Human Resource Management Review 13 (2003) 329 346

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Top management team process, shared leadership, and new venture performance: a theoretical model and research agenda
Michael D. Ensleya,*, Allison Pearsonb, Craig L. Pearcec
a

Department of Management, Belk College of Business, University of North Carolina at Charlotte, 9201 University City Boulevard, Charlotte, NC 28269, USA b Mississippi State University, Mississippi State, MS, USA c Claremont Graduate University, Claremont, CA, USA

Abstract In this paper, we take a behavioral integration perspective [Strategy Leadersh. 25 (1997) 24] in articulating the process through which new venture performance may be explained. In so doing, we integrate concepts from entrepreneurship, top management teams (TMT), group process, and leadership research and propose an input process output model for examining new venture TMT (NVTMT) and new venture performance. More specifically, shared leadership is conceptualized as an important antecedent of our process variablescohesion and collective visionwhich in turn are conceptualized as being positively and reciprocally related and important antecedents of new venture performance. Our model also proposes several moderators that may change the relationships in the model. D 2003 Published by Elsevier Science Inc.
Keywords: Top management team; Leadership; New venture

1. Introduction In this paper, we focus on the potential determinants of high-potential new ventures as opposed to income substitution small businesses. The determinants of high-potential new venture performance have been theoretically proposed and empirically examined for some
* Corresponding author. Tel.: +1-704-687-4343. E-mail address: mdensley@email.uncc.edu (M.D. Ensley). 1053-4822/03/$ see front matter D 2003 Published by Elsevier Science Inc. doi:10.1016/S1053-4822(03)00020-2

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time (Chrisman, Bauerschmidt, & Hofer, 1998; Sandberg & Hofer, 1987). New venture performance has typically been defined along two dimensions: (a) survival and (b) success (Chrisman et al., 1998). Research in this area encompasses a broad range of explanatory variables including the entrepreneur, industry structure, business strategy, environmental conditions, resources, and organizational structure and process. More specifically, many researchers have argued that the entrepreneur is an essential determinant of new venture performance (Carland, Hoy, & Carland, 1988; McClelland, 1961). However, Chrisman et al. (1998) conclude that in spite of research that attempts to establish the entrepreneur as a determinant of new venture performance, the evidence has been inconclusive. Thus, an important purpose of this paper is to articulate a framework for understanding the relationship between entrepreneurs and new venture performance. One possible explanation for the lack of conclusive evidence regarding the role of the entrepreneur in achieving new venture performance is that the unit of analysis has been incorrectly identified. While many researchers have focused on the entrepreneur as a lone individual (Hofer & Sandberg, 1987), others have suggested that the new venture team is, perhaps, a more appropriate level of analysis (Ensley, Pearson, & Amason, in press; Roure & Madique, 1986). Hambrick (1997) concluded that a firms strategic performancehow a strategy is selected and implemented and in turn how the organization performsdepends not so much on the characteristics, behaviors, and background of the chief executive officer (CEO) alone, as it does on the sum of the characteristics, behaviors, and experiences of the entire senior executive group and how they are able to work together to take full advantage of these strengths (p. 25). Perhaps then, the role of the entrepreneur in achieving new venture performance is best captured by examining the new venture top management team (NVTMT) as a whole. While TMT research in established firms abounds (Finkelstein & Hambrick, 1996; Hambrick & Mason, 1984; Knight et al., 1999), little research has focused on the TMT of the new venture. Therefore, our purpose is to develop a theoretical model of new venture performance using a vast body of literature on entrepreneurship, TMT, group processes, and leadership. Our intent, with this model, is to provide a springboard for future research that encourages cross-disciplinary approaches and refocuses attention on entrepreneurial behavior in the creation of new venture performance.

