ENTREPRENEURIAL TEAMS: THEORETICAL FRAMEWORK AND METHODOLOGY PROPOSAL APPLIED TO AN EXPLORATORY CASE STUDY Martine Hlady Rispal Maître de Conférences Université Montesquieu Bordeaux IV IRGO Lab., « Entrepreneurship and strategy » team 35, Av. 35, Avenue Abadie, 33 072 BORDEAUX Cedex, France Tel. + 556009664, Fax +556009643 Email:
[email protected] Jérôme Boncler Maître de Conférences IUT Bordeaux Montesquieu, Université Montesquieu Bordeaux IV IRGO Lab., « Entrepreneurship and strategy » team 35, Av. 35, Avenue Abadie, 33 072 BORDEAUX Cedex, France Tel. + 556009668, Fax +556009643 Email:
[email protected] Thierry Verstraete Professeur Université Montesquieu Bordeaux, associé à Bordeaux Ecole de Management, Directeur des programmes de recherche de l’équipe E&S IRGO Lab., « Entrepreneurship and strategy » team 35, Av. 35, Avenue Abadie, 33 072 BORDEAUX Cedex, France Tel. + 556009668, Fax +556009643 Email:
[email protected]
With the financial participation of the CGSCOP (General Confederation of SCOP co-operatives) Abstract Entrepreneurship can begin on the initiative of several people who join together to exploit a business opportunity. From the researcher’s perspective, it must be noted, on the one hand, that the entrepreneurial team is an object of research that is not sufficiently studied whereas the association of several individuals undertaking together is not rare and, on the other hand, that the concept of the entrepreneurial team amalgamates with that of collective entrepreneurship, even more largely with any form of actors meeting together to serve the act of undertaking. Hence the need of a theoretical framework for the entrepreneurial team that only research activity can bring. The objective of our communication is to contribute to the clarification of this field. The analysis is based on findings from an ongoing research project investigating the key factors influencing a collective entrepreneurial process in French SCOPs (Co-operative Production Companies “CPC”).
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INTRODUCTION
Entrepreneurship does not exclusively focus on the isolated individual creating a company. The latter can be set up on the initiative of several people who join together to exploit a business opportunity. It is often the case during the creation of an innovating company, in particular when a research valorisation process is implemented. This association poses a set of problems which sometimes present disadvantages, sometimes advantages, and sometimes a mixture of both. So are the meeting of competences, the multiplicity of the financial or contributions in kind, the distribution of decision-making functions and entrepreneurial activities, the sharing of efforts and responsibilities, the sharing of power and leadership, the confrontation of different points of view, of cognitive interactions for strategic vision construction having to become paradigmatic, etc. From the researcher’s perspective, it must be noted, on the one hand, that the entrepreneurial team is an object of research that is not sufficiently studied whereas the association of several individuals undertaking together is not rare and, on the other hand, that the concept of entrepreneurial team amalgamates with that of collective entrepreneurship, even more largely with any form of actors meeting together to serve the act of undertaking, or as soon as an initiative is taken by a group of individuals.
The entrepreneurial team is sometimes not distinguished from the management team (even if the two concepts can overlap). In an entrepreneurial team, the members meet to launch, take over or even develop a business. This association can take shape during the emergence of the idea, as of the starting of the commercial activities, or later, because it can happen that one of the entrepreneurs joins the other (or others) when the business has already started. This conception of the entrepreneurial team seems to reserve the terminology primarily to the founders devoting themselves entirely to the created, taken over or developed entity. But it can possibly extend to some other people who have joined them, for example an “intrapreneurial”employee, or even in certain cases an employer that will carry a project beyond the borders of the initial entity (firm spin-offs). In this case, one can sometimes speak of collective entrepreneurship, which is expressed by an organisational context in which this entrepreneurship is deployed. For example, this context is not inevitably reduced to the borders of an entity when it is extended to an industrial (ex: network) or an 2
institutional (ex:
the university spin-off) environment allowing entrepreneurial
projects to become concrete. It is a question in this case of undertaking together, or of acting together to favour the entrepreneurial phenomenon. Our communication points to the need for a theoretical framework of the entrepreneurial team. This framing seems all the more necessary since the literature delivers very diverse representations leading to a delimitation that lacks coherence. On the theoretical level, the paper aims at clarifying the concepts of the entrepreneurial team, collective entrepreneurship and top management teams, still too vague today. We then formulate our research statements as well as a model of the entrepreneurial phenomenon conceptualized by one of the authors in order de guide empirical data collection. We subsequently study the case of a SCOP (Co-operative Production Company) in order to illustrate the research statements. Our operational and exploratory frame is presented. Thanks to a series of questions on the entrepreneurial phenomenon, this first case study helps the identification of the different actors playing a major role in the conception and starting up of the phenomenon. The discussion and conclusions allow us to reaffirm the need for an operational framework in three stages and enable us to formulate further research questions.
