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Growing pains in scale-ups: How scaling affects new venture employee burnout and job satisfaction
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO).ORCID iD: 0000-0001-7256-8023
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO).ORCID iD: 0000-0003-3998-1515
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO). Jönköping University, Jönköping International Business School, JIBS, Centre for Entrepreneurship and Spatial Economics (CEnSE).ORCID iD: 0000-0003-0691-2740
Syracuse University, Martin J. Whitman School of Management, Department of Entrepreneurship and Emerging Enterprises, Syracuse, NY, United States of America.ORCID iD: 0000-0002-1105-2469
2024 (English)In: Journal of Business Venturing, ISSN 0883-9026, E-ISSN 1873-2003, Vol. 39, no 2, article id 106367Article in journal (Refereed) Published
Abstract [en]

Although academic interest in organizational scaling is growing, extant research has focused primarily on the antecedents and processes, neglecting how employees experience scaling. Drawing on the scale-up, firm growth, and well-being literature, we take an employee perspective to examine the impact of scaling on employee burnout and job satisfaction. Using a sample of 10,908 new venture employees in Sweden, we show that scaling is positively associated with employee burnout, and negatively with job satisfaction. We also show that the link between scaling, burnout, and job satisfaction depends on whether the employee is in a managerial position or has prior new venture experience.

Place, publisher, year, edition, pages
2024. Vol. 39, no 2, article id 106367
Keywords [en]
New venture scaling, Scale-up, Employee burnout, Employee job satisfaction
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-62997DOI: 10.1016/j.jbusvent.2023.106367Scopus ID: 2-s2.0-85177857195Local ID: HOA;intsam;62997OAI: oai:DiVA.org:hj-62997DiVA, id: diva2:1817046
Funder
The Kamprad Family FoundationAvailable from: 2023-12-05 Created: 2023-12-05 Last updated: 2024-04-15Bibliographically approved
In thesis
1. Beyond the bright side: Investigating dark aspects of independent entrepreneurship, family entrepreneurship, and corporate entrepreneurship
Open this publication in new window or tab >>Beyond the bright side: Investigating dark aspects of independent entrepreneurship, family entrepreneurship, and corporate entrepreneurship
2024 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Entrepreneurship is often perceived as a driving force for employment, innovation, and knowledge creation and is linked to poverty alleviation and economic growth. While entrepreneurship is often seen as a pathway for economic development and societal welfare, it does not consistently deliver the expected outcomes and, in certain instances, may exacerbate poverty, impede development, and present challenges to societal well-being and equality. This paradox within entrepreneurship emphasizes the necessity of exploring the negative (dark) aspects pertaining to entrepreneurship. Neglecting these negative aspects can lead to an incomplete understanding of entrepreneurship. Accordingly, this dissertation challenges the conventional positive view of entrepreneurship by (1) investigating some negative (i.e., dark) aspects of independent entrepreneurship, family entrepreneurship, and corporate entrepreneurship and (2) what might potentially mitigate these negative aspects. This is essential for achieving a balanced and comprehensive understanding of entrepreneurship’s role in the economy and society at large.

I draw on the theory of entrepreneurial allocation, which posits that entrepreneurship can be productive, unproductive, or destructive, as the main theoretical perspective of this dissertation. This dissertation includes three empirical papers, each focusing on a distinct type of ownership: owner-manager ownership (independent entrepreneurship), family ownership (family entrepreneurship), and external investor ownership (corporate entrepreneurship). Together, they offer different insights into the potential negative aspects pertaining to entrepreneurship. Each paper draws on different theoretical perspectives and aligns with particular Sustainable Development Goals (SDGs).

In paper 1, we draw on the scale-up, firm growth, and well-being literature, taking an employee perspective to examine the impact of scaling on employee well-being. Using data from 10,908 employees in new Swedish ventures, we find a positive association between scaling and employee burnout, along with a negative association with job satisfaction. This emphasizes that scaling, often associated with a positive view, can also bring challenges to employee well-being. Meanwhile, we show that employees with managerial roles and prior new venture experience are two groups of employees who are less likely to experience the negative consequences of scaling. Paper 2 investigates how family dynamics (the upbringing environment) within entrepreneurial families can influence offspring career choices. In this paper, we draw on the birth order literature, which adopts an evolutionary theory perspective, to suggest that offspring are exposed to a different upbringing environment due to the unequal distribution of parental resources, potentially affecting their personality and behaviors and thus resulting in unequal career opportunities. In this paper, we use data comprising 205,247 offspring residents in Sweden to show that later-born offspring, though more likely to join the parent’s business, often have a higher tendency to leave compared to their early-born siblings. However, these later-borns can be particularly advantageous in competitive or challenging business situations. In an additional analysis, we show that earlier-born offspring are more inclined toward independent entrepreneurship. Lastly, paper 3 focuses on the negative aspects pertaining to corporate entrepreneurship. Drawing on agency theory, paper 3 shows that institutional investors (e.g., investment banks, insurance companies, etc.), while they are usually viewed positively because of their known sophisticated investment strategies and long-term horizons, induce negative effects and have a potential dark side on corporate entrepreneurs. Specifically, I argue that the extant literature views institutional investors as a homogenous group in terms of their innovation preferences. This oversimplified view overlooks the possible variations within these institutional investors. Following an empirics-first (EF) approach, I segment institutional investors based on their innovation preferences, using portfolio data and historical trading information. This analysis identifies three distinct segments: innovation-friendly, innovation-unfriendly, and innovation-investment-oriented. Using a sample of 6,438 U.S. publicly traded firms, I find that firms predominantly owned by innovation-unfriendly institutional investors experience a decrease in innovation productivity and overall firm value compared to those dominated by innovation-friendly investors. Moreover, I show that firms can strategically position themselves to attract innovation-friendly institutional investors in order to mitigate the negative effects enacted by innovation-unfriendly investors.

This dissertation offers several contributions to the field of entrepreneurship. First, it contributes to the potential (social) costs of entrepreneurship by investigating some negative aspects pertaining to independent, family, and corporate entrepreneurship. Second, it adds to the ongoing discussion on how to mitigate these negative aspects. Third, this dissertation contributes to the theory of entrepreneurial allocation by revealing that beyond traditional institutional actors like governments, there are other influential forces, suh as the entrepreneur, entrepreneurial firm, and institutional investors, that can direct entrepreneurial activities towards productive, unproductive, or destructive paths. This dissertation provides implications for policymaking relevant to four specific Sustainable Development Goals: SDG 3 (promoting well-being), SDG 8 (fostering a decent work environment), SDG 10 (addressing inequalities), and SDG 9 (enhancing innovation). It also has implications for practitioners such as entrepreneurs and their followers (i.e., employees).

Place, publisher, year, edition, pages
Jönköping: Jönköping University, Jönköping International Business School, 2024. p. 78
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 162
National Category
Business Administration
Identifiers
urn:nbn:se:hj:diva-63996 (URN)978-91-7914-038-0 (ISBN)978-91-7914-039-7 (ISBN)
Public defence
2024-05-24, B1014, Jönköping International Business School, Jönköping, 13:15 (English)
Opponent
Supervisors
Available from: 2024-04-15 Created: 2024-04-15 Last updated: 2024-04-15Bibliographically approved

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Genedy, Mohamed A.Hellerstedt, KarinNaldi, LuciaWiklund, Johan

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