which teams use intra-team trust and control in the early stages of organizational emergence (Klotz et al., 2014). This paper puts forth an analytical framework used for coding group norms documents of 56 new venture teams operating in a pre-incorporation phase of organizational emergence at a technology-based incubator throughout the period 2011-2015. Findings show that nascent entrepreneurs in the venture teams prefer control-based language to trust-based language in early stages of venture emergence, as illustrated in Figure 1. Only 8 of the 56 venture teams had norms which emphasized trust equally or greater than control, and all but one of these were more recent teams (2013 or later).