Harmony in Hierarchy - A qualitative investigation of TMT impact on organizational performance of startups

Abstract: Entrepreneurship is vital to economic and societal development, prompting an investigation into the success factors of entrepreneurial ventures. Research underscores the importance of founding teams to startups, citing the multiple ways top management teams and its members influence organizational outcomes. Through a qualitative longitudinal study, this thesis aims to analyze the perceived impact of team composition and team effectiveness on performance in tech startups. Furthermore, this thesis aims to discover the perception surrounding the role of team effectiveness on the proven effect between team composition and performance. After conducting interviews with ten founders from different startups, it is evident that the team has a significant perceived influence on organizational performance. Both individual competencies such as previous experience, knowledge, and skill, and the team composition are aspects considered by founders when constructing the team. The perceptions support existing quantitative research on team effectiveness as a mediator between team composition and performance, through an analysis of conditions for team effectiveness and its perceived impact. Further, components not given attention to in prior research, personal relationships, and networks, were shown to be perceived as having a positive impact on team effectiveness and performance of the startup.