The changing role of the entrepreneurial founder in emerging fast-growth firms: a conceptual model
2017-02-17T02:22:09Z (GMT) by
Despite the continuing fascination with emerging fast-growth firms and their entrepreneurial founders, our knowledge about how these firms grow into sustainable entities is limited. Building sustainable firms is fraught with many dangers, takes a great deal of hard work and is of particular concern to their founders. The concept of ‘firm sustainability’ is explored and developed within the context of this study. The role of the founder in a newly established and rapidly growing firm is critical. Founders have considerable impact on their firms’ overall performance, especially in the first few years of the firm’s existence. However, for firms to grow and succeed, founders must rely on others, particularly other managers, to perform a range of operational, administrative and other critical activities. This implies that their own roles will change as their firms grow in size and complexity. While existing literature deals with the professed problem of the founder not being able or willing to ‘let go’ as his or her firm grows, the topic has not been adequately addressed by academic researchers, particularly within the context of emerging fast-growth firms where time and financial pressures on the founder can be intensive. For firms with two or more founders, their individual roles are likely to be forged, among other things, by the respective role each founder plays. The development of organisational resources and capabilities, including human resource management (HRM), is also linked to the founder’s changing roles. The principle research question examined in the study is: How do entrepreneurial founders of emerging fast-growth firms use organisational resources and capabilities to achieve firm sustainability? In support of this principal research question, four subsidiary research questions also asked are: What is firm sustainability and is it important? In what way do entrepreneurial founder roles change as the firm achieves sustainability? Which organisational resources and capabilities are important for firm sustainability and how are they developed? Are HRM practices important for firm sustainability and, if so, why are they important? Based on qualitative research methods and a case study strategy, the research begins as an exploratory study. One-on-one semi-structured interviews were conducted with founders and other managers of three privately owned Australian emerging fast-growth firms each with two founders. Consequently, a theoretically and empirically based conceptual model is developed to specifically address how the founder’s role evolves, how organisational resources and capabilities develop, and how HRM practices are applied as the firms become sustainable. There are three important findings regarding changing entrepreneurial founder roles arising from the study: first, the evolving and dynamic relationship between the co-founders; second, the human capital of the individual founders; third, the founders’ time allocations and constraints. Furthermore, at the firm level, HRM resources and capabilities (such as selection and recruitment, the management team and performance management) were also found to have important effects on changing founder roles. The thesis, therefore, demonstrates how evolving founder roles and developing organisational resources and capabilities, including HRM, are closely connected. These linkages are explored using case studies within the context of emerging fast-growth firms that have become sustainable. The study addresses gaps in our knowledge by developing a conceptual model to explain how founder roles change. The thesis uniquely contributes to theoretical knowledge by bringing together entrepreneurship, managerial and organisational studies, the resource-based view of the firm, and HRM and role theory to illuminate the evolving entrepreneurial founder roles in emerging fast-growth firms.