Managing Tensions in a High-tech Start-up

Abstract

Answering the question of how enabling technology-based firms manage tensions in their development process, we focus on tensions related to balancing the need to explore new developments for future performance, with the need to exploit existing capabilities to generate sufficient value in the short term. Based on social system theory, we suggest that entrepreneurs use four types of functions to develop their business: goal attainment, pattern maintenance, social networking and economic optimization. Building sustainable firms requires the development of all four functions and the related types of capital (strategic, cultural, economic and social) up to a certain minimum; they must then be balanced in such a way that the exploration—exploitation tension can be dealt with adequately.Through a case study of the development of a sound measuring sensor, we illustrate the four types of functions and the accumulation of capitals by exploring a set of three propositions.

How practice breakdowns disclose existing structures and contribute to practice innovation

“…This is because joint new business activities increasingly takes place in interorganizational relationships, such as buyer-seller relationships, strategic alliances, or innovation networks (Faems, Janssens, Madhok, & Van Looy, 2008;Powell, Koput, & SmithDoerr, 1996;Webster, 1992, Löwik et al, 2012, Pullen, Weerd-Nederhof, Groen & Fischer, 2012Groen, Wakkee, & De Weerd-Nederhof, 2008). This dissertation draws on two empirical case studies.…”

“…Chapter 2 describes an explorative study to the relationship between structure and process within which we adopt a social system perspective (Groen, 2005, Groen et al, 2008Parsons, 1951). Such an approach is useful to help understand how social systems are composed of four functions, with each having its own capital dimension.…”

“…Therefore, in this work tensions can be considered as an important trigger causing a shift from structure to process. From a social system perspective, innovation implies that actors are repeatedly confronted with tensions that arise in these capital dimensions of a given social system due to innovation efforts and to which they need to respond (Groen et al, 2008). The aim of this study is to understand how actors in a business relationship cope with the structural differences in the strategic, cultural, economic, and social capital in the social system of their partner organizations when engaging in a new relationship activity.…”

“…Social system perspective on joint innovation processes. (Parsons, 1951;1964;Groen et al, 2002, Groen 2005, Groen et al, 2008 Complementary capitals developed at the level of partner firms.…”

“…In Chapter 2, we explored the relationship between structure and process from a social system perspective (Groen et al, 2008;Parsons, 1951). We have argued that the strength of a social system perspective is that it allows us to study structure and process dimensions together (Parsons 1977).…”