Institutionalized practices to the rescue! : A qualitative study on how start-ups strive to scale up and achieve growth by working with institutionalized practices

University essay from Uppsala universitet/Företagsekonomiska institutionen

Abstract: Introduction: Since the 1980s and onwards, entrepreneurship and start-ups have exploded. In comparison to more established companies, firms that are defined as start- ups wanting to scale-up are coined by different sorts of vulnerabilities. These can be found in their lack of resources regarding both financial and human capital. Previous research has shown that a greater focus on the work with internal structure and routines, as well as organizational behavior (OB) can make it easier for a company to take on greater challenges and organizational complexity and at the same time be able to grow. Aim: This study aims to get a better understanding of how start-ups strive to scale up and achieve growth by working with institutionalized practices. Method: The study represents a qualitative study where empirical data is gathered from interviews that have been conducted with five managers from three different start-up companies. Results: Though all the companies fall into the same category as start-up business, there are still some clear factors that set them apart from each other. Companies 1 and 3 can be viewed as larger start-ups, while company 2 is comparatively smaller. The companies have similar goals, maximizing profit and steadily trying to grow. Both companies 1 and 3 have adopted a more hierarchical structure to better manage the growing organization, while company 2 has remained a flat organization in order not to stifle the creative flow they feel is supported by this type of organization model. Representatives from company 2 do however express concerns with accountability and the emergence of informal structures related to a lack of oversight and control. Conclusion: The results indicate that a start-up aiming to scale up will go through several phases of creating order. Therefore, with the absence of the institutionalized practices a company will be set up for failure. Working with communication on every organizational level thus becomes important where the manager has a responsibility of putting the employee in focus.

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