Revisiting burns and stalker: Formal structure and new venture performance in emerging economic sectors

Wesley D. Sine, Hitoshi Mitsuhashi, David A. Kirsch

Research output: Contribution to journalArticlepeer-review

248 Citations (Scopus)

Abstract

This study examines the effects of formal structure on the performance of new ventures in the emergent Internet sector during the years 1996-2001. Burns and Stalker (1961) argued that in dynamic economic sectors, firms with organic structures are more effective than those with more mechanistic structures. We suggest this proposition does not hold for new ventures in turbulent, emergent economic sectors. Building on Stinchombe's (1965) arguments concerning new ventures' liability of newness, we hypothesize that new ventures with higher founding team formalization, specialization, and administrative intensity outperform those with more organic organizational structures. Results support these hypotheses.

Original languageEnglish
Pages (from-to)121-132
Number of pages12
JournalAcademy of Management Journal
Volume49
Issue number1
DOIs
Publication statusPublished - 2006 Feb

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

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