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Relationship between Entrepreneurial Team and Performance

Info: 9056 words (36 pages) Dissertation
Published: 9th Dec 2019

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Tagged: BusinessManagement


The investigation entrepreneurship has accrued an enormous body of awareness on the previous circumstances, and significance of entrepreneurial actions. Entrepreneurship is known to be very crucial for the thriving economic society-that is where innovative thoughts and venture prospects abound, and where entrepreneurial zeal is being promoted in an innovative way in open market competitively.  Entrepreneurial teams over the years have set-up more businesses or mostly new teams are created within the initial years of the start-up. Extant literature has shown positive relationship between higher corporate success and team-created ventures. Existing research shows a strong association between higher corporate success and team-created ventures. One of the main motives for greater performance in an organization or in any start-up is that teams in an entrepreneurship is endowed with individual-more human and social capital within the team trying to deal with unforeseen and variations associated with  new start-up in modern day business environment. Again, it can argue that management teams in existing firms perform at the optimum level than firms with sole proprietorship management. The extant literature on entrepreneurship also shows that there is a significant relationship between entrepreneurial team and performance. Moreover, individual entrepreneurs and entrepreneurial teams are encouraged to present proposals to venture capital firms for considerations but mostly favor proposals from entrepreneurial teams because of better performance recorded over the years. Hence, one can argue that entrepreneurial teams seem to play a crucial role to the start-up success. In spite of the prominence of entrepreneurial teams, the greater number of literature on entrepreneurship have concentrated their attention the individual entrepreneurs to the neglect of the entrepreneurial teams. This neglect may be due to lack of adequate definition of the concept.

Hence, the concept of entrepreneurial teams needs to be well-defined and to adequately investigate the determinants of high performing entrepreneurial teams, and in the long-run new start-up performance. This special report seeks to add to the entrepreneurship literature on how to build a successful team, factors that influence the formation of successful teams building and the factors influencing the higher performance from entrepreneurial teams. The report will be organized in two main parts. The initial part will be devoted to the definitions of entrepreneurial teams and the second half of the report will be looking at the factors that influence the formation of entrepreneurial teams and what drives the entrepreneurial teams to perform better than individual entrepreneurial start-ups.


Economists, behavioral scientists and political figures recognize the reputation of entrepreneurs in our society. Entrepreneurs are well-known for their groundbreaking thoughts which comprise of designs on product, progression, marketplace and organizational innovations. These thoughts lead to an economic growth which is significant for society. With this understanding it can be specified that innovative entrepreneurial companies cannot be neglected in our economy. The definition that we use of an entrepreneur is as follows:  An entrepreneur is somebody who directs a commercial venture alone or with a group or that (s)he has acquired a (family) business, alone or with a group. Entrepreneurs vary from non-entrepreneurs and consequently the features of entrepreneurs will be reviewed briefly. These features may also elucidate why some entrepreneurs start alone and others in a team.

The entrepreneurial team is defined in terms of ‘two or more people who establish and share ownership of the new organization’. An entrepreneurial team consists of two or more persons who have an interest, both financial and otherwise, in and commitment to a venture’s future and success; whose work is interdependent in the pursuit of common goals and venture success; who are accountable to the entrepreneurial team and for the venture; who are considered to be at the executive level with executive responsibility in the early phases of the venture, including founding and prestart up; and who are seen as a social entity by themselves and by others.

Entrepreneurial teams refers to the coming together of two or more people who setup a business and run it jointly with substantial financial interest, and keenly participative energy in the day-to-day running of the business. There is this all-purpose understanding that the greater the team participation increases, the more complex choices are made. It has been observed that partaking in a business with partners just increase the creativity of the business.

A more understanding style may be to deliberate how teams essentially form in practice. Current investigation recommends that teams commonly form in layers. The formation team, often small and unavoidable consists of personal relationships, forms the core around which additional affiliates are enlisted as the business grows. In many instances, the new members who join the group after it has been formed represent the outer team, which may be a bit detached from the inner operation of the firm or company. The main task of entrepreneurial leadership is to link the inner core and outer team in a collective manner to form a cohesive team. This is not certainly the duty of a solitary leader, nor is the restrictions of the team impermeable. Though, the team thus fashioned should be improved to exhibit the series of performances required for venture instigation and growth.

Entrepreneurial teams

An entrepreneurial team is a group of people, rather than an individual entrepreneur, involved in the creation and management of a new firm (Cooper and Bruno, 1977; Connor and Reuter, 2006). Many new ventures are founded by teams rather than individuals (Chowdhury, 2005; Lechler, 2001), and such firms are often more successful than those founded by lone entrepreneurs (Birley and Stockley, 2000; Kamm et al., 1990). Commonly cited reasons for such success are the team’s diversity in experience, diversity in ways of thinking, and the larger set of social networks that result from multiple founders. Team entrepreneurship can further enhance performance because both physical and emotional labor can be divided and members can specialize in particular tasks or parts of the firms’ development (e.g. Timmons, 1999). When the knowledge and skills of entrepreneurial team members complement one another (Westhead et al., 1995), teams are strengthened due to their expanded knowledge base, potential for higher cohesion, and ability to cover for one another (Pasanen and Laukkanen, 2006).

