A Contextualized Transactive Memory System View on How Founding Teams Respond to Surprises: Evidence from China

Abstract

Entrepreneurs in emerging economies face not only more opportunities but also heightened levels of uncertainties than their peers in developed economies. They, therefore, frequently encounter surprising events arising from rapid and chaotic environmental changes. Extant research, however, provides only sketchy accounts regarding how founding teams respond to surprises. In this study, we propose that founding teams' transactive memory systems (TMS) situated in the unique contextual conditions prevalent in most emerging economies will affect their perceptions regarding how to bridge the knowledge gaps arising from surprises. We test our hypotheses with survey data collected from 137 start-ups in China. Our results suggest that in emerging economies where market supporting institutions are deficient, founding teams with strong TMSs are less inclined to acquire external knowledge but are more prone to improvise in response to surprises than founding teams with weak TMSs. Negative surprises seem to strengthen the above relationships. We conclude by discussing the theoretical and practical implications of this study.

Strategy development: Driving improvisation in Malaysia

“…Yet the opposite holds under low turbulence, where organization-wide learning triggers improvisation in 20 line with Mintzberg's (1994) assertion that emergent decision-making develops as a result of learning. This supports the value of information systems for firm improvisation in Asia (Zheng & Mai, 2013) and offers critical insight into the role of turbulence. The interplay between organizational flexibility and learning remains unclear despite propositions in extant improvisation theory.…”

“…The potential for learning effectiveness, however, may be limited in collectivist contexts where decisions are centralized and dominated by highstatus managers to the exclusion of other organizational members, resulting in reduced creativity (Chi et al, 2009) and thus increased improvisation. However, Chinese firms that utilize learning mechanisms to store knowledge and provide access to existing knowledge stocks for decisionmakers have been found to improvise in response to surprising events (Zheng & Mai, 2013).…”

“…As a result, the drivers of improvisation in the different competitive settings of emerging economies remain unexplored. With higher levels of uncertainties than their peers in developed economies and greater frequency of 2 surprising events, arising from rapid and chaotic environmental changes (Zheng & Mai, 2013) the apparent need for firms to adapt to their environment gives rise to our research question:…”

“…As a result, the drivers of improvisation in the different competitive settings of emerging economies remain unexplored. With higher levels of uncertainties than their peers in developed economies and greater frequency of 2 surprising events, arising from rapid and chaotic environmental changes (Zheng & Mai, 2013) the apparent need for firms to adapt to their environment gives rise to our research question:what drives organizational improvisation in an emerging economy under conditions of turbulence?Focusing on this research question, we argue that managerial and organizational characteristics directly affect organizational improvisation, and also competitive turbulence impacts the relationships between different internal characteristics and improvisation in different ways. This article thus responds to calls for research issued by Nemkova et al (2012) for study into the antecedents of improvisation, and by Kyriakopoulos (2011) andWright, Filatotchev, Hoskisson, andPeng (2005) to extend the study of strategy and organizations to a wider range of settings to examine the extent to which theories in developed economies are suited to the characteristics and actions of firms in emerging economies.…”

Knowledge Management in Startups: Systematic Literature Review and Future Research Agenda

“…In fact, each part of a complex system may have different kind of relationships with other parts that are not formalized but easy to understand within project teams. Zheng and Mai (2013) [51] analyze the use of founding teams' transactive memory systems (TMS) to influence the way through which startup's members acquire, store and share knowledge. The authors conduct a survey data involving 137 Chinese startups to show that in emerging countries where market supporting institutions are deficient, founding teams with strong TMSs are less inclined to acquire external knowledge but are more prone to improvise in response to surprises than founding teams with weak TMSs.…”