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Crossing the Threshold from Founder Management to Professional Management: A Governance Perspective

Authors

  • Eric Gedajlovic,

    Corresponding author
    1. University of Connecticut School of Business; University of Connecticut and EM Lyon School of Business; Case Western Reserve University, Weatherhead School of Management, Cleveland
      Eric Gedajlovic, University of Connecticut, School of Business; Management Department, 2100 Hillside Road Unit 1041, Storrs, CT 06269-1041, USA (egedajlovic@ business.uconn.edu).
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  • Michael H. Lubatkin,

    1. University of Connecticut School of Business; University of Connecticut and EM Lyon School of Business; Case Western Reserve University, Weatherhead School of Management, Cleveland
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  • William S. Schulze

    1. University of Connecticut School of Business; University of Connecticut and EM Lyon School of Business; Case Western Reserve University, Weatherhead School of Management, Cleveland
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Eric Gedajlovic, University of Connecticut, School of Business; Management Department, 2100 Hillside Road Unit 1041, Storrs, CT 06269-1041, USA (egedajlovic@ business.uconn.edu).

Abstract

ABSTRACT We argue that the challenges faced by threshold firms are deeply rooted in governance characteristics (i.e. the incentives, authority and legitimacy) which imbue them with characteristic capabilities, disabilities and path dependencies. Whereas Zahra and Filatotchev (2004) reason the principal problem facing threshold firms relates to organizational learning and knowledge management, we posit resource acquisition and utilization to be equally important. Moreover, we argue governance theory is more able than a knowledge-based perspective to explain the root causes of the learning and resource issues faced by threshold firms as well as the complex set of processes involved in their effective management.

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