Entrepreneurial team locus of control: diversity and trust

Abstract

Purpose – The purpose of this paper is to examine how internal locus of control (LOC) as a well-established entrepreneurial personality trait at team level impacts team performance (effectiveness and efficiency) in Austria. In addition, it investigates the interaction effects of LOC diversity and affective trust on the internal LOC-performance relationship. Design/methodology/approach – Data originated from 44 entrepreneurial teams based in nine business incubators in Austria. Partial least squares (PLS) structural equation modelling was used to estimate the model. Findings – Results indicate that higher internal LOC at team level promotes entrepreneurial team effectiveness and efficiency. However, team efficiency is increased when such teams possess a high internal LOC and low LOC diversity. Affective trust is identified as a crucial component in enhancing entrepreneurial team effectiveness, especially when the team has a high internal LOC. Originality/value – This study extends research on internal LOC at team level by investigating it as a predictor of entrepreneurial team effectiveness and efficiency. Second, it systematically analyses if and how diversity in internal LOC affects team performance in an entrepreneurial team context. The paper takes a pioneering step by testing a key methodological contribution of addressing the inherent bias in measuring diversity of small teams. Finally, it is one of the first studies to show not only the importance of affect in general, but also the trust based on affect for entrepreneurial team dynamics.