2. Initial research of the NVTMT Eisenhardt and Schoonhoven (1990) studied the characteristics of founding TMT of technology-based ventures as related to sales growth of the new ventures. They justified their focus on the founding TMT, arguing that new ventures are inherently unique and differ from established firms. Following Stinchcombe (1965), Eisenhardt and Schoonhoven established that young firms have a higher propensity to fail and their liabilities of newness present unique challenges to the NVTMT. Additional research that specifically focuses on the TMT of new ventures is limited. However, notable examples include Cooper and Brunos (1977) study of new venture team

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size and high growth, Eisenhardt and Bourgeois (1988) study of new venture team politics and conflict, Roure and Madiques (1986) study of new venture team prior experience and success, and Ensley et al.s (in press) study of NVTMT conflict, cohesion, and performance. Yet, even with this small stream of empirical studies suggesting solid support for the influence of the NVTMT on new venture performance, there exists no comprehensive theory to clarify the processes by which the NVTMT may successfully operate. Therefore, we propose a theoretical model of NVTMT processes that lead to new venture performance, drawing on and extending the upper echelons perspective (Hambrick & Mason, 1984) and integrating much from group and leadership research.

3. The upper echelon perspective and TMT research in established firms Hambrick and Masons (1984) upper echelons theory suggests that top managers have a great impact on the decisions made in firms and ultimately on the outcomes achieved by firms. Hambrick and Mason state that the characteristics of the TMT members are determinants of strategic choices and, through these choices, of organizational performance (p. 197). Priem, Lyon, and Dess (1999) conclude that the upper echelons perspective has been empirically operationalized by researchers measuring demographic differences in the TMT as an explanation of organizational performance. An example of research focusing on the TMT characteristics is Hambrick and Chos (1996) study of TMT in the airline industry. Hambrick and Cho found that TMT heterogeneity in functional background, education, and tenure was positively related to a greater propensity of action by the TMT. However, Priem et al. (1999) as well as others (Reger, 1997; Smith et al., 1994) have raised serious criticism of demographics-focused TMT research. A main criticism is that the research assumes that the demographic predictors are correlated with presumed intervening processes, which remain in the black box (Priem et al., 1999, p. 936). Likewise, Smith et al. (1994) concluded that while researchers had successfully empirically linked TMT demography to performance, researchers had failed to investigate the more fundamental intervening processes (p. 413). Further, Smith et al. argue for more emphasis on the processes by which TMT influence organizational outcomes. Priem et al. also argue that a causal gap exists between TMT demographics and firm performance. They argue that the specific mechanisms through which upper echelons theory suggests that TMT heterogeneity may influence firm performance remain generally unexplored (p. 940). While we agree that demography-based research certainly provides value in understanding TMT performance, we also agree with Priem et al. (1999) that the intervening processes and the intermediate steps of the causal chain provide a clearer picture toward understanding how the NVTMT impacts new venture performance. Adopting this process-oriented perspective, we develop our model of NVTMT performance based on shared leadership, cohesion, and collective vision as the primary determinants of new venture performance.

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Fig. 1. NVTMT process and new venture performance: a research model.

Shared leadership is a mutual influence process between members of the TMT (Pearce & Sims, in press; Perry, Pearce, & Sims, 1999). Cohesion is the sense of belonging and morale present in the TMT (Bollen & Hoyle, 1990). Collective vision is the degree to which the TMT holds a common mental model of the strategy of the organization (Pearce & Ensley, 2000). We also explore contextual variables unique to the new venture that may moderate the primary relationships. These potential moderators include perceptions of opportunity expiration, risk, ambiguity, and resource scarcity. Our model is presented in Fig. 1 and is explained in greater detail below.

