Employment system mental models in organisation building : founder’s mental models of employment in New Zealand biotechnology start-ups

Abstract

The majority of biotechnology firms are founded by scientists and the organisations are characterized by high human capital density. The existing research has focused on these founders and their impact on the human and social capital within their firms (Powell, 1996; Murray, 2004). However, there are significant gaps in understanding the unique requirements and employment demands of biotechnology start-ups. While there have been several studies investigating the organisation and building of the employment system of entrepreneurial firms (e.g., Burton, 1995), our understanding of the role founders play in building of the employment system still remains limited particularly in the context of biotechnology. The focus of this study is how founders of biotechnology companies organise and build the employment system in their start-up ventures. Based on a study of three biotechnology firms and their founders, this thesis adopts an integrative cognitive methodology in studying the founder’s role in the employment system creation within their new ventures. This study builds on an in-depth multi-method case study approach in examining founders’ mental models of the employment system and the organisations that they have built. The findings suggest that founders approach the human capital systems within their firm with a specific mental model of human capital organisation. These mental models of the employment system emphasise informal and formal managerial practices that are designed to achieve various aspects of the organisation’s culture and goals. The findings also suggest that founders’ mental models of employment systems are influenced by a variety of determining factors that include strategic choice, environmental influences and individual backgrounds that shape the nature and content of the employment system they form.