Practical Implications

Practical Implications for Original Ventures

The first study in this thesis points out that team diversity is positively related to performance for newly founded university spin-offs. Thus, selecting the right team can constitute a first and easy way to affect firm performance. It is worth highlighting the positive effects of team diversity on networks and the access to financial resources which in turn influence performance positively as a direct effect of team diversity on performance could not be observed. If teams are diverse they have access to a wider range of networks and are more attractive for external providers of equity and debt capital.

The PLS results reveal that especially diverse study programs and degrees, industrial experience, and nationalities have had a positive effect in the model. Insignificant diversity items are other titles, soft skills, private contacts, and the character. There-fore, the results highlight that especially functional diversity is an important success driver. Founders of research-based spoffs should be aware of the possibility to in-fluence performance already at an early stage of the business lifetime and to create a team that exhibits a high functional diversity. Capital providers are able to rec-ognize the team composition and favor heterogeneous teams and diverse teams are capable to develop a better network for the organization. Regarding the imprinting hypothesis and its consequences (Stinchcombe (1965), Pennings (1980)) the team composition in the first life-cycle stage of the firm has even long-term performance effects. Once more, this emphasizes that new venture teams should be composed in a more heterogeneous way to be successful.

Practical Implications for SMEs

After new venture formation follows the life-cycle stage firm growth according to the research framework applied in this thesis. Due to the study results in chapter

5.2. Practical Implications 133

4.2 various practical implications arise. SMEs suffer from diverse disadvantages in comparison to big companies that are e.g. a lack of resources, lower prominence on the labor market, and predominantly rural company locations. These disadvantages complicate the possibility to hire and retain high skilled workers and therefore could lead to a loss of productivity and competitiveness.

However, SMEs are able to compensate their disadvantages in comparison to big companies if they offer their employees a different kind of workplace and different incentives. Furthermore, the use of the appropriate incentive schemes can be under-stood as a sort of strategy to improve their position in the the war for talents. High skilled workers in SMEs prefer nonfinancial incentives and the special workplace conditions that can only be found in SMEs. Business owners and entrepreneurs can use this insight to adapt the incentive schemes to their employees’ needs and thus enhance employee motivation and emerge as an attractive employer on the labor market. Based on this evidence, it is additionally possible to mitigate the shortage of talents by using the right incentives to gain highly qualified employees.

A further practical recommendation is that SMEs should not use financial incen-tives without a prior thorough examination of the associated effects. Regarding the possible negative effects of financial incentives such as the crowding out of intrinsic motivation and the complexity of using this incentives it is surprising that nearly 50% of all employees in SMEs are also remunerated according to pay for performance plans (see section 4.2.5). Thus, the question arises if SMEs really know what they are doing and therefore the study results could be used to create a better awareness for the effects of financial and nonfinancial incentives and to prevent a misuse.

Practical Implications for Derivative Ventures

The research study for derivative ventures in the third and last life-cycle stage of the firm provides practical implications that could have wide-reaching-consequences

134 Chapter 5. Discussion

for the economy and society as a whole. The results show that there exist no performance differences in managing business succession between men and women.

The implications from these results have to be divided into recommendations for predecessors in family firms and policy makers in general.

Initially, the results reveal that predecessors’ fears of handing over their business to a female successor (e.g. Dumas (1988), Dumas (1990)) is irrational. Furthermore, there exists a huge waste of potential if females in general are stigmatized as under-performing and if they are ignored as potential successors. Even if there is still no dangerous lack of successors in Germany (Müller et al. (2011)) the limited pool of candidates complicates the selection of an appropriate successor. The study results unequivocally indicate that females are equally able to manage business succession and therefore should be considered as suitable successors.

Further implications concern the under-representation of females in business and managing positions in general. The study can be used as basis of decision making for policy makers to change the still unsatisfactory situation of a male-dominated society and economy. If prejudices against women in management positions do not disappear over time policy makers have to take action. The “female quota” repre-sents only one possibility policy makers have to change the current situation. Fur-ther solutions could be specific support programs, marketing activities or a stronger media reporting to draw attention to gender equality.

Regarding the current demographic changes in many European countries, especially in Germany and the related consequences (Kay and Richter (2010), Kay (2012), Kay and Suprinovic (2013)) the consideration of women in managing positions and business succession appears crucial for the economy and wealth creation. As a whole, predecessors and policy makers should use the study results to increase their efforts to achieve gender equality.