A LACK OF CLEAR DISTINCTION BETWEEN THE VARIOUS FORMS OF “HOW TO UNDERTAKE TOGETHER”
Most research treating the subject that interests us, tries to identify the links between the entrepreneurial team and its performance or that of the organization within which this team acts. The first studies, dating from the 1970’s, became aware of the importance of the phenomenon (i.e. many firms undertake thanks to teams, in particular in the field of high technologies) and its influence on financial performance primarily (Cooper, 1973; Cooper, Bruno, 1977; DeCarol, Lyons, 1979; Obermayer, 1980; Teach, Tarpley, Schwartz, 1986; Virany, Tushman, 1986). More recently, authors focus more on the composition of the team (Ucbasaran, Lockett, Wright, Westehead, 2003; Bouncken, 2004; Chowdhury, 2005; Amason, Shrader, Tompson, 2006) and on more qualitative concepts, such as friendship, equity, networking abilities or the interactive behaviour of virtual teams (Busenitz, Moesel, Fiet, Barney, 1998; Francis, Sandberg, 2000; Neergaard, 2005; Matlay, Westhead, 2005). The 3
reference to performance is sometimes implicit (quoted when qualifying the utility of the approach), generally explicit (developed throughout the article). The studies are of quantitative or qualitative nature (in-depth interviews or case studies) or more rarely, reviews of already published investigations.
A vast majority of the articles is based on empirical investigations devoted to the entrepreneurial team or collective entrepreneurship topic and insist, on the one hand, on the advantages of this form of entrepreneurship and, on the other hand, on the conditions necessary to its performance. Lastly, we can notice an absence of fundamental theoretical research to specify or even model, the concept of the entrepreneurial team. It is then interesting to try filling this gap. It should also be noticed that the literature on the entrepreneurial team is relatively sparse. It also suffers from the diversity of view points and meanings. A need for clarification becomes necessary, particularly in comparison with the growing number of authors agreeing to recognize the collective dimension of entrepreneurship (Kamm et al., 1990; Storey, 1994; Timmons, 1994; Clarkin and Rosa, 2005).
Reich (1987) was one of the first to suggest reconsidering entrepreneurship in its collective dimension. He counters the myth of the entrepreneur as a lone hero, symbol of the North-American dream, who wins riches and rewards. The reality of the entrepreneurial phenomena shows the need for a team offering the company the competences and the talents of each one of its members. This consecration of the team is not approved unanimously. For example Shaver and Scott (1991) reaffirm the role of the individual visionary. He/she is convinced that innovation is possible and has the motivation at the same time, to persist until the project is implemented. Timmons (1994), like Ensley et al. (2000), balance such a collective point of view by affirming that within the team, there is always a lead entrepreneur who creates the vision and then shares it with his/her collaborators.
Other authors see the entrepreneurial team as a specific form of organizational behaviour. Weinzimmer (1997) uses the term "strategic teams" to illustrate the managers’ entrepreneurial activities in established companies who pursue rapid organizational growth. Katzenbach (1997) points to the need for constituting a team with members equipped with different experiences or complementary management 4
skills. The team comprises a small number of individuals held together by their joint commitment to performance goals. The strategy is a collective decision for which the members consider themselves mutually accountable. Gartner et al. (1992) observe that the competencies required of an entrepreneurial team can change over time. During growth, it might become necessary to incorporate new members whose skills would closely match its current and/or future needs. Shepherd and Krueger (2002) also stressed the importance of perceptions of desirability and feasibility for entrepreneurial actions such as the realization of new products and services. In other words, different studies consider the entrepreneurial team from the perspective of the organizational construction and realization of an inevitably collective vision. Other studies observe when, where and how, the team is formed. Watson et al. (1995) agree with Kamm et al. (1990), who refer themselves to the work of Ronstadt (1984). According to these authors, the entrepreneurial team is composed of two or more founders present at the pre-start-up phase of the firm until its phase of commercial viability. Kamm and Nurick (1993) restrict their definition to the founders that met before the starting of the commercial activities, and who will own the new organization. Kamm et al. (1990) also suggest that an entrepreneurial team is two or more individuals who jointly establish a business in which they have equal financial interest.
Cooney (2005) questions first the idea according to which the entrepreneurial team is limited to the pre-start-up phase and then the inclusion of the term ‘equal’financial interest. His definition is broader. The author defines the entrepreneurial team as "two or more individuals who have a significant financial interest and participate in the development of the enterprise" (p. 229). The sleeping or silent partners, who do not involve themselves beyond seeking a return on their investment, are not real team members. For the author, the members of the entrepreneurial team are committed in the creation of a new entity or in its development. Clarkin and Rosa (2005) distinguish two types of entrepreneurial teams. The first is that of the entrepreneurial individual with the qualities to envision and create the business, while other team members accept subordinate management roles. The second type is an entrepreneurial team that is composed of several individuals engaged in a wealth-creation process, each consistently producing a stream of new 5
ideas and initiatives, while individually and collectively gathering resources and negotiating with each other. This typology distinguishes neither the founding team, nor the entrepreneurial team being formed within the top management team of recently created companies or when new activities are developed.
