Understanding the Dynamics of New Venture Top Management Teams: Cohesion, Conflict, and New Venture Performance

The success of a new venture usually depends upon whether team members can amalgamate effectively without losing their creative diversity. The use of conflict is central to this effort to combine talent and ability into an integrated whole. Although conflict can cause animosity and resentment, it can also be a catalyst for creative thinking and understanding. Effective teams utilize the benefits of conflict while avoiding its potential negative impact. The effects of cohesion on cognitive and affective conflict were examined. Data were gathered via surveys from the top management teams (TMTs) of 70 new ventures which were members of the 1995 Inc. 500, including 192 managers. Cohesion, conflict, firm performance, and profitability were measured. Findings indicated that TMT cohesion was negatively related to affective conflict and positively related to cognitive conflict. TMT cohesion is positively related to new venture growth. (SFL)