eThesis - School of Business electronic theses

Culture is an important factor in the performance of organizations. The role of culture is magnified in high-tech, high growth startup companies due their operating environment as defined by extreme uncertainty. Culture in this context is seen to provide stability ensuring the organizations external ability to survive and ensuring internal cohesion. Organizational culture is also affected by path-dependency. This is why the role of founders in moulding organizational culture at the very outset of a new venture is paramount to its success. Yet this represents a significant research gap in current literature.

Research Question: How do founders of startup companies view and actively work to create, and maintain, well functioning collective constructions of culture?

To answer this question an analytical framework was developed based on existing theoretical conceptualisations of organizational culture. A dynamic evolutionary model for understanding organizational culture was developed to support an empirical foray into the research question and supporting questions.

Five founders were interviewed in a multiple case study, focusing on the founding stories of the entrepreneurs' companies and critical incidents (crises) throughout their development, which are seen to be watershed moments in the development of organizational culture. Four of five founders reported an explicit focus on culture at the founding of their companies. Meanings were gleaned from following critical incidents and the effects of founder actions compared in the context of the analytical framework developed. All founders recognized path dependencies in how their cultures evolved and the tensions inherent therein due to a lack of focus on cultural issues at the outset. Hiring was seen as the most important and difficult founder activity in terms of managing organizational culture. It seems that path-dependence in the evolution of culture is real according to the accounts of startup founders. Entrepreneurs therefore need to focus on culture at the very outset of setting in motion a new venture, to ensure the organisations durability, adaptability and ability to survive in the long run.