The Structure of Founding Teams: Homophily, Strong Ties, and Isolation among U.S. Entrepreneurs

Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.The mechanisms governing the composition offormal social groups (e.g., task groups, organizationalfounding teams) remain poorly understood, owing to (1) a lack of representative sampling from groups found in the general population, (2) a "success" bias among researchers that leads them to consider only those groups that actually emerge and survive, and (3) a restrictive focus on some theorized mechanisms of group composition (e.g., homophily) to the exclusion of others. These shortcomings are addressed by analyzing a unique, representative data set of organizational founding teams sampled from the U.S. population. Rather than simply considering the properties of those founding teams that are empirically observed, a novel quantitative methodology generates the distribution of all possible teams, based on combinations of individual and relational characteristics. This methodology permits the exploration offive mechanisms of group composition-those based on homophily, functionality, status expectations, network constraint, and ecological constraint. Findings suggest that homophily and network constraints based on strong ties have the most pronounced effect on group composition. Social isolation (i.e., exclusion from a group) is more likely to occur as a result of ecological constraints on the availability of similar alters in a locality than as a result of statusvarying membership choices. SOCIOLOGISTShave made major strides toward understanding the conditions under which new organizations and new organizational forms are created, as well as the kinds of social locations that are most likely to spawn their creators. Beginning with Max Weber's ([1904-1905] 1992) analysis of ascetic Protestantism's contributions to the entrepreneurial spirit, sociologists have offered both macro-and microlevel interpretations of entrepreneurial

What determines the innovation capability of firm founders?

“…This result has important implications for further research on founding teams. Many empirical studies come to the conclusion that there is a natural tendency of founding teams to prefer a homogeneous than a heterogeneous composition, even if homogeneity is not conducive to performance (see Ruef et al, 2003 and the discussion of this issue there).…”

Only the lonely? The influence of the spouse on the transition to self-employment

“…Yet, these studies are alike in their insistence that entrepreneurship is an interactive process between the individual and the environment and that situational factors foster or impede the self-employment process beyond factors which can be explained by individual characteristics. Along these lines, socio-economic contextual units, such as organization (Ruef, Aldrich & Carter, 2003), industry (Carroll & Mayer, 1986;Bates, 1995) and regions (Sorenson & Audia, 2000) have become domains of repeated inquiry.…”

A New Twist on an Old Approach: A Random-Interaction Approach for Estimating Rates of Inter-Group Interaction

“…Though groups are able to form along many different dimensions of social life, race and ethnicity represent two of the more salient dimensions for fostering group identity. Patterns of friendship networks among adolescents (Hallinan and Williams 1989;Moody 2001;Moody and White 2003;Mouw and Entwisle 2006;Quillian and Campbell 2003), the formation of work teams within organizations (Hinds et al 2000;Ruef et al 2003), and inter-group marriage (Alba and Golden 1986;Gray 1987;Jones 1991;South and Messner 1986) have all been examined with a focus on the rate of intra-and inter-racial interactions. With violence being a ubiquitous feature of urban centers, and given the significant change in the demographic composition of cities over the last half century, it is not surprising that rates and patterns of intra-and inter-personal violence have also garnered much attention.…”