Abstract

This research addresses the effect of team diversity, external network non-redundancy and internal network closure on the performance of high-tech start-ups. The diversity in teams results in a wider area of experiences, a greater variety of perspectives and creativity, and in innovative decision-making. Members in such teams will be able and willing to challenge each other’s viewpoints. In the process, diverse teams come up with a variety of solutions, which stimulates effective group discussion and, in turn, results in high-quality decisions. Diverse teams may be also connected to more disperse sets of contacts. These non-redundant network contacts increase the range of the network: a wider circle of information on opportunities, such as potential markets, investors and business ideas, is available to the team. Team diversity and external network non-redundancy may lead to novel information and opportunities for brokerage, but the diversity can hinder effective teamwork. Cohesion among the team members of the start-up improves the communication and the coordination of the activities. They share a common language with similar experiences, beliefs and values that enhances team communication. Team cohesion prevents team members from dysfunctionality and increases the levels of affinity and trust that keep team members more satisfied and keen to be part of such a team.

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