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The organizational design of high-tech startups and product innovation

Christoph Grimpe, Martin Murmann and Wolfgang Sofka ()

No 17-074, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We investigate whether appointing a middle management level affects startups' innovation performance. Additional hierarchical levels are often suspected to restrict innovative activities. However, founders' capacities for information processing and resource allocation are usually strongly limited while, at the same time, R&D decisions are among the most consequential choices of startups. We argue that middle management is positively related to introducing product innovations because it improves the success rates from recombining existing knowledge as well as managing R&D personnel. In addition, we suggest that the effectiveness of these mechanisms depends on the riskiness of a startup's business opportunity. Based on a sample of German high-tech startups, we find support for our conjectures.

Keywords: middle management; innovation performance; R&D; startups; organizational design; R&D management (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-sbm and nep-tid
Date: 2017
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