Growing Pains in Scale-Ups: How Scaling Affects New Venture Employee Burnout and Job Satisfaction
Author(s) Information
R. Mohamed Genedy, CeFEO - Centre for Family Entrepreneurship and Ownership, Jönköping International Business School, Jönköping University, Sweden
Karin Hellerstedt, CeFEO - Centre for Family Entrepreneurship and Ownership, Jönköping International Business School, Jönköping University, Sweden
Lucia Naldi, CeFEO - Centre for Family Entrepreneurship and Ownership, Jönköping International Business School, Jönköping University and CenSE - Centre for Entrepreneurship and Spatial Economics, Jönköping International Business School, Jönköping University
Johan Wiklund, Syracuse University, Martin J. Whitman School of Management, Department of Entrepreneurship and Emerging Enterprises,
Journal
Journal of Business Venturing (2024)
Summarizing the findings of your paper
Drawing on the scale-up, firm growth, and well-being literature, we take an employee perspective to show that scaling is positively associated with employee burnout, and negatively with job satisfaction.
Research Questions
How does scaling affect employees in terms of burnout and job satisfaction?
What We Know
Although academic interest in organizational scaling is growing, extant research has focused primarily on the antecedents and processes, neglecting how employees experience scaling. Drawing on the scale-up, firm growth, and well-being literature, we take an employee perspective to examine the impact of scaling on employee burnout and job satisfaction.
Novel Findings
Using a sample of 10,908 new venture employees in Sweden, we show that scaling is positively associated with employee burnout, and negatively with job satisfaction. We also show that the link between scaling, burnout, and job satisfaction depends on whether the employee is in a managerial position or has prior new venture experience.
Novel Methodology
We offer a novel methodology in operationalizing scaling. Specifically, we employ a generalized method of moments (GMM) model, a dynamic panel data model to detect the predicted growth trajectory used to measure scaling.
Implications for Practice
Our research indicates that in scaling ventures, where HR practices tend to be less structured and developed than in larger corporations, there is a pressing need to focus on developing effective HRM practices. When it comes to non-managerial roles, having prior experience in startups proves to be a valuable advantage. Conversely, when it comes to managerial roles, a focus on job-specific skills and expertise is often more critical than prior startup experience. Moreover, employees in non-managerial roles with limited prior startup exposure may benefit from tailored HRM support to effectively adapt and thrive within the dynamic environment of scaling ventures.
Implications for Policy
This paper questions “the more scaling, the better” assumptions, partly responsible for OECD policies that, alongside promoting scaling, also focus on enhancing employee well-being. Our findings indicate that while scaling may align with one policy (i.e., prioritizing scaling), the effects on employees may run counter to another.
Implications for Research
This study offers a definition and operationalization of scaling that can be used by future research on scaling. The organizational psychology literature has can offer many more (including much finer-grained) findings and predictions that can provide valuable insights into scaling.
Full Citation
Genedy, M., Hellerstedt, K., Naldi, L., & Wiklund, J. (2024). Growing pains in scale-ups: How scaling affects new venture employee burnout and job satisfaction. Journal of Business Venturing, 39(2), 106367.
Abstract
Although academic interest in organizational scaling is growing, extant research has focused primarily on the antecedents and processes, neglecting how employees experience scaling. Drawing on the scale-up, firm growth, and well-being literature, we take an employee perspective to examine the impact of scaling on employee burnout and job satisfaction. Using a sample of 10,908 new venture employees in Sweden, we show that scaling is positively associated with employee burnout, and negatively with job satisfaction. We also show that the link between scaling, burnout, and job satisfaction depends on whether the employee is in a managerial position or has prior new venture experience.
Web URL for the Article
https://www.sciencedirect.com/science/article/pii/S0883902623000812