Table 1: Extracts of articles quoting the terms of entrepreneurial teams and collective entrepreneurship Reich (1987, p.78)
Stewart (1989, frontpage)
We must begin to celebrate collective entrepreneurship, endeavours in which the whole of effort is greater than the sum of individual contributions. We need to honour our teams more, our aggressive leaders and maverick geniuses less" "Alex Stewart examines an emerging approach to managing: collective entrepreneurship by employees. ( ... ). Entrepreneurship is both collective, a teambased activity and individual, a leader-made creation.
Sheperd et Krueger (2002, p.167)
"We adapt an intention-based model to the domain of corporate entrepreneurship. From our intentions-based model of the social cognition of entrepreneurial teams, ...
Neergaard (2005, p.258259)
"Social network theory and team entrepreneurship. ( ... ) It is necessary to elucidate how the field has previously dealt with the link between networks and entrepreneurial teams…
Vyakarnam et Handelberg (2005, p.236) Conney (2005, p.228)
Keywords: entrepreneurial teams, organizational performance, top management teams "Stewart's (1989) work on team entrepreneurship was offered as a celebration of collective entrepreneurship ( ... ) while Eisenhardt and Schoonhoven (1990), Chaldler and Hanks (1998), Ensley and al. (2002) et Shepherd and Kruger (2002) similarly considered top management teams interchangeably with entrepreneurial teams within the context of corporate entrepreneurship ....
As table 1 shows, the distinctions are not clear between the concepts of entrepreneurial team, top management team, those of collective entrepreneurship, and of team entrepreneurship or corporate entrepreneurship. This vagueness is easy to spot in Cooney’s article (2005) that quotes a great number of authors who confuse these terms. The issue is not based on the interchangeability of the terms employed, but more generally on that the researchers are not exploring well-charted territory. For example, Kamm et al. (1990), Francis and Sandberg (2000), Clarkin and Rosa (2005) exclusively use the term of entrepreneurial teams without referring to other terminologies, and without trying to differentiate. Obviously, our matter aims at clarifying and does not call into question the basic contribution of the various studies quoted. 6
The principal problem might be the assimilation of the term "top-management team" with that of “entrepreneurial team” (for instance, Vyakarnam and Handelberg), whereas the literature in entrepreneurship tends to distinguish the leader from the entrepreneur. The recourse to a grid of robust theoretical reading appears then as essential.
A
THEORETICAL
FRAMING
TO
CLARIFY
THE
CONCEPT
OF
ENTREPRENEURIAL TEAM
Our theoretical framing is based on a model of the entrepreneurial phenomenon proposed by one of us (Verstraete, on a construction initiated in 1997, developed in 2005). The formulation of the research statements requires the presentation of the principal points of the model: EPh = f [ (C x P x S ) ⊂ (E x O ) ] This model applies to the individual, or the individuals being associated for the occasion, who spur an organization. The comprehension of the dynamic relation between this or these entrepreneurs and the organization are described as symbiotic. Three levels of study clarify the entrepreneurial phenomenon: •
a cognitive level (C): this corresponds to the cognitive state leading an individual to undertake, to the knowledge of the entrepreneur as well as to all that contributed, on the one hand, to bring this knowledge to him and, on the other hand, to forge this cognitive state (including his intentions and attitudes). This resulting from a permanent reflexive exercise, learning situations in which the individual was placed and of the vision that they have of their business (their strategic vision). When there are several individuals who join together to undertake, problems relating to conflicts which one could describe as "cognitive" are likely to emerge and, for some, can take them as far as the courts. Conversely, the confrontation of various representations can be enriching, benefiting as much the project as the protagonists (only when obviously these divergences do not harm the constructive interaction of the carriers of the project);
•
a structural level (S): this corresponds to the context structure surrounding the acting entrepreneur. Without eliminating too easily the individuals’s influence, one should not however neglect the weight of the structures on the other levels of the model. It is important to apprehend the structural basics of the system, whether 7
they be the rules, conventions, representations, or institutions which define, in part, interplay with which the entrepreneur must manoeuvre to win the stakeholders’commitment and to perpetuate the spurred organization. Obviously, the entrepreneur can set up a conventional system in which the stakeholders will detect favourable conditions of exchange; •
a praxeological level (P): this integrates the fundamental actions undertaken. These emanate, on the one hand, from the spurred organization’s multiple positioning with respect to its competitors and its various stakeholders and, on the other hand, from the configuration formed in order to produce the elements, which will allow the exchange, durable if possible, with these actors. Within this framework, the policies put in place (financial policies, political wage, etc.) aim at optimizing the exchange relations between the stakeholders;
These levels are expressed in a singular way within the framework of the relation binding the entrepreneur (E) and the organization (O) that he spurs. C, S and P are irreducible for analysis requirements, but are inextricable on a practical level, their interactions (the "x" in the model) also constitute research levels of analysis in entrepreneurship. To take an example that binds the cognitive level and the structural level in order to better understand the process of entrepreneurial socialization, it is possible to resort to the culturalist theses to a limited level as well as to theories like that of conventions or that of social representations, may constitute a relevant analysis prism when these theories are articulated with those of the identity.
