Research On Influence Of New Venture’s Entrepreneurial Team Faultlines On Entrepreneurial Behavior

The growing importance of entrepreneurship regarded as a crucial contributor toeconomic development is generally acknowledged, especially the driving effects of“entrepreneurial economy” in emerging economies. However, the context of China’stransition economy characterized by complex and unstable markets, which is in needof higher requirements for start-ups survival and sustainable development. Nowadays,entrepreneurship in single player mode has been difficult to adapt to the increasinglyfierce market competition, whilst team entrepreneurship is conducive to promotingnew venture performance. Scholars have gradually realized the significance of teamresearch, which have focused on the relationship between team diversity and teamprocess or performance. Yet, existing studies tend to excessively simplify the teamcomposition, failing to examine team composition that it is embodied by multipleattributes. The term “faultlines” opens up new horizons, which further deepens andsurpasses existing team research. Although the research into faultlines has made hardeffort for many years, there still has not reached consensuses in the formation,evolution mechanism and governance countermeasure of faultlines. Therefore, thispaper attempts to introduce and apply this concept to entrepreneurship field, hoping tofurther boost faultlines research, and expecting to answer specific entrepreneurshipquestions. Obviously, opportunity and resource are central to entrepreneurship. Thelong-term survival and growth of a venture requires continuous exploration ofentrepreneurial behaviors, which is inextricably linked with opportunity developmentand resource development. For new ventures within the context of transitioneconomies, a firm possessing the outstanding capabilities of controlling scarceresources cannot guarantee sustained competitive advantage. Rather, most successfulnew ventures are facilitating their sound utilized resource advantages, and convertingthese resource advantages into valuable opportunities. In this sense, this paper focuseson different types of faultlines affects entrepreneurial behaviors, especially concernsabout how organization capture opportunities and apply combinations of resources athand under team intention of the realization of enterprise wealth maximization.Moreover, faultlines acts like a double-edge sword. The construction of sub-group is conducive to enhance team cohesion and stability, if mishandled, which mightseriously weaken the joint force to solve problems, and even lead to the team collapseor friction. Under such circumstances, new ventures are needed to engage inexecuting faultlines governance in order to better the efficience of venture creationand development. Nonetheless, few scholars paid attention to the prominentimportance of shared goals in team study. From the logic of resource-based view(RBV), building a shared objective is a necessary precondition for the creation ofsynergistic effect in an entrepreneurial team. In this paper, we attempt to reveal themechanisms of faultlines governance, to explore the moderating effect of sharedobjects on the relationship between entrepreneurial team faultlines and opportunityindentification and resource allocation, making the fact that entrepreneurial team canfunction “1+1>2” synergy to successfully capture profitable entrepreneurialopportunity and achieve optimal resources configuration.Based on the above theoretical gaps, we propose eight hypotheses in this paper.We test our hypotheses with survey data collected from246useful questionnaires by58new ventures in China. Our finding suggests that entrepreneurial teamsocial-categorization faultlines negatively affect opportunity identification andresource allocation, while entrepreneurial team information-based faultlines positivelyinfluence on opportunity identification and resource allocation. Moreover, sharedgoals will significant attenuate the relationship between social-categorizationfaultlines and entrepreneurial behaviors, as well as shared goals will positivelymoderate the relationship between information-based faultlines and opportunityidentification, but not influence on resource allocation when the strength ofinformation-based faultlines are strong.Overall, this article makes three contributions on theoretical level. First, anexploratory study about the effect of new venture’s entrepreneurial team faultlines ondifferent entrepreneurial behaviors and its mechanism has been done. Team faultlinesis regarded as the important issue of organizational behavior. Existed research mainlyfocused on discussing the relationship between faultlines and group or organizationalperformance, but only a few studies are from an entrepreneurship perspective,especially the empirical research at the same time attention to opportunityidentification and resource allocation. Moreover, scholars have not completely figuredout the relationship between faultlines and outcomes. This may be caused byentrepreneurial behaviors, which are key variables that can directly affect outcomes were ignored. Therefore, this study embarks from team faultlines that providessignificant impacts on team process and effectiveness, and is connected withentrepreneurial behaviors instead of performance as outcome variables. Accordingly,we study the influence mechanism by providing a fine-grained conceptual analysis ofthe relationship between team faultlines and different entrepreneurial behaviors,moreover, we have a much deeper understand about the two key behaviors ofentrepreneurial activities-opportunity identification and resource allocation. Second,the understanding on the difference of team faultlines category deepens. At present,empirical research on faultlines based form different perspective are rare. We classifythe faultline type according to previous research, as well as recognize and analyzerepresentative the component elements of team faultlines in Chinese-context. It makesus systematically understand the relationship between team faultlines andentrepreneurial behaviors by social-categorization and information-based view, andprovides us a new perspective to analyze entrepreneurial team about how to pursueopportunities and apply resources at hand under the circumstances of takingadvantage of existing team’s composition characteristics, which will help to enrichand extend the relevant theoretical research. Third, moderating effects of shared goalson different types of team faultlines and entrepreneurial behaviors have beenspecifically analyzed and examinined to reveal the fact that new ventures how topromote the positive effects of different kinds of team composition onentreprenenurial activities by building and creating shared goals, which is especiallyinstructive for those resource-limited firms.This paper is arranged as follows: The first chapter primarily describes realisticand theoretical background of the subject, research question, research contents,structure arrangement regarding research research method and technical route. Inchapter two, it starts with a review of the concept of entrepreneurial team, teamfaultlines, opportunity recognition, and resource allocation, which laid the theoreticalfoundation for the follow-up study. Chapter three, it builds the conceptual frameworkbased on Timmons model, upper echelon perspective, resource-based view,similarity–attraction paradigm, and social identity theory, and utilizes secondary dataand spot interviews to building or refining the theoretical model. The fourth chapterstudies the relationships among four elements, respectively, entrepreneurial teamfaultlines, opportunity identification, resource allocation and share goals, and then putforward some theory hypotheses. In chapter five, it designs for conceptual model, including questionnaire design, data collection and its sample statistics, measures ofvariables, and factor analysis and reliability analysis. Chapter six, it uses multipleregression analysis method to analyze the data and test the hypotheses. In Chapterseven, it analyzes and discusses the data results, to make practical implications forentrepreneurial teams of new ventures. At the final chapter, it throughly makes areview of research conclusions, pinpoints the theoretical contributions and practicalimplications, and put forward the limitations of this study and future researchdirections.