Size, entrepreneurial experience and organizational decentralization

Abstract

Purpose

Based on the cognitive bias theory, this study aims to explore the relationship among the size of new ventures, entrepreneurial experience and organizational decentralization.

Design/methodology/approach

This study uses 175 entrepreneurial companies in the Bohai Bay Rim as samples. The hypotheses are tested through partial least squares (PLS).

Findings

A clear positive relationship is found between size and organizational decentralization, and entrepreneurial experience is found to have a negative effect on this relationship.

Research limitations/implications

The influences of other variables at the organizational level on organizational decentralization are not taken into consideration, and the measurement of entrepreneurial experience is not accurate enough.

Practical implications

This study also has practical implications. Compared with inexperienced entrepreneurs, experienced entrepreneurs do not always have many advantages. Entrepreneurs should decentralize power at the right time in the process of expanding their businesses and continuously reflect and learn, instead of exaggerating their own intelligence, consequently making more rational decisions.

Originality/value

This study has three theoretical implications. First, it provides a theoretical implication for understanding the characteristics of changes in the organizational decentralization of new ventures, which enriches the literature on organizational decentralization in the field of entrepreneurship. Second, it derives theoretical implications for understanding the role of organizational size in organizational development. Third, this study, which applies the cognitive bias theory to assess the effect of entrepreneurial experience, helps supplement existing research on the relationship between entrepreneurial experience and new ventures.

Citation

Gu, C. and Lin, S. (2021), "Size, entrepreneurial experience and organizational decentralization", Chinese Management Studies, Vol. 15 No. 3, pp. 667-687. https://doi.org/10.1108/CMS-07-2020-0318