For Shapero and Sokol (1982) “the entrepreneur” can be plural. Here the E of the model can imply several individuals taking on the entrepreneur status by the urging of an organization with which they are in a relation of a symbiotic type.1 » (2005, p.16). In reference to this model of the entrepreneurial phenomenon, one can speak of entrepreneurial team if the individuals spur together an organization with which they are in a symbiotic relation. The use of the verb “to spur”, rather than the use of that of “to create”, is not fortuitous. Firstly, it avoids assimilating entrepreneurship and creation of company. When the entrepreneur no longer spurs the movement, giving 1
Three types of relations are possible: the symbiotic, the commensal and the parasitic. Let us recall that the commensal lives on its host by diverting part of food of this last but without causing injury to him, while the parasite infects its host and can cause his death. In reverse, in a symbiotic relation, the protagonists profit reciprocally from the contributions of the other.
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place to the creation of an organization (more or less large, and which takes more or less time), he leaves the field of investigation of entrepreneurship. Thus seen, not every leader is an entrepreneur, i.e. when he is not, or no longer, in this creative dynamic and when he is satisfied with routine. The members of the organization, which he created can nevertheless relay him in this type of task, in particular those taking part in the learning and the implementation of the strategy, if they are invested with the related authority. Besides, the use of the term “organization”rather than of “company” can avoid confusion, since the organization is at the same time the dynamics and the result of this one. This result can be another form of entity since the organization can lead to the emergence of an association in the field of social economy for example. This point establishes one of the junctions of research in entrepreneurship and research in strategy. Research Statement 1: Entrepreneurial phenomena may require a true symbiosis between several undertaking individuals. In other words, the entrepreneur(s) can be plural and it is advisable to identify research fields favourable to this expression in order to determine its limits Morevoever, if the model fits in the school of the creation of organizations, this school reveals various meanings moving away substantially from a vision reduced to the creation of company (Verstraete, Fayolle, 2005). The sectors or the fields where this entrepreneurship is spread are many (public sector, social economy, field of art or culture, etc). Research Statement 2: Collective entrepreneurship belongs to a situation where the organization, by the mobilization of some of its members, starts a dynamic that strategically considers the search for competitive advantage (ex: launching of a new activity, internal growth...) or to resist competitors’attacks in order to preserve its markets and its positions. The organization, thanks to its frameworks, processes or even its routines, can commit and involve its employees in a strategy. When a contractor is surrounded of a team for the realization of his/her project, but if the relation described by the model applies only to him, one cannot speak of entrepreneurial team. As soon as the relation applies to several individuals, the entrepreneurial team is made up of each one of them and the E of the model is in fact the Entrepreneurial team. The other individuals are the organization’s shareholders (O) that the S (structural level) of the model enlightens. The contexts in which entrepreneurial teams can be studied are various.
