Entrepreneurial teams vs management teams: Reasons for team formation in small firms

Abstract

Purpose

The purpose of this paper is to answer whether or not entrepreneurial teams and management teams are a common phenomenon in small firms and to identify differences in the reasons for the formation of these different kinds of joint management. Additionally the impact of joint management on the performance of small businesses is tested.

Design/methodology/approach

To answer the research question a questionnaire survey (n = 119, response rate = 48 per cent) of small firms (20‐49 employees) in Eastern Finland was supplemented by a secondary data collection on financial issues.

Findings

The results show that in nearly four‐fifths of the firms a team was involved in the management. The logistic regression model revealed statistically significant differences between firms with entrepreneurial teams and such with management teams regarding the formation motives turnover, liability distribution and efficiency. Even though secondary data suggested that the firms managed by management teams were bigger, more profitable and faster growing, the differences were not statistically significant.

Research limitations/implications

This study suggests that teams are common in the management of small firms, and that the future research in this field should focus more on the small firm context.

Practical implications

The importance of teams in the management of small firms has to be realized by entrepreneurs, their employees, the consultants as well as by those who create the legal and institutional condition for the creation and development of businesses.

Originality/value

Although the impact of management teams and entrepreneurial teams has been widely studied in large‐firm settings, the studies in the field of small business are rare. With its multi‐perspective approach and its focus on small firms this study breaks new ground in this research field.

Citation

Tihula, S., Huovinen, J. and Fink, M. (2009), "Entrepreneurial teams vs management teams: Reasons for team formation in small firms", Management Research News, Vol. 32 No. 6, pp. 555-566. https://doi.org/10.1108/01409170910962984