Cultural Spawning: Founders Bringing Organizational Cultures to Their Startup

Abstract

In searching for the sources of heterogeneity in organizational cultures, one possibility is that new ventures show a cultural spawning of incorporating elements from the culture of the organization that the founder left (the parent) when starting the new venture. Such a genealogical effect would explain why some organizational cultures remain different, despite the opportunities to learn cultural elements from other organizations. This study investigates whether and under what circumstances such cultural spawning occurs. We argue that cultural spawning occurs, but with varying strength, depending on the founder and the culture of the parent organization. Applying the cultural toolkit perspective, we predict that it is stronger when founders have a longer tenure in the parent organization, the parent culture is more internally coherent, and the parent culture is more atypical, compared with other organizations. These ideas were tested with a sample of U.S. technology startups in Crunchbase. Natural language processing of Glassdoor employee reviews was used to identify the cultural elements of the technology companies. The analysis demonstrates that cultural spawning occurs and reveals previously unexplored contingencies of cultural transmission through congruency and atypicality. It contributes to research on new venture formation and organizational culture. Funding: Financial support from the Rudolf and Valeria Maag Endowment is gratefully acknowledged. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2023.17771 .