The Organizational Design of High-Tech Startups and Product Innovation

42 Pages Posted: 3 Jan 2018

See all articles by Christoph Grimpe

Christoph Grimpe

Copenhagen Business School - Department of Innovation and Organizational Economics; ZEW Centre for European Economic Research

Martin Murmann

Centre for European Economic Research (ZEW)

Wolfgang Sofka

Copenhagen Business School

Date Written: 2017

Abstract

We investigate whether appointing a middle management level affects startups’ innovation performance. Additional hierarchical levels are often suspected to restrict innovative activities. However, founders’ capacities for information processing and resource allocation are usually strongly limited while, at the same time, R&D decisions are among the most consequential choices of startups. We argue that middle management is positively related to introducing product innovations because it improves the success rates from recombining existing knowledge as well as managing R&D personnel. In addition, we suggest that the effectiveness of these mechanisms depends on the riskiness of a startup’s business opportunity. Based on a sample of German high-tech startups, we find support for our conjectures.

Keywords: Middle Management, Innovation Performance, R&D, Startups, Organizational Design, R&D Management

Suggested Citation

Grimpe, Christoph and Murmann, Martin and Sofka, Wolfgang, The Organizational Design of High-Tech Startups and Product Innovation (2017). ZEW - Centre for European Economic Research Discussion Paper No. 17-074, Available at SSRN: https://ssrn.com/abstract=3095481

Christoph Grimpe (Contact Author)

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

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Frederiksberg, 2000
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+45-3815-2530 (Phone)

ZEW Centre for European Economic Research ( email )

P.O. Box 10 34 43
Mannheim, 68034
Germany

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Martin Murmann

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Wolfgang Sofka

Copenhagen Business School

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