Temporal Anchoring as a Tool for Initial Organizational Structuring

Abstract

I inductively examine organizational search for initially indeterminate outcomes (i.e., based on novel ideas). Here, how actors search is central to establish organizational structures—instead of being determined by them. I build theory from longitudinal case data that I collected by closely following the emergence of 35 new entrepreneurial ventures over a core period of 2.5 years. I find two contrasting modes of how founders search and development of distinct organizational structures. Both modes originate from how founders mentally anchor to either, future or the past reference points: when anchoring to future reference points, founders searching backwardly to identify related strategies, and create less hierarchical organizational structures, which develop more linearly. Contrary, when anchoring to past reference points, founders search forwardly, pursue opportunistic decisions to meet short-term performance goals, and create more hierarchical organizational structures, which develop more multi-directionally. I provide first insights into the emergence of organizational structure and the role of cognition for organizational search. I highlight the power of founders’ unique mental representations (i.e., new beliefs) to search more specifically in highly uncertain environments, and to achieve more novel outcomes. I contribute by answering central questions about effective strategies in new venture development.