4. Linking shared leadership to cohesion, collective vision, and performance 4.1. Shared leadership Yukl (1998) defined leadership as influence exerted. . .over other people. . .in a group or organization (p. 3). Leadership has been linked to effective strategic decision making (Eisenhardt & Bourgeois, 1988; Korsgaard, Schweiger, & Sapienza, 1995; Thomas, 1988) and to entrepreneurial firm performance (e.g., Baum, Locke, & Kirkpatrick, 1998). However, there have been critics of leadership research. For example, Meindl and Ehrlich (1987) have suggested that researchers have a romanticized conception of leadership and that it may not make as much of an impact as all the interest in leadership would suggest. Further, findings in

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the substitutes for leadership literature suggest that such things as professional standards account for more unique variance in criterion variables than does leader behavior (e.g., Podsakoff, Mackenzie, & Bommer, 1996). Nonetheless, the primary emphasis of most leadership theory and research has been on that of the individual leader. For example, many have attempted to understand the personality traits of leaders (e.g., House, 1977). Others have focused on the behavior of leaders (e.g., Sims, 1977). While the extant literature has primarily concerned the role of the individual leader, some recent research has begun to examine the role of coleaders (e.g., Alfred, 1992), followers (e.g., Kelly, 1988), and even communities (e.g., Ukpokodu, 1997) in the leadership process. We propose that one reason why some have concluded that leadership is not particularly important (e.g., Meindl & Erlich, 1987) is that researchers have been, perhaps, overly concerned with the role of the individual to the exclusion of the team in the examination of leadership. Some early research on shared leadership in intrapreneurial teams (e.g., Pearce, 1999) and entrepreneurial teams (e.g., Ensley & Pearce, 2000) suggests that shared leadership is a more important predictor of team effectiveness than simply the leadership exhibited by the team leader. Thus, in this research, we focus on shared leadership as an important antecedent variable in the explanation of new venture performance. 4.2. Shared leadership and cohesion Priem et al. (1999) argue for the use of substantive variables in models to better understand the black box of TMT process. They propose the dimension of power as one possible variable to clarify TMT process. Many researchers have hypothesized about the power of the entrepreneurial leader. For example, Mintzberg and Waters (1985) developed a framework outlining the possible range of power a top manager might exhibit. Again, however, the issues of power and leadership have been only minimally examined in the new venture context. Scully et al. (1994) found that tough financial times result in more stern leadership in a study of high-tech firms. Eisenhardt and Bourgeois (1988) found that organizations where top managers shared power outperformed firms with dominating, powercontrolling managers. Zenger and Lawrence (1989) suggested that when power is controlled by a single, dominant leader, the potential for negative politics increases. Katzenbach (1997) then argues that TMT achieves real team performance when they learn to shift the leader role back and forth depending on needs and demands. He argues that an effective TMT will draw on the leadership ability of each of its members at different times and in different ways. The leaders mantle falls naturally on the shoulders of whichever executive has the knowledge or experience most relevant to the particular issue at hand (p. 86). Leadership of the NVTMT is a key determinant of how strategic choices are made (Manz & Sims, 1993; Yeatts & Hyten, 1998), how team members relate to one another (Nurick, 1993; Pearce & Sims, in press; Perry et al., 1999), and how much politics will play a role in the strategic choice decision making process (Eisenhardt & Bourgeois, 1988; Ferris et al., 1996). Leadership involves the ability and capacity to influence others (Bass, 1990; Yukl, 1998). The exercise of leadership can affect team processes and functioning as

