Founding team entrepreneurial and professional identification, identity conflict, and ambidexterity

Abstract

We introduce the concept of startup identity conflict as disagreements among founding team members about the core, enduring, and distinctive characteristics of a nascent business, and relate it with business ambidexterity—the balance between exploration and exploitation. Although ambidexterity is essential for startups’ funding success, performance, and growth, it is difficult to achieve in a startup as its founding members may differ among one another in what they value. We argue that startup identity conflicts are negatively related to ambidexterity. Further, we demonstrate how founding team members’ identification with two different targets, namely, the founding elite and their profession, jointly bring about startup identity conflict. Drawing from social identity theory and founder identity theory, we demonstrate that there is an indirect negative effect of team entrepreneurial identification on ambidexterity mediated by startup identity conflict, and that this indirect relationship is weaker when team professional identification is higher rather than lower. We test our hypotheses using a multi-informant three-wave survey of 102 startups. Implications for theory on identity in entrepreneurship, ambidexterity, and interpersonal conflict in teams are discussed.