Too Much Collaboration Can be Harmful to New Ventures

Collaboration is commonly encouraged throughout the world of entrepreneurship especially for entrepreneurs with new ventures. There are many benefits to collaboration, such as gaining different perspectives on problems or obtaining resources not readily available. However, research conducted by Johan Wiklund, the Al Berg Chair and Professor of Entrepreneurship at Syracuse University‘s Martin J. Whitman School of Management, and colleagues, found that too much collaboration can be harmful to new ventures.

Wiklund and his Whitman School colleague Alex McKelvie, professor of entrepreneurship, Wei Yu ’18 Ph.D. and Rob Nason ’14 Ph.D., along with Michael Hitt (Texas A&M University), conducted their study in Sweden. They surveyed new ventures in the technology, information technology, media and entertainment industries. Participants were asked about the role of collaboration in their businesses. A year later, the team analyzed each companies’ annual reports to review their performance. They found companies that engaged in collaboration saw limited improvements in performance.

“We could see those that had more collaboration did better up to a point, but if they were involved in too many collaborations or too intense collaborations their performance went down,” explained Wiklund.

According to Wiklund, it is important for entrepreneurs to spend sufficient time developing core competencies within their businesses that they keep to themselves. While collaboration comes with a variety of benefits, doing so can sometimes limit the control an entrepreneur has over their venture. An inter-organizational relationship, explained Wiklund, can create permeable boundaries that allow ventures to be in more control.