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well as the attitudes, beliefs, and behaviors of team members, all of which ultimately impact organizational strategy (Ensley & Pearce, 2000; Finkeltstein & Hambrick, 1996; Perry et al., 1999). The leadership process in NVTMT is a little researched topic (Baum et al., 1998). Many new venture performance models proposed over the last several years have overlooked the influence of entrepreneurs and their leadership behaviors on the strategy making process (Ensley, 1999). On the other hand, venture capitalists have long understood that the quality of the leadership process in the new venture TMT is of paramount importance (Timmons, 1999). However, this issue has basically gone unexplained in academic research over the past several decades (Kamm, Shuman, Seger, & Nurick, 1990), even though it is the leadership of the NVTMT that has significant impact on the resource levels and ultimately on the growth of young firms (Eisenhardt & Schoonhoven, 1990, p. 506). Thus, we suggest that the leadership of the NVTMT may provide vital insight into NVTMT processes that ultimately result in new venture performance. In a TMT context, there are two potential sources of leadership (Pearce & Sims, in press; Perry et al., 1999): vertical and shared leadership. The term vertical leadership represents the more traditional, hierarchical leadership, wherein a specified leader directs all group activities, feedback, and rewards. Vertical leadership has received considerable attention and support in the literature (Bass, 1990; Manz & Sims, 1989; Yukl, 1998). Vertical leadership is leader behavior exhibited by the designated team leader (Pearce, 1999). The second source, the team practicing shared leadership, has been a focus of emerging research that views the team/group as a potential source of leadership (Barry, 1991; Pearce, 1997, 1999; Perry et al., 1999). Shared leadership is a team process where leadership is carried out by the team as a whole rather than solely by the top executive. By shared leadership, we mean leader behavior exhibited by team members in aggregate (Pearce, 1999). With this type of leadership, the team as a whole shares and participates fully in the tasks of leadership, which Katzenbach (1997) deemed critical to the effective functioning of the team. This includes team members motivating one another, sharing feedback, and directing activities of the team together. Recent findings have demonstrated that NVTMT may be a special case of teams that utilize shared leadership more than other types of teams (Ensley & Pearce, 2000). Shared leadership represents a conceptualization of leadership wherein team members are empowered and leadership responsibilities are shared. Research suggests that when shared leadership occurs, teams are more effective (Barry, 1991; Katzenbach & Smith, 1993; Manz & Sims, 1993; Pearce, 1997, 1999). With shared leadership, teams enjoy greater amounts of collaboration, coordination, cooperation, and innovation (Manz & Sims, 1993, Yeatts & Hyten, 1998) and are better able to interpret group needs such as task interdependence and coordination (Perry et al., 1999). Interestingly, shared leadership has also been found to be an important predictor of new venture performance (Ensley & Pearce, 2000). While there has been significant support for the important role of leadership in organizational functioning, the majority of work on leadership has focused on vertical leadership. Yet, a wealth of theoretical and empirical evidence supports the important role of

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shared leadership (Bass, 1997; Butler & Reese, 1991; Dubinsky, Yammarino, Jolson, & Spangler, 1995; Jolson, Dubinsky, Yammarino, & Commer, 1993; Ross & Offerman, 1997; Tapp, 1996; Tyagi, 1985). Relying solely on vertical leadership in TMT would seem to ignore leadership dynamics within the group context (Barry, 1991, p. 32). In empowered TMT, power and authority are vested in the team itself and the sharing of leadership is a natural outgrowth of vesting power and authority at the team level. In NVTMT, individual members will generally be highly skilled, educated, and self-confident individuals (Ensley, Carland, & Carland, 1999). Thus, collectively, the NVTMT often has the potential knowledge, skills, and abilities to effectively engage in shared leadership. Leadership (Greene & Schriesheim, 1980), especially shared leadership (Pearce & Sims, in press; Perry et al., 1999), has been linked to the development of group cohesion for some time. Shared leadership because of its inherent contribution to the development of group interaction and socialization would have a logical link to cohesion of the NVTMT. Therefore, we offer Proposition 1: Proposition 1: Shared leadership is related to the development of NVTMT cohesion. 4.3. Cohesion and new venture performance Cohesion has been suggested to be the central mediator of group formation, maintenance, and productivity (Bollen & Hoyle, 1990; Lott & Lott, 1965). Cohesion reveals itself not only at the cognitive level of group members but also in their affective state. Cohesion therefore has effects on motivation, morale, and willingness to engage in social and taskrelated activities, group potency, and ultimately performance. Cohesion is thought to facilitate group productivity, while a lack of cohesion is thought to constrain productivity (Greene, 1989). Shaw and Shaw (1962) found that highly cohesive groups spent more time planning and problem solving, whereas low-cohesion groups were rife with social conflict. Research indicates that groups with high cohesion are more likely to have individuals who share uniquely known information (Leana, 1985). Evidence indicates that highly cohesive groups have a high degree of commitment to the group task and to group goals (Klein & Mulvey, 1995). Cohesion has also been positively linked to group effectiveness (Klein & Mulvey, 1995). In a metaanalysis of studies, which looked at a link between cohesiveness and performance, Mullen and Copper (1994) found a relatively small but significant effect. They suggest that commitment to the task is the most critical component of the cohesionperformance link. Overall, the evidence seems to indicate that cohesiveness is a necessary condition for a group to be productive, but it is not sufficient in and of itself. Moreover, studies have shown the benefits of cohesion and a related concept, social integration, to the performance of TMT. Smith et al. (1994) found social integration in the TMT to be directly related to ROI and sales growth. Similarly, Elron (1997) found cohesion of the TMT to contribute to TMT performance on issues such as implementation of decisions and strategies, comprehensive vision, and goals. Taken together, these findings all point to a