Over the last few years, the research on entrepreneurial teams has developed in three primary research streams. The first focuses on the personal connection between team members, such as whether the firm is a family firm with blood-related team members (Haveman and Khaire, 2004), or started by a married couple, or co-preneurs (e.g. Connor and Reuter, 2006), and how such personal connections change the process of founding or managing the business. A second research stream explores demographic aspects of entrepreneurial team composition, such as gender, age, functional background, industry experience, or education of team members, and the extent to which these are homogenous or heterogeneous within the entrepreneurial team (e.g. Chowdhury, 2005; Amason, Shrader & Tompson, 2006). In a third stream the shared or collective cognitions of teams are explored, such as how decisions are made in teams, or how teams handle conflict. Effective decision-making is particularly important in entrepreneurship environments, which are often highly unpredictable and filled with rapid change, which makes the process chaotic, complex, and compressed in time (Aldrich and Martinez, 2001; Baron, 2008). In such environments entrepreneurs cannot reach decisions by following learned scripts (cognitive behaviors) and prescribed behaviors, but instead, have to work together to collectively chart a new course, which necessitates navigating through the complex dynamics of the entrepreneurial team.

Some of the complex dynamics of entrepreneurial teams involve their affective processes, yet surprisingly little attention has been paid to the affective dynamics in entrepreneurial teams. The broader literature on teams in organizations suggests that the affective processes resident within a team impact their performance (e.g. Kelly & Barsade, 2001) and that positive affect operating between group members can significantly improve team processes (Barsade, Ward, Turner & Sonnenfeld, 2000; Walter & Burch, 2008). Importantly, affective processes contribute to both the overall performance of an organization as well as the specific processes that lead to performance, such as effective decision making, creativity, and leadership (see Barsade and Gibson 2007 for a review). The teams’ literature addresses affective processes in many ways, one of which is to examine the affective diversity, or the degree of difference in affective traits that exist between group members (See Barsade and Gibson, 2007 for a review). This is the approach followed in this study. [1]

Affective diversity has been shown in prior management research to influence group outcomes, such as group cohesion, social loafing (Duffy & Shaw, 2000), and performance of an organization (Barsade et al., 2000). In relation, positive affect within a group (conceptualized as the mean level of positive affect in the team) has been shown to reduce cognitive conflict while improving co-operation and task performance (George, 1995). However, in addition to the mean level of the positive affect in the team, positive affective diversity can also make a critical difference to overall team functioning and outcomes Affective diversity is a result of the cumulative affective fit or misfit among group members (Barsade et al., 2000). This fit or misfit is important for effective group functioning because people prefer to work and affiliate with others who tend to be similar on a variety of attributes (Berscheid, 1985), such as demographic and personal characteristics, adherence to a specific value system, or emotional processes. Positive affect in particular has been shown as reinforcing in its own right (Lott and Lott, 1974) because of the similarity – attraction (Byrne, 1971) that happens when it is experienced. In this vein, positive affect, such as entrepreneurial passion experienced by team members provides information of affective similarity in the team, and this further reinforces positive emotions and attraction among team members (Barsade et al., 2000). Although the social psychology literature offers robust and reliable findings on affective similarity attraction processes within groups, prior research in entrepreneurship has not yet unveiled how affective processes (for example different passions) that are evoked based on different entrepreneurial identities operate within entrepreneurial teams and how this contributes to the team’s performance.

In analyzing affective similarity based on entrepreneurial passion that is present among team members, we propose three different team compositions: (a) balanced passion teams, where entrepreneurial passion for each of the three key role identities (inventor, founder, developer) is felt by at least one team member and each team member has entrepreneurial passion for at least one of the entrepreneurial roles; (b) focused passion teams, where passion for only one entrepreneurial role identity is represented on the team, which means that all team members have entrepreneurial passion for the same role identity, and (c) mixed passion teams, where some team members experience entrepreneurial passion, regardless of which roles evoke such passion, while others do not experience passion for any of the entrepreneurial roles.

These different constellations of collective entrepreneurial passion evoke two primary questions: 1) what are the unique team dynamics within teams with each type of collective passion; and 2) what are the specific things that the lead entrepreneur should do in managing the collective passion of the team in order to optimize team and organizational performance?

Entrepreneurial passion and team level processes

Prior organizational research has identified several key outcomes of affective diversity, including individual level attitudes and self perception of team members (such as an individual’s satisfaction with group functioning) as well as group level social processes such as team rapport (O’Reilly, Snyder, & Booth, 1993; see Barasade et al, 2000 for a review). We focus on three specific team dynamics that are likely related to the type of collective passion experienced by entrepreneurial teams: team cohesion, cognitive conflict and affective conflict. All three have been shown to significantly affect group and organizational performance (Barsade, et al., 2000; Jehn, 1995), and thus are important for optimal entrepreneurial team functioning and performance. Table 1 shows a summary of the arguments that follow.

