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  • January–February 2023
  • Article
  • Organization Science

External Interfaces and Internal Processes: Market Positioning and Divergent Professionalization Paths in Young Ventures

By: Alicia DeSantola, Ranjay Gulati and Pavel Zhelyazkov
  • Format:Print
  • | Pages:23
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Abstract

We explore how the initial market positioning of entrepreneurial ventures shapes how they professionalize over time, focusing specifically on the development of functional roles. In contrast to existing literature, which has presumed a uniform march toward professionalization as ventures complete developmental milestones, we advance a contingent perspective distinguishing between the development of external interface functions (marketing & sales and customer development) and internal process functions (accounting, human resources, and finance). Specifically, we argue that positioning in an unconventional market space raises demand for external engagement that focuses ventures’ attention and resources toward developing external interface roles. At the same time, such unconventional ventures are less apt to elaborate their internal process roles relative to more conventional peers. We test these predictions using a novel longitudinal dataset on the internal organizations of 3,748 U.S.-based entrepreneurial ventures. In contrast to common assumptions of convergent professionalization, our theory and findings advance the perspective that ventures pursue divergent professionalization paths based on their initial market positioning.

Keywords

Market Positioning; Professionalization; Scaling; Entrepreneurship; Strategy; Business Startups; Growth and Development; Organizational Structure

Citation

DeSantola, Alicia, Ranjay Gulati, and Pavel Zhelyazkov. "External Interfaces and Internal Processes: Market Positioning and Divergent Professionalization Paths in Young Ventures." Organization Science 34, no. 1 (January–February 2023): 1–23.
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About The Author

Ranjay Gulati

Organizational Behavior
→More Publications

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More from the Authors
  • Sarojini Naidu: Courage of the Nightingale By: Ranjay Gulati, Malini Sen and Anjali Raina
  • Sona Comstar and Blackstone: Unlocking Value Through Business Transformation By: Ranjay Gulati and Kanika Jain
  • Ashesi University: The Journey from Vision to Reality By: Ranjay Gulati and Caroline de Lacvivier
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