The importance of vertical and shared leadership within new venture top management teams: Implications for the performance of startups

Abstract

The current study investigated the relative influence of vertical versus shared leadership within new venture top management teams on the performance of startups using two different samples. Vertical leadership stems from an appointed or formal leader of a team (e.g., the CEO), whereas shared leadership is a form of distributed leadership stemming from within a team. Transformational, transactional, empowering, and directive dimensions of both vertical and shared leadership were examined. New venture performance was considered in terms of revenue growth and employee growth. The first sample was comprised of 66 top management teams of firms drawn from Inc. Magazine's annual list of America's 500 fastest growing startups. The seconded sample consisted of 154 top management teams of startups randomly drawn from Dun and Bradstreet, which compiles the most extensive database available for identifying relatively young American-based ventures. Both vertical and shared leadership were found to be highly significant predictors of new venture performance. Further, hierarchical regression analysis found the shared leadership variables to account for a significant amount of variance in new venture performance beyond the vertical leadership variables. These results were consistent across both samples, thus providing robust evidence for the value of shared leadership, in addition to the more traditional concept of vertical leadership.

Women and power: a theoretical approach using the example of copreneurial businesses

“…But, for the vast majority of authors, dual governance can increase efficiency (Ensley et al, 2003(Ensley et al, , 2006. The following propositions test the positive consequences of sharing formal and informal forms of power.…”

Rethinking distributed leadership: dimensions, antecedents and team effectiveness

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“…Also, authors often use different terms, or the same terms carrying different meanings, for this diffused leadership phenomenon, such as shared (Pearce and Conger 2003;Ensley et al 2006;Pearce et al 2008), collective (Hiller et al 2006), and dispersed (Konradt, 2014). For example, 'shared leadership' (SL) is used by Pearce et al (2008) as virtually interchangeable with 'decentralized' leadership, in contrast with 'vertical' or 'centralized' leadership (Pearce et al 2008: 355).…”

“…The terms used to describe DL models include shared leadership (Pearce and Conger 2003;Ensley et al 2006;Pearce et al 2008;Nicolaides et al 2014) and collective leadership (Hiller et al 2006). Shared leadership (SL), for example, is a widely used term in the USA, especially in nursing, medicine and psychology (Bolden 2011).…”

Change Leadership: Oxymoron and Myths

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