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complex web of effects whereby cohesive teams interact more efficiently and disagree more effectively, without arousing the sorts of negative affections that can so undermine TMT performance. This leads us to the development of Proposition 2, which states: Proposition 2: Cohesion within NVTMT is positively related to new venture performance. 4.4. Shared leadership and collective vision Additionally, we argue that with shared leadership in the NVTMT, development of collective vision is more likely than if a vision were simply imposed from an appointed leader, as in vertical leadership. Researchers have described vision as a mental model, cognitive image, or ideal that encompasses a sought after future state (Nanus, 1992; Thoms & Greenberger, 1995). Hambrick (1997) uses the term corporate coherence to represent the collective vision or integrated logic and basis for action within a companyits unity of purpose, its unity of action (p. 24). Katzenbach (1997) alludes to the idea of collective vision when he proposes that teams must be deeply committed to a purpose (p. 84) in order to gain a common sense of direction. The development of vision or collective vision has been attributed to charismatic leadership in past studies (Kirkpatrick, Locke, & Baum, 1998; Thoms & Greenberger, 1995). The direct findings demonstrate that leadership behaviors that are more organic or transformational tend to have higher levels of understanding of the firms vision (Baum et al., 1998; Hewson, 1997; Larwood, Falbe, & Miesing, 1995). As Burns (1978) described transformational leadership as a case in which leaders and followers raise one another to higher levels of morality and motivation (p. 20), shared leadership would then be the next logical step in the development and creation of collective vision. Shared leadership includes efforts to motivate each other and create a leadership dynamic in which all are responsible for the task of leadership. We would argue that it is only logical that shared leadership is more closely related to collective vision than is vertical leadership. Team members would surely have greater understanding of something that they helped to create (Vroom & Yetton, 1973) rather than just had communicated to them to follow. Thus, we posit that shared leadership is an important antecedent of collective vision in NVTMT. Therefore, we deliver Proposition 3: Proposition 3: Shared leadership in the NVTMT is positively related to higher levels of collective vision. 4.5. Collective vision and new venture performance When shared leadership occurs and results in collective vision, what are the likely outcomes? Emerging work on self-managing work teams strongly suggests that group selfleadership (Manz & Sims, 1993), team self-leadership (Stewart & Barrick, 2000), distributed leadership (Barry, 1991), or shared leadership (Katzenbach & Smith, 1993; Pearce, 1997,