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Research statement 3: Entrepreneurial Teams are not identified solely in the context of company creation. The contexts of company resumption and even of intrapreneurship can also be useful. Another case can be described when the associates of a project in which only one or two… is in the described relation, because the others are not part of this relation or because, although taking part in the life of the organization, are not "boosters". One will use then the term top management team, in particular when the members take part in certain strategic decision-makings, likely to durably commit the organization into a certain direction. It’s a form of collective entrepreneurship, but not of entrepreneurial team. This collective entrepreneurship can embrace a significant part of the members of the organization. Research statement 4: The top management team is made of members participating in strategic decision making, who, within the organization, are vested with the related duties and powers. Certain fields such as university spin-offs or cooperative companies are by nature of a collective type. In university spin-offs, the universities or the schools play a part in the innovating creation of company (by the incubators, the services of valorisation of research, etc.) while benefiting from the advise and skills of qualified organizations that help them to appreciate the potential of technologically transferable work, therefore subject to economical valorisation. This situation is also observed in social entrepreneurship (Boncler, Hlady, 2003). The exploratory research we present in this article comes from social entrepreneurship. The case of a SCOP, a Production Cooperative Company, and its specific governance, will help us to test our research statements. Research statement 5: Collective Entrepreneurship can exceed the borders of the entity to involve certain stakeholders in the concretization of the phenomenon spurred on by one or more actors considered as entrepreneurs, the latter sometimes being encouraged to step out and act through various means. AN EXPLORATORY CASE STUDY: THE SCOP ATMOSPH’AIIRE Methodology The following analysis is based on findings from an ongoing research project investigating the key factors influencing a collective entrepreneurial process in French SCOPs (see Box 1). Case studies are carried out following key principles like those of contextualisation and multiangulation (Hlady Rispal, 2002). 10
Box 1: What is useful to know about SCOP In 2006 1,688 SCOP achieved a sales turnover of approximately 3.1 billion euros. Their payroll had 36 000 employees (of whom 58 % are associates, 85 % of them after two years of seniority), they produced 1.4 billion euros of added value and 138 million euros of corporate profits2. The SCOP is governed by the law of July 19, 1978, amended in 1985 and 1992. It has to do with a public or a private limited company, whose associates are placed on a strict equal footing. The creation of a co-operative is, by nature, a collective adventure (with a minimum of 2 associates-employees for a private limited company, 7 at least for a public limited company). In opposition to traditional business firms where the law forces the publication of the amount of their authorized capital in their statutes, co-operative companies are companies with variable capital which own capital stocks that vary with the fluctuations of their activity, insofar as the capital is brought by the employees. These latter are associates who elect their leaders from among themselves. The social share is for the co-operative company what the stock is for the company. It is the stock emitted by the company in exchange for a financial contribution to the authorized capital. It is by acquiring a social share of his co-operative that a SCOP employee becomes co-operator. A SCOP can however have non co-operator associates. However, these cannot be senior partners (they have a maximum of 35% of the voting rights). One can regard the cooperative as being a partnership, insofar as the status of associate is not acquired by the contribution of funds to the capital of the company, but through election by the other associates. Their acquisition of social shares is but a secondary consequence of the entry in the co-operative. The associates’responsibility is however limited to their own contributions, as in a public limited company. Contrary to the stocks, the social shares of a SCOP can neither be on the Stock Exchange, nor be increased in value. When a SCOP employee leaves his co-operative and yields his social shares, he sells them at the purchase price. Another consequence is that if the company has a good corporate performance, the value of the social share does not increase. The employees’status is, according to Vienney (1994) an original combination of partnership deed and of a paid employment contract: the members have the double standing of social shares subscribers and employees. So the co-operatives belong to their members collectively, and are not likely to target for a take-over bid, nor transfer. This independence enables them to pledge themselves in the long term as perennial development actors. The success of the company benefits the employees’community, in the form of wages, of employment creation and even dividends, if there are profits. But these have a ceiling (the social shares can be remunerated "at most equal to the average rate of the output of the private companies bonds" according to the law of July 13, 1992) and a great part of the corporate profits are automatically converted into reserves, which remain property of the company. Approximately 45 % of the profits are assigned to the SCOP’s common and indivisible reserves. An equivalent share reserved to the employees, co-operators or not, in the form of a participation, called work share; the remaining 10 % remunerate the capital which is thus constituted this way. The associated employees are thus collective company owners. The firm is then managed in a democratic way, under the terms of the principle "one man, one vote" (and not "one stock-one vote"). A SCOP associate has the same voting power whatever the number of social shares that he/she has.
The findings reported here focus on one SCOP. They aim at exploring roles and responsibilities with regard to collective action and try to better understand how the members of an entrepreneurial team distribute such activities among themselves. In 2
Source: www.scop.coop consulted on March 30, 2007.
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this case study, the team had 8 members. The venture was set up in 2003. The team is mostly made up of members who were present at the idea stage (seven founders out of 8 members). Two interviews took place with one of the founders, identified as the “primary networker”. Informal interviews also took place with other members of the SCOP and with delegates of the National Confederation of SCOP. Each formal interview lasted approximately one and a half hours. They were based on a semistructured interview guide that was constructed with thematic headings concentrating on the idea, the opportunity, the construction of the business and social networks, the firm’s positioning towards different shareholders, the team’s skills and vision. The interviewer was free to pursue unexpected paths introduced by the informant. Secondary data was also gathered (promotional leaflets, press articles on the firm, internal documents, etc.). All interviews were transcribed and coded, secondary data was also coded, focusing on the team’s entrepreneurial process. This first analysis authorized an exploratory understanding of our subject.
Case study findings The analytical grid developed by Verstraete and Saporta (2006) helped us to organize the data. The process began with the idea and the identification of a business opportunity, followed with the recognition of share-holders and market conventions and concluded with the vision (see figure 1). Our objective was to analyze the entrepreneurial team’s process while testing our research statements (S1 to S5).
