The 4 Main Tensions in Start-ups

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The 4 Main Tensions in Start-ups
Paula Kokare, Premium Member
Wakee and De Weerd-Nederhof (2008) researched what types of functions or "capitals" (high-tech) start-ups are facing - and need to manage, balance and overcome - during their rapid growth phase. These four fundamental functions/capitals include:
  • GOAL ACHIEVEMENT FUNCTION / STRATEGIC CAPITAL: includes capabilities/capital that enable actors to decide about the direction to develop and enforces alignment of resources to achieve certain goals. Examples of these include power, ability to dominate, social role and position.
  • PATTERN DEVELOPMENT AND MAINTENANCE FUNCTION / CULTURAL CAPITAL: represents the identity of the organization in the form of the culture and artifacts supporting it to encourage learning and development.
  • ECONOMIC FUNCTION / ECONOMIC CAPITAL: defined as potentially accessible resources and benefits that would be available to the organisation in case of economic exchange between the start-up and the environment.
  • SOCIAL FUNCTION / SOCIAL CAPITAL: resources, which enable access to other assets controlled by outside players and organisations
The authors in their work evidenced following patterns in coping with the demands on start-ups to meeting these 4 demands:
  1. Start-ups have to develop all four types of functions and capitals simultaneously to a certain level to enable survival and success of the enterprise.
  2. Success in one of the functions to a certain degree allows leveling-off weaker performance in another (e.g. social connections in the short term may provide access to economic capital).
  3. However, complete failure in one of the functions cannot be solely replaced by successes in other functions.
Groen, A., Wakkee, I. and De Weerd-Nederhof, P. (2008). Managing Tensions in a High-tech Start-up: An Innovation Journey in Social System Perspective. International Small Business Journal, 26(1), pp.57-81.



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