The new venture growth: Functional differentiation and the need for human resource development interventions

Knowledge of the timing and sequence of start-up teams' delegation of business functions in growing entrepreneurial ventures has significant implications for understanding those ventures' need for human resource development (HRD) interventions at different stages of their development. As a first step in exploring the evolution of functional differentiation in growing ventures, we analyze the extent to which 539 new businesses delegate a number of business functions. The start-up teams retain the marketing and marketing-related functions (marketing, sales, advertising, pricing and bidding, and new product development) in the majority of all firms with less than $10 million in sales. This group of functions ranks second only to general planning as a function retained. Three major size groups of emerging small businesses with distinctly different levels of functional delegation have been identified. There was no difference in the patterns of delegation of functions between manufacturing and service firms.