When New Ventures Grow Up: Organizational Change in Growing New Ventures

Abstract

This study sheds light on organizational change during new ventures’ shift into scaling. In particular, we investigate organizational change in new venture development, when transitioning from a start-up to a professionally managed firm. We draw on the literature on new venture development and scaling, as well as on literature on organizational change. Based on an explorative case study of a tech-focused new venture, we identify triggers of organizational change specific to the new venture context, and three types of organizational responses that characterize the new venture’s organizational development: pragmatic solutions with unclear responsibility, over-engineering, and monitored experimentation. The organizational response mechanisms demonstrate that new ventures experiment with organizational structures and routines during their organizational development.