Revisiting burns and stalker: Formal structure and new venture performance in emerging economic sectors

Wesley D. Sine, Hitoshi Mitsuhashi, David A. Kirsch

Research output: Contribution to journalArticle

216 Citations (Scopus)

Abstract

This study examines the effects of formal structure on the performance of new ventures in the emergent Internet sector during the years 1996-2001. Burns and Stalker (1961) argued that in dynamic economic sectors, firms with organic structures are more effective than those with more mechanistic structures. We suggest this proposition does not hold for new ventures in turbulent, emergent economic sectors. Building on Stinchombe's (1965) arguments concerning new ventures' liability of newness, we hypothesize that new ventures with higher founding team formalization, specialization, and administrative intensity outperform those with more organic organizational structures. Results support these hypotheses.

Original languageEnglish
Pages (from-to)121-132
Number of pages12
JournalAcademy of Management Journal
Volume49
Issue number1
Publication statusPublished - 2006 Feb
Externally publishedYes

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Economics
Internet
New venture performance
Economic sectors
New ventures
Formalization
World Wide Web
Liability of newness
Organizational structure

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)

Cite this

Revisiting burns and stalker : Formal structure and new venture performance in emerging economic sectors. / Sine, Wesley D.; Mitsuhashi, Hitoshi; Kirsch, David A.

In: Academy of Management Journal, Vol. 49, No. 1, 02.2006, p. 121-132.

Research output: Contribution to journalArticle

Sine, Wesley D. ; Mitsuhashi, Hitoshi ; Kirsch, David A. / Revisiting burns and stalker : Formal structure and new venture performance in emerging economic sectors. In: Academy of Management Journal. 2006 ; Vol. 49, No. 1. pp. 121-132.
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