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• Two business ideas built on a societal concept • The building of the entrepreneurial team
•Raising capital •Pursuing ancient partnerships
Idea
Shareholders and conventions •Understanding market conventions •pedagogical behaviour towards suppliers •negotiation capacity with customers
Opportunity •A progressive but quick definition of the business concept •Obtaining access to relevant advice / knowledge
Vision •Team vision
Key Success Factors •a good knowledge of cartridge recollection market •self-financing •reactivity Risk factors •recycling market unknown •offensive competition
Figure 1: The entrepreneurial team’s entrepreneurial process: the SCOP Atmosph’airre The idea •
Two business ideas built on a societal concept
Entrepreneurial Teams are not identified solely in the context of company creation. The contexts of company resumption and even of intrapreneurship can also be useful (S3)
The collective aspect of the phenomenon under study goes beyond the business itself. In 2003, the origin of the idea was related to the will to solve a problem: unemployment followed by the incapacity of an association to meet its financial obligations. As already mentioned, this source is often quoted for the creation of a SCOP3. Besides, the activity of the SCOP results from a former idea developed by Handi-Terre (Handicap-Earth), an association which had an unexpected idea within the theory of Verstraete and Saporta, (2006, p.240). It aimed at recovering the empty printer cartridges to resell them to recycling firms rather than to throw them away. The people in charge of the association learnt how to combine a sense of environmental creativity with reality. They identified another way of processing the consumables of companies, avoiding waste and environment damage while proposing 3
We can regret however the small number of recoveries under the SCOP status: only 6 %. "Since 1994, hardly more than 100 companies in liquidation bought were in the form of co-operatives, allowing to save more than 200 employment per annum on average; 80 % of them still exist, and their workforce increased from 2 140 people to 2300. "Alternatives Economiques, L'économie sociale de A à Z, hors série n° 22, Janvier 2006.
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a lucrative solution, part of a sustainable development strategy. In a pioneering way, the creators of the idea conceived a societal strategy which took into account the needs and interests of both the companies and their environment. In addition to environmental protection concerns, the founders continued to favour reintegration by reserving their jobs for people in difficulty (including handicapped people). The SCOP Atmosph'airre preserves this double concern in its reality and its name which means in French: “Atmosphere’Help Reintegration Recycling Environment”. •
The building of the entrepreneurial team
Entrepreneurial phenomena may require a true symbiosis between several undertaking individuals (S1). The top management team is made of members participating in strategic decision making, who, within the organization, are vested with the related duties and powers (S4).
Seven individuals recognized an opportunity to work together, regardless of whether any of them had a clear idea of a particular new venture. This “group approach”, in contrast to the “lead entrepreneur”approach (Clarkin and Rosa, 2005), was motivated both by the perception of the benefits to be derived from the relationship and by the benefits of task accomplishment. The seven members of the team had previously been work associates. They trusted one another thanks to their long standing relationship. One colleague was driven out because the other members did not get along with him. The conversation about starting a venture arose and grew in a social network based on close working relationships. Shared identity and interpersonal dynamics appeared to play a major role in the team composition as suggested by Ruef and al. (2003). The founding idea was spurred by two people but every member played his/her part. Soon, no one could be pointed at as being the specific catalyst. "At the beginning, we were two seeking for information... With a colleague, we had sought information on associations, etc. When we happened to hear about the SCOP, this rang a bell for both of us ... After, we informed our colleagues. They found the idea interesting. Then, we met the Regional Union of SCOP. We met a delegate, who explained to all of us what a SCOP was. And we chose this solution. After, we distributed the tasks among ourselves. We first had to find a name for the company. It was necessary to speed up the project. Among three or four colleagues, we distributed the roles; we had to speed up... soon the whole group got involved and participated."
The opportunity •
A progressive but quick definition of the business concept
As mentioned in the above verbatim, the team had to get information about what was needed to transform the idea into an opportunity. As team workers worked together, they modified and redefined the business concept and their decisions about the 14
resources that were needed to implement it. According to Yulk (1989), groups tend to be more effective at problem solving when they: (1) take enough time to thoroughly consider alternatives; (2) include the participation of all members; (3) avoid polarization; and (4) carefully develop action plans. In our case, the members considered alternatives such as setting up another association, or a traditional firm, a SCIC4 before they chose the SCOP status. The project included the participation of all the members. Everyone tried to find different solutions to raise capital, to find an office, etc. But what characterized the definition of the business concept is that time being really scarce, no careful developed action plan could be thought out. The business concept was first defined through the confrontation of the business idea with the socio-economic reality of a sustainable development market. The market opportunity was partly tested by the team members. They practised the collection of cartridges from companies known as suppliers (free collection). On the contrary, they had no experience of the sales market, reserved up to this point by the registered office of the association. In addition, the sustainable development market began to grow from the beginning of the year 2000. Concerning competition, the entrepreneurial reaction of the team members confirms part of research statement 2: Collective entrepreneurship belongs to a situation where the organization, by the mobilization of some of its members, starts a dynamic that strategically considers the search for competitive advantage (ex: launching of a new activity, internal growth...) or to resist competitors’attacks in order to preserve its markets and its positions. (S2).