—– Insert Table 1 about here —–

Team cohesion. Team cohesion is a force that ties group members closer together. Even though it has two dimensions, emotional and task-related cohesion, a commonly used definition sees it broadly as feelings of belongingness or attraction to the group (Eisenberg, 2007). Team cohesion reflects synergistic interactions between team members, including use of positive communication (Barrick et al., 1998). Team cohesion can greatly enhance team performance, since it leads to higher satisfaction and team morale, as well as greater communication and efficiency in completing tasks (O’Reilly, et al., 1989). The main factors that influence group cohesiveness are: members’ similarity, group size, entry difficulty, group success and external competition and threats (Beal, Cohen, Burke, McLendon, 2003). Often, these factors work through enhancing the identification of the individual with the group one belongs to as well as beliefs of how the group can fulfill one’s personal needs. In the case of entrepreneurial founding teams, members’ similarity perhaps holds most relevance. The more group members are similar to each other on various characteristics the easier it is to achieve cohesiveness. Group size is also an important determinant of cohesiveness given that it is easier to agree on different goals and co-ordinate work in smaller groups. Finally, external competition and threats also promote group cohesiveness through increased awareness of members’ similarity within their group as well as seeing their group as a means to overcome the external threat or competition they are facing (Eisenberg, 2007). In what follows we elaborate how collective passion interplays with group cohesion related processes.

Affectively homogenous groups in general are more cohesive because of their greater level of familiarity, attraction, and trust based on their shared affectivity (Barsade, et al., 2000). Because of this, teams with different types of collective passion may exhibit different levels of team cohesion. In particular, we expect that focused teams (where team members are all passionate about the same role) will be the highest in team cohesion. This occurs because members of such teams are likely to feel most similar to one another: they all experience passion feelings rather than apathy towards organizational activities; and they all experience passion for the same set of activities, whether that be related to inventing, founding, or developing the organization. There is some evidence that entrepreneurs prefer to associate with other entrepreneurs interested in the same part of the process as themselves. For example, professional associations in entrepreneurship typically follow identity lines, such as associations of inventors (United Inventors Association, for example) or associations of founders (Young Entrepreneur’s Association). Even popular lists of accomplished entrepreneurs such as the Inc. 500 (a list of the 500 fastest growing small organizations in the US each year) group entrepreneurs together who share a similar passion for growth of their ventures (the developer role identity).

Research in both the entrepreneurship and management literatures analyzing organizational value congruence between team members (agreement about task, goal and mission targets and priorities) supports the idea that entrepreneurs with passion for the same role identity will experience high team cohesion. For example, Ensley and Pearson (2005) found that as value congruence increased among venture teams, so did team cohesion. In a study of 387 management executives, Boxx, Odom and Dunn (1991) came upon the same conclusion. Thus we expect team cohesion to be highest among focused passion teams.

We expect team social cohesion to be lowest among mixed collective passion teams. In such teams, some members are passionate for entrepreneurial roles, while others experience no passion for venture related activities, which is a powerful dissimilarity. These teams possess the highest degrees of organizational value divergence, which will lead to lower team cohesion (Boxx et al., 1991; Ensley & Pearson, 2005). Moreover, the dissimilarity in values among these teams is particularly relevant because the team members experiencing passion are likely to hold the venture and its activities as central elements of their self-identities, while the team members who do not experience passion are much less likely to define themselves in terms of the venture. This represents a significant mismatch in affective similarity, which would suggest low social cohesion.

Team cohesion is likely to be moderate among balanced teams, where each team member experiences passion for some aspect of the venture’s activities (and are therefore similar in that regard), although the focus of such passion is by definition on different role identities (and therefore leads to affectivity dissimilarity among team members). We contend that balanced teams experience moderate cohesion because they possess moderate organizational value congruence and moderate affective similarity. These teams possess more value congruence and affective similarity than mixed passion teams (and therefore have more team cohesion than mixed passion teams) but less value congruence and affective similarity than focused passion teams (and subsequently have less team cohesion than focused passion teams).

Team conflict. Models of the effects of team diversity on team performance are careful to point out that the former rarely impacts the latter directly. Rather, the effects of diversity from elements like team passion on team performance are likely mediated by team conflict (Pelled, 1996; Pelled, Eisenhardt & Xin, 1999). Typically, team conflict has been divided into relationship (affective), task (cognitive), and process conflict (see Jordan, Lawrence & Troth, 2006 for a review). A clash of interests, values, actions or directions often sparks a conflict, which further calls for a process of adjustment. Task conflict focuses on conflict over work content or tasks (e.g. how the task should be performed; Jehn, 1995), which is typically resolved using rational arguments and discussion, and thus is often labeled cognitive conflict. Process conflict refers to disagreements over the team’s approach to the task, methods used and its group processes (Jehn 1995), and can be subsumed under the label cognitive conflict. Affective conflict (i.e. relationship conflict) refers to emotional disagreement between individuals (interpersonal incompatibility, Jehn, 1995) that can generate strong negative emotions, such as anger or hostility. Prior research has shown that the emergence of relationship conflict and its effects consistently turns up differently from cognitive conflict, given that the first is primarily emotion based while the latter lacks emotions (Pelled, Eisenhardt, Xin, 1999). Of note, some researchers argue that all team conflict is inherently emotional because it involves perceptions of threats to individuals or team goals (Jordan & Troth, 2004). Jehn and Bendersky (2003: 200) suggest that “both relationship and [cognitive] conflicts may be characterized by strong or weak emotional components.” Despite these differences, there does appear to be consensus that two major kinds of conflict are cognitive and relationship conflict, thus we address both.

