Cultural development in entrepreneurial firms

Abstract

New ventures are essential to innovation and economic growth still they remain short lived, and their growth poorly understood. Start-ups are characterised by a certain culture yet our understanding of the cultural development during periods of rapid growth are limited. In this paper we examine cultural development in rapidly growing firms by doing a qualitative study involving a small Norwegian IT-firm on the brink of crossing the 30-employee threshold. We access subjective experiences and meaning to make sense of the process from founding to present day and how the culture is perceived and have changed over a time of increased growth in employees. We find that, in accordance with the prominent theories on culture, as the culture develops, what remains the same, is often attributed to the founder and CEO, but fragmentation and development of subcultures occur within the dominant culture. While we argue that a prominent culture might aid as a competitive advantage and serve as foundational pillars for growth in a start-up and early growth, there is some reason to argue that preserving culture could have negative effects on growth when reaching a certain level.