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1999) are strongly associated with more effective teams. For example, the Katzenbach and Smith (1993) in-depth study of teams showed that high-performance teams actively engaged in shared leadership much more than other teams and Pearce (1997) found shared leadership to be an important predictor of intrapreneurial team effectiveness. The importance of this issue was highlighted by Yukl (1998), who designated the most important current controversy as heroic versus shared leadership (p. 504). He states: The extent to which leadership can be shared. . .the success of shared leadership, and the implications [of shared leadership] for design of organizations are important and interesting questions that deserve more research. As yet, we have only begun to examine these research questions (p. 504). Accordingly, we define collective vision as the commonly held mental model of the desired future state of the group that provides the basis for planning, goal setting, coordination, and motivation within the group. In our definition of collective vision, we focus on the clear articulation and understanding of the desired future state of the team, which we proposed to take place via shared leadership. Baum et al. (1998) found CEO vision to have an effect on firm performance; however, the link between collective vision and new venture performance has yet to be articulated. Because of the recent findings of Baum et al. and the role of collective vision in achieving performance (Pearce & Ensley, 2000; Timmons, 1999), we include the concept of collective vision as an important predictor of new venture performance. Amason (1996) stated that collective vision is a group-level understanding of the reasoning behind a decision, which allows each of the individual team members the ability to act independently but in a way that is consistent with the essence of the decision. It is this deep understanding that helps team members articulate their mental models more fully, which in turn has been shown to increase team success (Carley, 1997). Thus, we posit the following: Proposition 4: Collective vision within NVTMT is positively related to new venture performance. 4.6. Cohesion and collective vision Finally, we argue that cohesion and collective vision are positively and reciprocally related. Hambrick (1997) argued that teams need both cohesion and collective vision, which he labeled behavioral integration to be effective. These two processes tend to increase each other. When both cohesion and collective vision are present in the team, the team is sharing information, acting in a collaborative fashion, making joint decisions, and sharing resources. This dynamic interplay, enhanced by the presence of both collective vision and cohesion, likewise helps to further develop and increase both. Therefore, we propose: Proposition 5: Collective vision of the NVTMT will increase levels of cohesion and the cohesion of the NVTMT will in turn increase collective vision.

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5. Potential moderating effectsthe context of the new venture Several researchers have suggested that moderators are needed to fully understand TMT performance (Ancona & Caldwell, 1989; Hambrick, 1994; Simons & Pelled, 1999). To understand and explore potential moderators of the NVTMT process, we must begin by examining the unique context in which new ventures exist. Chrisman et al. (1998) argue that the importance and form of decisions and problems faced by the new venture are unique from those experienced in established firms. New ventures are different from established firms in regard to their age, history, and size. Additionally, new ventures have no existing strategy from which to operate (Mintzberg, 1978). In the beginning, new ventures must focus instead on merely surviving. In fact, Stinchcombe (1965) noted that many new ventures fail because they are unable to make adjustments quickly enough. As roles change and working relationships must be altered to address problems, the resulting uncertainty and ambiguity cause organizational members to fail to adjust properly and quickly enough for the firm to survive. Many of these issues of the liability of newness have been supported by research (Freeman, Carroll, & Hannan, 1983). We argue that these contextual variables brought forth and enhanced by the liability of newness experienced by new ventures may be the forces that are able to derail new venture performance. However, we propose that these effects are best modeled as potential moderators of the relationship between shared leadership cohesion, collective vision, and ultimately new venture performance. Clearly, it is also possible to conceive of these variables as moderators of the relationship between team process and firm performance. However, for reasons of parsimony, we do not present them as such in our model. Nonetheless, we would encourage the investigation of the later as well. 5.1. Resource scarcity The classic approach to strategy formulation begins with an assessment of organizational competencies and resources (Andrews, 1971). If some of these competencies and resources are unique or superior in comparison to competitors, they can be considered a source of competitive advantage (Andrews, 1971; Peteraf, 1993; Thompson & Strickland, 1990). Resources that are matched effectively to environmental opportunities and strategy create opportunities for high performance (Odd, Huse, & Senneseth, 1999; Snow & Hrebeniak, 1980). NVTMT has few resources with which to work; therefore, every resource allocation is a risk (Chrisman, 1999). Resource-based theory is a potential framework for understanding resource utilization in light of the specific contextual environment of the new venture (Barney, 1991; Wernerfelt, 1984). New ventures have few resources, and those which they do possess tend to be focused on a single strategic accomplishment or are not yet committed to an organizational framework (Becker & Gordon, 1966; Stevenson & Gumpert, 1985). Therefore, the NVTMT members must make careful decisions regarding prioritization of scarce resources, recruitment of partners, and resource combinations (Becker & Gordon, 1966; Carson, 1982; Van De Ven, 1993). More specifically, for the new venture,