In general, cognitive conflict is viewed as productive for team performance, while relationship conflict is destructive (Amason, 1996). Cognitive conflict helps with team decision-making because it allows group members to approach challenges from different perspectives ultimately resulting in better decisions (Amason & Schweiger, 1994). Such conflict also helps performance because it allows group members to criticize and challenge ideas within the group, rather than fall prey to group think (Janis, 1982). The benefits of cognitive heterogeneity in teams is especially critical in unstable or uncertain environments, which is the dominant context for entrepreneurial teams (Ensley, Pearson and Amason, 2000). In contrast, relationship conflict can be very destructive to team processes and performance. In groups that experience relationship conflict, there is often greater anxiety, psychological strain, lack of receptiveness to other members’ ideas, and lack of listening to and assessing new information impartially (Pelled, 1996; Barsade, et al, 2000). Disagreements over ideas are often taken as personal attacks, and are destructive and isolating, which reduces group effectiveness (Amason, 1996). Essentially, with relationship conflict, the team spends energy addressing the conflict rather than the task at hand (Barsade, et al. 2000), while with cognitive conflict team energy is spent addressing the task, which promotes team effectiveness and performance. Unfortunately, past research indicates that cognitive and relationship conflict are often related (Pelled et al., 1999; Simons & Peterson, 2000), with cognitive conflict leading to relationship conflict, so the trick is to try and promote the former without having it trigger or morph into the latter (Ensley, Pearson & Amason, 2002).

Diverse teams in general are less predictable in terms of attitudes and behaviors than homogenous teams, and this unpredictability can lead to both affective and cognitive conflict. Demographic heterogeneity (O’Reilly et al, 1993), personality differences (Barsade, et al, 2000), and differences in values (Jehn, Northcraft, & Neale, 1999) can all lead to greater conflict within a team. That said, different types of team diversity have been linked to different types of conflict. Studies have shown that functional diversity (diversity in educational or work experiences related to the job) is related to cognitive conflict (Jehn et al., 1999; Pelled et al., 1999) while organizational value diversity is linked to relationship conflict (Lankau et al., 2007). We consider the ramifications of this research for different types of entrepreneurial teams next.

With respect to cognitive conflict, in this paper, we make the assumption that all the venture teams possess somewhat diverse functional backgrounds (while this may not be true in all cases, we assume that most ventures are not founded by entrepreneurs with identical work and educational backgrounds). Thus, we take it as a starting point that the different teams, with their varying compositions of passion, will experience at least a moderate degree of cognitive conflict owing to their functional diversity. We must mention though that functional diversity is not the only factor determining the amount of cognitive conflict that arises during team interactions. Team cohesion also factors into the conflict equation because, as Ensley et al. (2002) contends individuals within an entrepreneurial team must trust one another and tolerate dissent in a constructive manner if the disagreements characteristic of cognitive conflict will be allowed to emerge. Otherwise, individuals will be unwilling or afraid to voice contrary opinions for fear of repercussion. This point is reinforced by Barsade et al. (2000) who contend that groups with high levels of positive affective similarity have been also shown to exhibit higher levels of cooperativeness than affectively heterogeneous groups because of greater feelings of familiarity, attraction and trust that are engendered from affective similarity – attraction processes that work to reinforce a group’s co-operation and cohesion. In a study of 70 new ventures, Ensley et al. (2002) empirically demonstrate that teams with higher cohesion experience greater cognitive conflict.

Based on these findings, we suggest that focused passion teams will demonstrate the greatest cognitive conflict because they possess the highest cohesion. As such, they will possess the highest levels of trust and be most willing to disagree with one another. Because they have high team cohesion, they will be comfortable with one another, and comfortable airing ideas that are in contrast to one another. Thus the functional advantages of cognitive conflict are most likely to emerge in teams high in cohesion, here focused passion teams. Balanced and mixed passion teams will also demonstrate some degree of cognitive conflict, but less so than focused passion teams because of their lower cohesion, and thus lower interpersonal trust.

