Degree
Doctor of Philosophy (PhD)
Department
Rucks Department of Management
Document Type
Dissertation
Abstract
Startups, driven by entrepreneurs' ambitions to achieve their ideas, frequently grapple with decision-making and control issues. Rather than adhering to stringent planning frameworks, entrepreneurs tend to prioritize rapid decision-making with optimistic expectations for the future. The involvement of external funders, motivated by high financial return expectations, exerts additional pressure on this decision-making process. This dynamic, compounded by the absence of control mechanisms typical of publicly traded companies, poses distinctive governance challenges for startups, often making them susceptible to discrepancies between entrepreneurs' promises and the outcomes they can achieve. This dissertation investigates the role of employee ownership in relation to decision-making and control issues in startups through 33 in-depth interviews with executives from employee-owned startups. While findings reveal benefits such as mitigating over-promising via the distribution of accountability and risks among employee owners, they also highlight potential drawbacks, including slower decision-making that may conflict with the agile nature of startups. Additionally, my findings identify practices that employee-owned startups can adopt to maintain agile decision-making and control. Overall, the findings of my study provide insights into the role of employee ownership in startup governance. My dissertation expands the literature on over-promising in startups by examining the role of participatory and representative governance elements among empowered employee owners. Additionally, this dissertation enhances the understanding of over-promising in startup governance by showing that the planning fallacy (i.e., failing to fulfill promises due to inherent unpredictability despite having no deliberate intention to do so) or misrepresentations may not fully account for unfulfilled promises in this context. My research suggests that biased decisions, such as over-promising, can be intentionally crafted and supported by both entrepreneurs and other stakeholders. Finally, my dissertation sheds light on decision-making and control within employee ownership models, revealing the limitations of this model in agile startup environments and suggesting agile practices to address these challenges.
Date
7-14-2024
Recommended Citation
Yetim, Mehmet A., "From Fallacy to Agility: The Role of Employee Ownership in Startup Governance" (2024). LSU Doctoral Dissertations. 6520.
https://repository.lsu.edu/gradschool_dissertations/6520
Committee Chair
Cirik, Kubilay