Entrepreneurial Team Embeddedness: Construct, Measurement, and Its Effects on Venture Performance

The entrepreneurship literature consistently finds that, on average, entrepreneurial teams are more likely to develop successful ventures than individual entrepreneurs. However, very little is known about how entrepreneurial teams maintain stability and retain founders during the early stages of development. We develop a construct for “team embeddedness” in entrepreneurial teams that refers to the combined forces that influence and constrain the behaviors of team members. Team members are connected with each other through various ties that greatly affect entrepreneurial actions and the venture’s outcome. In Study 1, we develop a measure for team embeddedness in entrepreneurial teams using a sample of 14 teams in China. Exploratory and confirmatory factor analyses confirm the appropriateness of this measure for “team embeddedness” including five dimensions: (1) emotional embeddedness (EE); (2) benefit embeddedness (BE); (3) structural embeddedness (SE); (4) cognitive embeddedness (CE); and (5) normative embeddedness (NE). In Study 2, we examine the effects of team embeddedness with a field sample of 177 entrepreneurial teams. We find that perceived team efficacy fully mediates the relationships between four dimensions of team embeddedness (i.e., EE, BE, SE, and CE) and entrepreneurial team performance. Moreover, environmental uncertainty plays a critical role in the relationship between team efficacy and team performance.