Growing pains: Paradoxical tensions and vicious cycles in new venture growth

Abdelghani Es-Sajjade,Henk Volberda,Krsto Pandza

doi:10.1177/1476127020929003

Abdelghani Es-Sajjade, Henk Volberda + Show 1 more

Open Access

https://doi.org/10.1177/1476127020929003

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Abstract

In this article, we explore how paradoxical tensions related to exploration–exploitation dynamics may shape vicious cycles in high-growth ventures. Based on an inductive, interpretive case study at a telecommunications firm in the United Kingdom, we identify a set of drivers through which vicious cycles may emerge and persist over time. While some drivers are associated with originating the vicious cycle (cycle originators), others are associated with sustaining it (cycle perpetuators). Cycle originators identified in the study include tradeoff cognition, structural separation, and a structural leadership void. Cycle perpetuators include intergroup tensions, ineffectual integration, and a temporal leadership void. We show how the interplay between these drivers in a self-reinforcing process culminates in the escalation of tensions and a political turnover (cycle climax). In the field study, we observe the operation of this pattern over two full cycles. Based on the findings, we develop a framework relating paradoxical tensions to vicious cycles in new venture growth. We conclude by challenging traditional stage-based conceptualizations of new venture growth, and by discussing the implications of our study for research on the linkages between organizational paradox, ambidexterity, and venture growth theory.

Highlights

As we show in detail below, these elements reinforce one another and launch a vicious cycle which is perpetuated through three cycle perpetuators shown in the top box of Figure 3, culminating in a cycle climax that creates a discontinuity in the process
Structural separation, and structural leadership void as three drivers that initiate each iteration of the vicious cycle
We suggest that when considering what particular leadership issues drive vicious cycles, these can be attributed to the construct “tradeoff cognition” in the leader of a firm

Summary

Introduction

The complexity and ambiguity of organizational life make it fraught with paradoxical tensions, which have attracted considerable recent attention from management scholars (Cunha and Putnam, 2017; Lewis, 2000; Lewis and Smith, 2014; Putnam et al, 2016; Schad et al, 2016; Smith and Lewis, 2011; Vince and Broussine, 1996). Within organizations, there are often multiple contradictions at any one time—for example, flexibility versus efficiency, exploitation versus exploration, and competition versus collaboration—and these can persist for a long time (Lewis, 2000). These contradictions provide fertile ground for the emergence of paradoxical tensions; that is, “ubiquitous and persistent forces that challenge and fuel long-term success” A vicious cycle, on the other hand, is a loop in which tensions are perpetuated and exacerbated, resulting in counterproductive outcomes (Lewis, 2000; Masuch, 1985; Repenning and Sterman, 2002)

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