In terms of relationship conflict, teams with focused collective passion should exhibit the lowest relationship conflict, because their affective similarity, and thus their team cohesion, is the highest. In a focused team, members all experience high levels of passion feelings and they are all focused on the same entrepreneurial role identity. This suggests a high level of affective similarity and thus a high level of cohesion. High affective similarity and cohesion are likely to reduce the incidence of social categorization among team members. Categorization involves classifying individuals into distinct social groups, and to the extent that one classifies individuals into groups different from oneself, cohesion may fall and relationship conflict may arise (Pelled, 1996). Focused passion teams are least likely to categorize one another as different because of the similarity in their feelings of passion. They are most likely to recognize that they all possess deep emotional attachments to the venture resulting from the identical focus of their passion to the same entrepreneurial role identity (inventor, founder, or developer). Moreover, these teams are least likely to let cognitive conflict transform into relationship conflict because they do not take dissenting opinions personally since the higher levels of trust and cohesion present in focused passion teams keep cognitive conflict targeted on task-related issues rather than on interpersonal attacks. Our contention is supported by Ensley et al., (2002) who show that entrepreneurial teams with higher cohesion exhibit lower relationship conflict, as well as by Simons and Peterson (2000) who empirically demonstrate that greater intragroup trust reduces the incidence of cognitive conflict triggering relationship conflict.

Following the logic offered above, teams with mixed collective passion will be highest in relationship conflict, because their affective similarity, and thus their cohesion, will be lowest. These teams are the most likely to experience social categorization (Pelled, 1996) as individual members view themselves as distinct and different from one another due to their stark differences in the existence of (whether or not they feel passion) and focus of (if they feel it, for which identity) passion feelings. As such, the cognitive conflicts that occur in these teams are most likely to morph into relationship conflict because there is a lack of trust, understanding, and a sense of shared belonging among team members. Disagreements about tasks or processes are more likely to be misinterpreted as personal attacks since it is evident to everyone that not all the individuals share the same level or type of passion for the venture and related activities.

Finally, balanced collective passion teams will have moderate levels of relationship conflict, driven primarily by their moderate levels of cohesion. Cohesion in these teams is moderate because the members all experience passion (similarity) but it is focused on different things (dissimilarity). These teams benefit from more cohesion than mixed passion teams, and thus have higher trust, and as a result, lower relationship conflict. Even though their passions are aimed in differing directions, members of balanced passion teams still recognize that everyone has a passion for some aspect of the venture (compared to mixed passion teams where certain members do not feel any passion for the venture at all). Possessing at least some degree of passion for the venture even if it is directed at different entrepreneurial identities should help to elevate intragroup trust and mitigate the transformation of cognitive conflict into relationship conflict. Unfortunately, these teams do not possess the high levels of trust and cohesion present in focused passion teams, so they are likely to experience more relationship conflict than focused passion teams.

The entrepreneurial mind must manage collective passion.

Although the focus of this research is on collective passion and team related processes, within any entrepreneurial team there is usually one individual who is the leader of the team, either formally or informally. In all three types of teams, in order for the team and organization to work optimally, the lead entrepreneur must be able to recognize which type of collective passion is shared among the team, and manage the team dynamics specific to that type of passion. We discuss management challenges specific to each particular team composition.

In a focused team, team cohesion and cognitive conflict are high, while relationship conflict is low. Greater team cohesion, affective similarity, and value congruence leads to more trust within the team, and therefore differences in opinion can be aired constructively with little harm to interpersonal relationships. Team leaders are most likely to use delegation and participative leadership in a team with greater cohesion (Barsade et al, 2000). Because of the high levels of team cohesion and productive cognitive conflict, the team leader might be driven into thinking that the team processes are all working well, so there are no potential tensions. However, because all team members feel passion for the same role identity, there is a possibility to ignore challenges or tasks in the environment related to the other two roles. A focused passion team is less likely to want to engage in activities associated with entrepreneurial identities outside their passion realm. For example, an entrepreneurial team passionate about the inventing role may be less interested in founding the business or commercializing the inventions they have discovered, making the team less flexible to business demands that they do so. This may result in the team missing the market opportunity for their products or services, which is dysfunctional for team performance. One recommendation for this team leader might be that s/he use the resources that are freed up from having to manage interpersonal problems among the team (i.e., the team doesn’t have much relationship conflict, so the leader has more time to focus on other things) and focus on an effort to predict what skills and resources will be needed that the team doesn’t currently possess. These resources can either be brought into the firm, such as by hiring employees or contractors with those key skills, or the responsibility for them can be shared equally among team members. Some effort should be expended in this type of team on ensuring a fair distribution of tasks among team members, particularly those unrelated to the focal role identity, so that each member of the team has the responsibility for non-identity meaningful activities. Otherwise, an unfair distribution could lead to eventual affective conflict for team members taking on responsibility for activities that are less enjoyable to them. However, such a rotation could be harmful from a competence standpoint. In sum, a focused passion team is optimal in terms of team cohesion, cognitive conflict, and relationship conflict, but may be at greatest risk of lacking some of the competencies needed to attain maximum venture performance.