Indeed, the reactive capacity of the team against offensive competitors was determining. Again, the collective aspect of the action was verifiable. It could mainly be explained by the situation of employees who faced the same risk: the loss of their job. "At the beginning, everything was a little disordered. Since there was a potential market, we could not remain too long without resuming the activity... Because there was competition … It started to thump seriously (...) As our traditional suppliers said "we already work with Handiterre", our competitors answered: "It’s finished. The association doesn’t exist any more". Then our suppliers gave them the cartridges. We managed to recover some of them, but we also lost others. We had a 15 to 20 % loss. It was a real race. We needed to react very quickly. Everyone of us had to get down to work".
4
The SCIC is another form of co-operative which has two main specificities. The first one relates to the defended cause: a response to unmet collective needs. The second is the multi-membership, which applies to three categories of actors: the employees, the users, and the third parties (volunteers, local authorities, capital contributors). The objective of this status is to associate users and backers to the strategic decisions, alongside with employees and volunteers.
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•
Obtaining access to relevant advice / knowledge
Collective Entrepreneurship can exceed the borders of the entity to involve certain stakeholders in the concretization of the phenomenon spurred by one or more actors considered as entrepreneurs, the latter being sometimes encouraged to step out and act by various means (S5). The principle types of advice and knowledge required by the SCOP studied were legal advice and identification of recycling companies and market conventions. Most market knowledge was found via direct action. They created a competitive advantage thanks to their availability and occupation of the supplying market: “We create the difference with our supplying companies because we fight every inch of the way. They see us quite often. When we had the problem with the association Handiterre, we continued to visit the companies. Today as we want to develop the market, it’s different. When a new sector is visited, competition is often already in place. The difference, it’s that we are always ready to listen our suppliers. I visit the company, they tell me that they already work with somebody else but I return six months later and often they deal with me because I’m here, we are serious, we also have our arguments.”
Legal advice was found through the two primary networkers, as already quoted (see the building of the entrepreneurial team). The SCOP network was then activated and the delegate of the Regional Union of SCOP brought the needed assistance, thus reducing uncertainty. Independence, profit sharing and team work were the three collective entrepreneurial objectives quoted: "That enabled us to manage our work tool ourselves, without having to look for it somewhere else... we were completely independent from external partners... What we liked, it is that at the end of the fiscal year, if there was a cake to share among ourselves ... it is very different from the other forms of companies. It is the collective aspect, we already used to work together in the other association, we already were a team”.
The Regional union of SCOP helped the firm to gain access to institutional organizations through network contacts established at meetings. Establishing a reputation was crucial: “The Regional Union of SCOPS talks about us. It also helps us with the companies. The delegate recently met with the CUB (Urban Community of Bordeaux), with a manager from the social department. Yes, the URSCOP talks about us, they have contacts with organizations, especially with local institutions but with others too. They hold meetings, and participate in our networking”.
Shareholders and conventions •
Raising capital
Team formation occurred within a pre-existing network with strong ties (Burt, 2000): close working relationships and the specific network of the General Confederation of SCOP (see box 1). The approach to forming an entrepreneurial founding team reduced the exploitation of the full potential of a collective network, when capital requirements had to be met. Indeed, the mobilization of financial resources was only done through self-financing. Quickly convinced of the value of the SCOP project, one 16
of the co-founders lent capital to the other co-founders, preserving their autonomy but no financial help from regional institutions like the Chamber of Commerce was really sought for in the setting-up of the company. No business plan was conceived. •
Pursuing ancient partnerships
The new firm remained a partner with the “Ateliers du Bocage”, an association doing recycling with handicapped people. They were presented as guarantors of the SCOP’s credibility in the sector of sustainable development and social reintegration by the primary decision maker and this is in the content of their promotional leaflets. "Moreover, they (Handiterre association) wanted to enable handicapped people to work. It was something extra. As for us, we decided to preserve this vision. This social side, we preserved it. Now, many competitors, who are business firms, try to imitate us. They say they canvass companies for an association. Only because they have some kind of partnership with, for example, an association like Enfance and Partage. They are supposed to transfer money to them. Now, what they transfer to them, I do not know...”
