Born to Be Wild?: On Managerial Capabilities and Business Performance in Technology Start-Ups

This study analyzes the relationships between organizational structure—namely, formalization, centralization, management style, and team solidarity—and the performance of technology start-ups (TSUs) in Israel. Employing a sample of 101 TSUs in Israel, the findings of regression analyses show that formalization, solidarity, and a laissez-faire management style can serve as predictors of TSU performance, controlling for TSU age, size, and industry. The research also reveals that the relationship between the level of formalization and TSU performance is nonlinear, with a negative slope at low and high levels of formalization. The laissez-faire style of management had the strongest positive effect on performance relative to other styles. These results point to dual managerial needs of the young TSU, seeking innovation and autonomy on the one hand, and needing some stable order on the other. The results of this study have the potential for wide generalization to TSUs in other countries and contexts.