In a balanced team, team cohesion, cognitive conflict, and relationship conflict are all moderate. In balanced passion teams, the situation is the shadow of the focused passion team. The team is optimally balanced for handling changes in the environment (everyone has a desire to do something different in the business) but this can lead to lower cohesion and thus more problems with interpersonal interaction. If no one shares one person’s passion (the opposite of focused passion teams) that person can begin to feel isolated (see our arguments about social categorization above). Isolation can reduce trust and raise affective conflict. The team leader has to work actively to break the cognitive conflict to affective conflict link by engaging in team-building activities. These team members are all highly emotionally invested in the venture, but in different aspects (owing to different identities) and that could be a powder keg of relationship conflict. The team leader must work to prevent small disagreements from growing into larger disputes. Energy spent on team-building and development of team cohesion could be extremely beneficial in a balanced passion team, because this would lead to more open sharing of cognitive conflicts, which would result in optimal decision-making for the team, since all aspects of the venture’s business are represented in the team (passion is experienced for all three role identities). Team leaders in a balanced passion team must also provide greater clarity about goals, values, and tasks for the team in order to develop shared understanding (Vyakarnam & Handelberg, 2005), which can help the team function more optimally.

In a mixed passion team, team cohesion is low, while cognitive conflict is moderate and relationship conflict is high. This is the most challenging type of team for the lead entrepreneur to manage. Low social cohesion and high relationship conflict make it likely that there will be a lot of interpersonal conflicts and that those conflicts will often be perceived as personal attacks. There is likely to be a lack of communication and a lack of focus on tasks. Moderate cognitive conflict means there will be diversity in thinking, but not at an optimal level, primarily because the low team cohesion will spur distrust between members and make them hesitant to voice their divergent ideas. The lead entrepreneur in this type of team has to set up appropriate systems to manage the interpersonal tensions and stressors and to make sure to provide an environment for decision making that is safe for all members. Techniques like rotating the devil’s advocate role, non-judgmental brainstorming sessions, or the use of organizational development facilitators for key decisions may be helpful. It is critical in this type of team that team members understand the overall organizational and team goals and also understand each other’s contributions to the team (Mohrman & Cohen, 1994). This is so that team members can be on the same “wavelength” about business cycles and strategies to be successful (Watson et al., 1995). Scholars note that in addition to shared understanding of goals (Vyakarnam & Handelberg, 2005), team members should also communicate about venture team structure (Bird, 1989) and their individual and shared values in order to increase team success. There is also a chance that a mixed passion team will have key areas where no team member feels passionate, leading to the challenges noted for focused passion teams where some types of critical venture activities may tend to be ignored. In contrast to focused passion teams (where everyone has a passion directed at the same role identity within the same venture) and balanced passion teams (where everyone has a passion directed at different role identities, but still within the same venture), mixed passion teams suffer from perceptions among team members that their colleagues may not have any passion at all for any aspect of the venture. These differences between individuals can reduce commitment of team members to one another, and to the venture (Bishop & Scott, 1996). Lead entrepreneurs must take measures to ensure that all members of the team (passionate and non-passionate) understand the commitment of the entire team to the venture’s overall success. Thus leaders of mixed passion teams have a dual challenge of managing the interpersonal tensions with the team and managing potential skill gaps among team members.


In this chapter, we extend the recent work on affective processes of entrepreneurs (e.g., Baron, 2007; 2008) by integrating work concerning the individual entrepreneurial passion of solo-entrepreneurs with work on the composition and dynamics that occur within entrepreneurial teams to propose a new conceptualization of collective passion and its effects. Building upon recent developments of entrepreneurial passion by Cardon and colleagues (in press) we elevate the concept of passion to the group level and conceptualize collective passion as the combined entrepreneurial passion experienced by members of a team of entrepreneurs, including potential differences in the level and focus of each member’s individual passion. We believe that exploration of collective passion is important for two reasons: (1) entrepreneurial passion has been shown to be a powerful motivational resource that leads to attainment of entrepreneurial goals despite formidable obstacles and (2) there is an evident gap in extant research surrounding how entrepreneurial passion works within teams, especially where a lead entrepreneur needs not only to manage his/her own passion but must also work with the various potential configurations of passion among team members. We outline several contributions of our research for future theoretical and empirical research and implications for business practice below.

Our main conceptual contribution to the entrepreneurship literature stems from raising the discussion of entrepreneurial passion from the individual to the group level. This has implications for the future research on entrepreneurial passion as well as on entrepreneurial teams. First, we introduce the concept of collective passion based on the experience of different role identities within the entrepreneurial team. Specifically, we show how diversity of entrepreneurial passions may influence emergence of a collective passion within the team, and how this affects team related processes as well as the venture’s performance. We found our analysis on the proposal of three different team compositions based on individually experienced entrepreneurial passions: balanced passion teams, focused passion teams, and mixed passionteams. By introducing collective passion as an important characteristics of entrepreneurial teams we contribute to the literature on entrepreneurial teams beyond current discussions of personal connections between team members, demographic aspects of entrepreneurial team composition, collective cognitions, and how such characteristics change the process of founding and managing the entrepreneurial team. We show that affective processes within teams may influence overall venture performance directly and indirectly through team dynamics and processes. More specifically, we explore the effects of collective passion on two important within team dynamics processes: team cohesion, and team conflict. We argue that in a focused team, team cohesion and cognitive conflict will be high and relationship conflict will be low because all team members feel passion for the same role identity. In a balanced entrepreneurial passion team, team cohesion, cognitive conflict and relationship conflict will all be moderate. Finally, it seems that a mixed passion team is likely to face low team cohesion, moderate cognitive conflict and high relationship conflict. This implies a variety of leadership challenges that entrepreneurial minds are likely to face within founding teams.