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Greene et al. define five theoretically derived resource categories: human, social, organizational, physical, and financial capital (Brush & Greene, 1996; Greene & Brown, 1997; Greene, Brush, & Hart, 1999). These researchers note that all of these resources tend to be in short supply. Since human capital includes TMT members experience (Greene et al., 1999), it is clear that an immense amount of pressure is exerted on NVTMT. Because of the shortage of resources, NVTMT does not have a great deal of latitude in making decisions. The lack of key resources essentially holds the new venture to a minimal number of strategic or tactical errors. This adds immense pressure to the strategic decision making process. 5.2. Risk levels Traditionally, risk is viewed as one of the major factors in the development of new ventures and their potential rates of return. However, the fact that greater levels of risk exist does put substantial pressure on the NVTMT. While some find that risk does not exist in a general sense for entrepreneurs (Simon, Houghton, & Aquino, 2000), it is clear that risk from lack of proper capitalization levels and managerial competence does exist (Bird, 1989; Busenitz, 1999; dAmboise & Muldowney, 1988; Stevenson & Gumpert, 1985). Capital, or the lack thereof, is certainly a source of risk and stress to the new venture team (Dollinger, 1995; Grant, 1991; Hofer & Schendel, 1978). Traditionally, new venture funding comes from personal finances, family, and friends (Shulman, 1997). The risk inherent in a new venture in terms of a lack of track record, small size, and unascertained future often scares off extra money that may be found through external funding (Aldrich & Auster, 1986; Stinchcombe, 1965). While these types of risks exist in a form in established firms, they do not exist at the same levels they do in new ventures. 5.3. Time The idea that certain opportunities exist in the marketplace is at the core of entrepreneurship (Timmons, 1999). Entrepreneurship involves taking planned advantage of opportunities that arise. Entrepreneurs often have to act quickly to take advantage of windows of opportunity and start their own firms (Hambrick & Crozier, 1985; Reynolds & Miller, 1992). Because of these small opportunity windows, data collection about risk probabilities in order to make informed decisions regarding risk-return combinations is largely unfeasible due lack of time and data resources (Gilmore & Kazanjian, 1989; Shapira, 1995). The findings here show that time for taking advantage of new venture opportunities is limited. These limits could certainly stress the NVTMT. Not only do decisions have to be made correctly, but also because of the lack of resources they have to be made quickly and with a great tolerance for risk. Entrepreneurs that have dreams of a future envisioned state tend to have some idea that faster is better than slower and that sooner is better than later (Bird & West, 1997).

