New Venture Evolution and Managerial Capabilities

Abstract

Factors that result in managerial changes in new firms are discussed, and compared with what is known about large firm succession.More specifically, the effects of firm growth, strategic change, various levels of ownership, board independence, and current top management characteristics on leadership change are studied. Data consisted of 86 semiconductor firms founded between 1983 and 1995 in Silicon Valley and were obtained from public market sources and three market research firms. Findings reveal that either low or very high growth of firms is conducive to changes in top management. Functional diversity in top management teams reduces the amount of personnel change. Lastly, when the locus of control and power is internal, there is a decreased change in top management, as opposed to an increased change when venture capital ownership and board representation are present. (SRY)

Keywords: Experimental/primary research, Semiconductor industry, Firm performance, Leadership, Firm ownership, Startups, Silicon Valley, Management teams, Executives, Boards of directors, Firm growth, Organizational change, Organizational development, Firm governance