About the award winning thesis

The rapid advances of IT and the rising trend towards entrepreneurism are encouraging more and more IT startups to enter the marketplace (Del Giudice & Straub, 2011). IT startups contribute to economic growth by driving innovation and by creating jobs. The innovative software and hardware artifacts created by IT startups are changing the ways in which companies in other industries (e.g., healthcare, education) do business. Further, the job creation rate of IT startups is almost twice that of the private sector as a whole (Hathaway, 2013). Despite the contribution of IT startups to our society, the failure rate of IT startups is higher than startups in other industries.

The failure of IT startups may be manifested in a range of facts such as running out of cash, developing an IT innovation without market need, following an inappropriate business model, etc. No matter how they are manifested, leaders should be ultimately responsible for their business failure (Myatt, 2014). That is, leaders must take actions in an effective manner to address the problems or challenges that their startups face. The importance of leaders’ actions, also, has been highlighted in the recent developments in the management literature. Research suggests that, no matter how valuable the resources that a firm possesses, these resources create business value only when leaders use them effectively (Sirmon et al., 2011).

Our research explores how and why leaders’ actions facilitate IT startup development over time. To investigate leaders’ actions in IT startups, we draw on the complexity worldview and the philosophical perspective of critical realism. The complexity worldview represents a dynamic and non-deterministic process that is appropriate to explain IT startup development in the rapidly changing environment (Anderson, 1999; McKelvey et al, 2016). We draw on complexity leadership theory (Uhl-Bien et al., 2007; Uhl-Bien & Marion, 2009) to examine how leaders’ actions facilitate an IT startup’s adaptation to its changing environment. The critical realist perspective focuses on generative mechanisms as the cause of the events that are manifested in an empirical phenomenon (Mingers et al., 2013). We, therefore, identify the mechanisms associated with leaders’ actions that result in empirical observations in IT startup development.

We conduct a critical realist case study to identify the generative mechanisms that underpin the occurrence of leaders’ actions. To investigate the differences in managing different types of IT startups, we compare software startups with hardware/software startups. We collect the interview and the archival data from three startups in each category. We analyze these data by following a step-wise critical realist case study approach (Danermark et al., 2002) that guides us in both identifying the mechanisms that generate leaders’ actions, and in examining how these mechanisms interact with each other during the course of IT startup development.

We identify four mechanisms: adapting, nurturing, stabilizing, and synchronizing. We explain each mechanism in terms of the structure that gives rise to the mechanism, the leaders’ actions that are generated by the mechanism, and the context in which the mechanism is actualized (Smith, 2010). Further, we explain the interdependencies among mechanisms (Archer, 1995). Based on the mechanisms we have identified, we develop a process theory of IT startup development. The theory suggests that structures in IT startups have the power to generate leaders’ actions, and leaders’ actions, in turn, transform structures, thereby enabling IT startups to adapt to the changes in their marketplace over time.

Theoretically, our research investigates an important phenomenon that has received little attention from the IS community. We develop a mid-range, process theory to explain leaders’ actions in IT startup development, and how and why these leaders’ actions facilitate IT startups to adapt continuously to their changing environments. Second, because mechanism based theorizing is needed to explain why complexity leadership occurs in specific circumstances (Uhl-Bien & Marion, 2009), our research identifies the generative mechanisms that underpin three types of complexity leadership (i.e., adaptive leadership, administrative leadership, and enabling leadership). Third, few existing critical realist studies develop a theoretical model based on the generative mechanisms identified. Our explanations of generative mechanisms show the effectiveness of abstracting the reciprocal relationship of structures and actions, thereby leading to a process theory to explain the phenomenon of interest. Fourth, critical realist research lacks clear guidelines for its application to most research methodologies (Wynn & Williams, 2012), except for an existing high-level critical realist case study approach (Danermark et al., 2002). We use this approach in our research into IT startup development and provide additional knowledge in adapting the high-level approach to a specific research context.

Practically, by focusing on leaders’ actions, our research provides leaders with the actionable knowledge that may be readily applied in practice. Second, by examining IT startups from a process perspective, our research provides practitioners with a long-term strategy to facilitate their startups to successfully transit across a series of stages of development.

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References

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Anderson, P., Meyer, A., Eisenhardt, K., Carley, K., & Pettigrew, A. (1999). Introduction to the special issue: Applications of complexity theory to organization science. Organization Science, 10(3), 233-236.
Danermark, B., Ekström, M., Jakobsen, L., and Karlsson, J.Ch. (2002). Explaining Society: Critical Realism in the Social Sciences, London: Routledge.
Del Giudice, M., & Straub, D. (2011). Editor's comments: IT and entrepreneurism: an on-again, off-again love affair or a marriage? MIS Quarterly, 35(4), iii-viii.
Hathaway, I. (2013). Tech starts: High-technology business formation and job creation in the United States. Kauffman Foundation Research Series.
McKelvey, B., Tanriverdi, H., & Yoo, Y. (2016). Complexity and Information Systems Research in the Emerging Digital World. MIS Quarterly Special Issue Call-for-paper.
Myatt, M. (2014). Businesses don’t fail - leaders do. Retrieved from https://www.forbes.com/sites/mikemyatt/2012/01/12/businesses-dont-fail-leaders-do/#369db2f6c97a
Sirmon, D. G., Hitt, M. A., Ireland, R. D., & Gilbert, B. A. (2011). Resource orchestration to create competitive advantage: Breadth, depth, and life cycle effects. Journal of Management, 37(5), 1390-1412.
Uhl-Bien, M., Marion, R., & McKelvey, B. (2007). Complexity leadership theory: Shifting leadership from the industrial age to the knowledge era. The Leadership Quarterly, 18(4), 298-318.
Uhl-Bien, & Marion. (2009). Complexity leadership in bureaucratic forms of organizing: A meso model. The Leadership Quarterly, 20(4), 631-650.
Wynn Jr, D., & Williams, C. K. (2012). Principles for conducting critical realist case study research in information systems. MIS Quarterly, 36(3), 787-810.

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