Another contribution of this chapter lies in our examination of different sources for passion among entrepreneurial team members. The majority of the research in management and entrepreneurship analyzing affect does so with little consideration of the eliciting stimulus. Scholars tend to assume that as long as emotions created by varying stimuli are the same, the effects will be identical. For example, a commonly used procedure for inducing emotions in laboratory studies (e. g. Lerner & Keltner, 2001) involves asking subjects to write about a situation that makes them feel the target emotion (sad, angry, happy, etc.) In such an induction, there is no control over the actual eliciting stimuli (i.e. subjects are free to select any stimulus they want); the focus is solely upon creating the desired emotion. While this practice is common in laboratory research, most theories of emotion, especially those involving cognitive appraisals or reappraisals (e.g. Cacioppo & Gardner, 1999; Feldman Barrett, Mesquita, Ochsner & Gross, 2007; Lambie & Marcel, 2002) assert that conscious consideration of the stimulus is of paramount importance. Though it is possible for different stimuli to elicit identical emotions (as is presumed in experimental research) even small differences in the stimuli may contribute to varied emotional experiences. We consider such differences in this study by examining different sources (i.e., the various entrepreneurial identities) for entrepreneurial passion. Further, we examine how different targets for entrepreneurial passion may catalyze different reactions among the other members of the entrepreneurial team. This approach relies on the interpersonal focus in affective diversity theory that emphasizes how emotions are social entities (Parkinson, 1996) and as such, those emotions felt and expressed by one individual can affect other members of a team. It is important to remember that not all entrepreneurial passions are created equally, that they do not all have identical effects, and that lead entrepreneurs must be able to recognize these differences if they are to effectively manage their ventures.

Implications for practitioners

In this chapter, we highlight the importance of managing affective resources, both within oneself as well as among the top management team of the new venture. Managing the various constellations of entrepreneurial passion mentioned in this chapter must be preceded by the ability to recognize affective diversity. An important element of an individual’s entrepreneurial development is to nurture one’s competencies to perceive, understand and regulate emotions. In this respect, development of an entrepreneurial mindset should explicitly include development of one’s specific affective abilities.   Entrepreneurs who possess the ability to accurately detect variances in passion among their colleagues have an advantage in being able to manage those differences. Thus, it appears that the construct of emotional intelligence is relevant here. Emotional intelligence involves the ability of an individual to accurately sense and reason about emotions, and to use one’s knowledge about those emotions to enhance thought and action (Mayer, Roberts & Barsade, 2008; Salovey & Mayer, 1990). Entrepreneurs who possess greater emotional intelligence appear better equipped to manage the various different types of collective passion we discuss.

In addition to being aware of variances in an entrepreneurial team’s collective passion composition, several relationship management strategies may be worthwhile to consider.

Finally, when thinking of appropriate strategies to manage collective passion within teams, one need to realize that team dynamics can easily change. Therefore, it is important that the lead entrepreneur avoids tunnel vision during his or her monitoring of on-going team processes. Prior research shows that affective processes are not only personality dependent, but other factors such as technology, industry, physical space have been shown to critically influence dynamics of affective processes within a group. Prior research of emotions in small groups (Kelly & Barsade, 1991) has shown that in order to fully understand the dynamic and reciprocal nature of group affect one needs to consider the feedback loop from group emotion to affective antecedents of group emotion. In other words, relationship management strategies that are employed by the lead entrepreneur in order to secure entrepreneurial team performance goals, have influences on the lead entrepreneur him/herself, and his or her recurring affective processes. Such feedback loops need to be considered in future work on affective processes within entrepreneurial teams.

We realize that it is difficult and probably impractical to train entrepreneurs to feel the specific types of entrepreneurial passion needed in order to achieve total balance within a team. Thus, not every entrepreneurial venture is likely to enjoy the cohesion and conflict advantages emerging from focused-passion or balanced-passion teams that are discussed above. Perhaps not every venture should be forced to conform to a focused or balanced passion team, though, because we must be cautious as to how much we try to “manage” another person’s passions. Remember that our own passions derive their much of their drive and power from a sense of authenticity and feeling that resonates with who we truly are, not who someone else wants us to be. Thus, to some extent, it is either unrealistic or unwise for a lead entrepreneur to try to alter his or her colleagues’ passions directly. Tinkering too much with someone else’s passion could diminish the uniquely individual quality that harmonizes that passion with the entrepreneur’s role identity, thus depleting one’s motivational fire. Our intent in this chapter is not aimed at managing passions, but rather in helping lead entrepreneurs to realize the structure of the collective passion they may be confronted with in their entrepreneurial team. By acknowledging the diversity of passion and affective similarity that a particular entrepreneurial team is facing, an emotionally intelligent lead entrepreneur will take care to sample the affective impulses of the team and use this information to craft behaviors and responses in emotionally charged situations (Rafaeli & Sutton, 1990). In order to enhance one’s regulations skills, several specific tools have been suggested, such as affective computing (Shepherd, 2004), reflection based activities, such as journaling (Brown, 2003), and others. This provides new opportunities for lead entrepreneurs who aspire to enhance effectiveness of their entrepreneurial teams.