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5.4. Ambiguity in new ventures New ventures by their definition are ambiguous creatures. Morris and Zahra (2000) defined ambiguity as being present when situations have inconsistent features, contradictions, or paradoxes (p. 94). Most entrepreneurial ventures have some amount of these elements, almost without exception. New ventures have been called chaotic in their nature (Bygrave, 1989a, 1989b). Specifically, Bygrave calls new ventures unstable, nonlinear discontinuities. Because of the chaotic nature of entrepreneurship, there have been calls for more chaotic theory more than a decade ago (Stevenson & Harmeling, 1990). NVTMT then faces relatively high levels of uncertainty. This level of ambiguity must change the way in which these teams interact with each other. McCaskey (1982) refers to the executive challenge as consisting of problematic information gathering, multiple possible interpretations of events, and a lack of adequate time or resources. This executive challenge is much higher in new ventures than in established firms. We do not wish to imply that we think these contextual variables are separate. Das and Bing-Sheng (1997) were clear that time and risks are related phenomena. However, we have drawn these variables out in order to make better sense of their role in team dynamics and firm performance. We understand that risk is higher after others have entered certain market space and that ambiguity and resource constraints contribute to risk and time pressures as well. However, we are trying to draw attention to these variables as potential moderators of NVTMT behaviors and ultimately firm performance. 5.5. Specific moderators of the NVTMT process Fear, pressure, and panic caused by resource and time constraints, high levels of ambiguity, and high levels of risk may lower the ability of NVTMT to encourage or display higher cohesion levels. As focus is forced to shift to the problems at hand, less emphasis may be placed on behavioral integration, thereby reducing both cohesion and collective vision. Time pressures may reduce the teams ability to share information and knowledge and ultimately their ability to act in a collective sense. We know from several researchers (Dollinger, 1995; Grant, 1991; Greene et al., 1999; Hofer & Schendel, 1978) that limited resources cause stress in new ventures. Research on ambiguity has shown that it is one of the great executive challenges and the cause of great stress to the TMT (Bygrave, 1989a, 1989b; McCaskey, 1982; Morris & Zahra, 2000). Risk in new ventures has also been shown to be a cause of great stress and strife among the NVTMT (Bird, 1989; Busenitz, 1999; dAmboise & Muldowney, 1988; Stevenson & Gumpert, 1985). Finally, research has shown that time pressures cause stress for NVTMT (Bird & West, 1997; Gilmore & Kazanjian, 1989; Hambrick & Crozier, 1985; Shapira, 1995; Reynolds & Miller, 1992). Greene and Schriesheim (1980) demonstrated that stressors do moderate the relationship in work groups. We believe that those findings

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are potentially generalizable to NVTMT. Therefore, we offer the following set of propositions: Proposition 6A: The relationship between shared leadership and NVTMT cohesion will be moderated by the perceived risk of opportunity expiration. Proposition 6B: The relationship between shared leadership and NVTMT cohesion will be moderated by the perceived risk of financial loss. Proposition 6C: The relationship between shared leadership and NVTMT cohesion will be moderated by the perceived level of ambiguity in the firms environment and business concept. Proposition 6D: The relationship between shared leadership and NVTMT cohesion will be moderated by the perceived level of resource scarcity. While there is less empirical evidence to support the same moderator effects on the relationship between shared leadership and collective vision, there is a logical basis to suggest that such effects should exist. The creation of vision in the midst of chaos would certainly be more difficult than it would in more placid environments. While charisma has been consistently found to effect what people believe, would one not expect that ambiguity, risk, and resource and time constraints could cause members of a TMT to question the direction of the firm and interpret certain outcomes or actions differently? As Morris and Zahra (2000) found, the fact that ambiguity exists implies that the meaning for each of the members of a TMT could be different. On the other hand, it is during crises that the role of leadership attains greater importance (House, 1977). Findings of past research suggest that leadership behaviors that are more organic tend to generate higher levels of sharing in the firms vision (Baum et al., 1998; Hewson, 1997; Larwood et al., 1995). It is our contention that the context of the new venture makes these relationships more complex. Therefore, we offer the following propositions: Proposition 7A: The relationship between shared leadership and NVTMT collective vision will be moderated by the perceived risk of opportunity expiration. Proposition 7B: The relationship between shared leadership and NVTMT collective vision will be moderated by the perceived risk of financial loss. Proposition 7C: The relationship between shared leadership and NVTMT collective vision will be moderated by the perceived level of ambiguity in the firms environment and business concept. Proposition 7D: The relationship between shared leadership and NVTMT collective vision will be moderated by perceptions of resource scarcity.

6. Conclusion We have provided a basic model of NVTMT process constructs and their relationship to new venture performance. In addition, we have addressed at least a portion of the contextual

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variables that may serve to moderate the development of positive TMT processes particularly in the new venture environment. We consider our model an exploratory attempt to begin to address the intervening constructs that Priem et al. (1999) suggest have been absent from TMT research. As Priem et al. conclude, when these variables are omitted, incomplete and error-prone conclusions, devoid of understanding, are likely (p. 950). Most of all, our desire was to create a model of new venture performance that may stimulate cross-disciplinary research and provide a renewed focus on entrepreneurs and entrepreneurial behavior in the explication of new venture performance.

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