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Understanding market conventions
As for conventions characterizing the market, the resource owner as well as the other co-founders knew them or found out about them. A pedagogical approach was necessary for the collection market. The suppliers slowly learnt the benefits of the sustainable development market. As for the customers, a win-win negotiation was essential with the recycling firms. "For the collection, education of the sector was needed... sometimes in certain companies, it was necessary to come three to four times before getting any results. Sometimes, even in the cases we gave them, there were coffee glasses! Today, it’s different, people are more open... otherwise, for the sales market, I work on a list, when I have rather important sales and I spend almost 48 hours negotiating. I make proposals; the recycler makes me other proposals, and so on. We don’t need to fight, but it’s a long negotiation."
A team vision firmly fixed in the SCOP solution According to Verstraete and Saporta (2006), the two main dimensions of a strategic vision are the positioning that allows an exchange with the shareholders and the organisational configuration. The case under study has the singularity of combining these two dimensions. The SCOP legal status makes it possible for the employees to become elected associates, then decision-makers, after two years of activity. The resource owners are also the founders as well as every new associate (see box 1). In addition, the SCOP is automatically part of a regional and national network which delegates advise the decision-makers on a regular basis. Suppliers, customers (recycling firms and brokers) and competitors are the other actors of the SCOP 17
network. Their ancient positioning focussing on environmental protection, reintegration and collective solidarity was a source of competitive advantage for the suppliers and the customers. The starting vision was anchored, as already stated, in the search for a solution related to the association employee employment and the continuation of an activity. The SCOP’s legal status, the network linked with this choice, and the presence of a market opportunity embodied this solution. In 2007, the vision related to the development of the market with the collective participation of all. "Today, we do a little of everything. The person in charge of business contacts will also do the collecting. And the person in charge of the collection of cartridges will also make business contacts... As for daily decisions, I make them. But as soon as the decision becomes somewhat important, financially speaking or is difficult to make, I am no longer the only decision-marker. I have to inform my colleagues. We didn’t speak about that, but in a SCOP, the rule is one associate, one voice. This, also, is very important. When there is a decision to make, there are several making it. I call my colleagues."
Besides, the strategic risk of trade disappearance is identified but is not managed yet. "The problem is that we don’t know what the market of the cartridge will look like tomorrow. Because it evolves enormously, and also, I do not know, perhaps tomorrow there will be a system where we won’t have cartridges needing recycling. It doesn’t depend on us. It depends on the manufacturers... they don’t like recycling companies... They prefer to sell new cartridges. They would like to eliminate this category of people... But for the moment, we work hard. "
DISCUSSION AND CONCLUSIONS
In raising the question: “what is the entrepreneurial process of an entrepreneurial team?”, we also implicitly ask: “is a SCOP a typical example of an entrepreneurial team?”. Our first exploratory research confirms the statement. However, other questions also remain like: “does team size matter?”, “How does recruitment effect the team?”, “How are team maintenance decisions made?”, “How does the team position itself in regards to its shareholders?”etc. This first research, of an exploratory nature, thus confirms the need for an operational framework in three stages to delimit the concepts under study. These three stages are based on the three levels of the model presented in the first section of paper (C X P X S). They will help us to understand the relations between the Entrepreneurial Team and the Organization (ET X O) within the context of the fields chosen for the empirical phase.
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The Cognitive level applies to the first phase of the ongoing research (period 2007-2008). We focus mainly on the narration of the entrepreneurial process leading to the identification of the teams’strategic vision. One can distinguish the resolutely idiosyncrasic representations of the vision (i.e. the vision is carried by an individual, for example an entrepreneur, having a certain representation of his business), the collective representations (the vision is a collective construction and becomes to some extent a guide for the collective action) and, sometimes, the representations having a organicist tendency when the vision is that of the organization. In our case study, the vision first belonged to the first association and was based on environmental protection and solidarity. It then was firmly fixed in the SCOP status solution. These visions comprise entrepreneurial elements that need to be identified through its contents and construction on the one hand, through the individuals taking part in its development on the other hand. In concrete terms, the aim is to interview the person identified as a primary networker in order to identify the actors having played a central role in the vision construction.
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The second phase of our research will focus on the structural level (S). We want to go deeper in the study of the structure of the contexts empirically invested (period 2008-2009). More particularly, we will study the contextual elements that affect the entrepreneurial team (ET) in the construction of the vision (S X C). The main shareholders identified in phase 1 will be met. We want to understand how the entrepreneurial team positions itself in its partner’s network as well as in its competitive network. In particular, we want to study the shareholders’role in the construction of its market. Interviews and observation will be necessary during this contextual study.
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Consequently, the third phase of research (period 2009-2010) privileges the praxeological level (P). We need this time to specify the team maintenance decisions concerning, on the one hand, the organizational configuration and, on the other hand, the entrepreneurial team’s positioning in its multiple environments. Interviews, observation, a ‘decision-calendar’ approach are the different foreseen methods (Mintzberg’s,1973; Vidaillet’s,1998).
With these three levels, the entrepreneurial team concept will be approached and delimited compared to the other shareholders. The principal difficulty of the research 19
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