Future research avenues

We hope that the idea of collective passion within entrepreneurial founding teams poses exciting new questions in researching the emergence and dynamics of entrepreneurial teams. The concept provides a starting point to explore questions such as: why do some entrepreneurial teams succeed in achieving individual as well as team level venture related goals, whereas other teams break apart when challenges or unexpected successes are confronted? It would be fascinating to explore whether specific teams fail because of too much affective similarity in collective passion (so that there is a lack of competence and necessary skills) or too much affective dissimilarity among passions (so that there is too much cognitive and / or relationship conflict). Further, using a longitudinal research lens one could explore how successes or failures in one venture, with one type of collective passion composition, facilitates or debilitates subsequent team building and venturing by the individuals involved.

In this research we have undertaken relatively static view of entrepreneurial team dynamics. Yet, entrepreneurship teams are not static and members come and go (Ucbasaran et al., 2003) as the venture grows and the specific challenges experienced shift. A more robust view of the affective diversity of an entrepreneurial team would ideally use a longitudinal research design. Indeed, empirical testing of the proposed concept and exploration of team composition may add additional information about which types of collective passion teams are prevalent in practice. Since our arguments are primarily conceptual at this juncture, empirical examination is needed to see whether entrepreneurs put teams together pragmatically by accounting for different skill sets, or are rather driven by affective similarity in passions among would be colleagues. To what extent do entrepreneurs consider the felt passion of potential team members prior to them joining the team, and to what extent do the constellations of collective team passions impact firm cohesion, conflict, and ultimately performance, or the departure of team members after the venture has been founded? Dynamic, longitudinal field research is needed to address such issues.

In this chapter we have included two team dynamics variables: team cohesion and team conflict. Future conceptual and empirical research could extend the list of team performance related variables to include other factors such as team coordination, goal-setting, learning, feedback monitoring and backup behavior (LePine et al., 2008). Further, does collective passion directly influence venture performance, or are these effects always mediated by team dynamic factors such as those considered above?

Finally, in order to pursue empirical testing of the proposed concept, original scale development work is needed to capture the phenomenon of collective passion. Currently there are no measures of individual entrepreneurial passion, much less of collective team passion. In addition, the concept of affective diversity appears in literature on teams’ as a trait like concept, while we are suggesting it may be an interpersonal variable instead. As such, scale validation, and possibly new scale development needs to be done concerning both collective passion and affective diversity as it is used in this chapter. Initial testing of measures and research designs would require field studies. These could potentially utilize current technology of wireless communication to allow on time and on site capture of the data. The MIT Media Lab study of social networks has demonstrated some success in capturing real time data about entrepreneur’s daily experience of emotions and subsequent adaptive behaviors (Eagle, 2005), and could be a useful starting point for further research.


Research on affect and passion in entrepreneurship has seen a research surge and theoretical and empirical work is developing at a fast pace (e.g. Baron, 2008; Cardon et al., in press). As we continue to push the boundaries with our study of affect and passion among individual entrepreneurs, we must be mindful of the context in which we hope to apply our research. New ventures cannot arise without the efforts of individual entrepreneurs (McMullen & Shepherd, 2006), but most new ventures are the product of teams of entrepreneurs, not individual ones (Kamm, et al., 1990). As such, it behooves us to extend our theorizing on individual constructs like affect and passion to the team level. We have taken a first step in this chapter towards pushing thinking about the interactions of affect and passion in teams. However, much more needs to be done in terms of analyzing how passion permeates and pervades team cognitions and actions, and ultimately influences venture outcomes. We hope that we have stimulated a discourse among scholars concerning the importance of these factors in our field.

[1] Even though “affective diversity” has traditionally been applied to individual differences in affective traits or personalities between people (Barsade et al., 2000), we contend that this theoretical lens is still appropriate to use when examining the collective passion of entrepreneurial teams.  The primary difference between emotion states (like passion) and emotion traits (the traditional focus of affective diversity) is that the former has a clearly identifiable target while the latter emerges from a personality predisposition and as such, does not need to have a clear target (Barsade et al., 2000).  Despite this difference in sources, the effects of both state and trait affect, once produced, may be similar (Baron, 2008; Lyubomirsky et al., 2005).  Using a lens, such as affective diversity, that acknowledges the social nature of affect (e.g. Parkinson, 1996) allows us to examine the interpersonal effects of passion.

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