Master Degree Project in Management

The Startup Paradox

A qualitative study of institutional logics in a growing organisation

Veronica Jansson and Malin Ottosson

Supervisor: Ola Bergström

Graduate School

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The Startup Paradox

A qualitative study of institutional logics in a growing organisation

Veronica Jansson

Master of Science in Management, Graduate School, School of Business,

Economics and Law, University of Gothenburg

Malin Ottosson

Master of Science in Management, Graduate School, School of Business,

Economics and Law, University of Gothenburg

Abstract

Research on organisational growth suggests that companies follow a predictable pattern of

organising, where the degree of formalization increases as organizations grow. This study

provides an alternative perspective to organisational growth by analysing the case of a

company, that has grown from a handful to over 3500 in a period of ten years, through the lens

of institutional logics. Data has been collected by conducting over 30 in-depth

interviews, multiple observations and reviews of internal documents in an organisation. The

case study illustrates, what we call the startup paradox, the problem associated with expanding

the business, while at the same time maintaining the innovative organisational structure – the

startup logic – that once was the source of uniqueness and organisational identity. The case

study shows how new institutional logics were introduced in the company, as new hires entered

the organisation with different norms about how to best organise, what we call institutional

backpacks. Thus, institutional logics changed according to changing composition of the

workforce, rather than through some predetermined organisational structure based on size or

complexity. The study, thus, contributes with new insights to the research field of both

organisational growth and institutional logics.

Key words: Organisational Growth, Institutional Logics, Startups, Institutional Work

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Introduction

Small and medium sized enterprises are a major driver of the economy since they contribute to

employment growth at a higher rate than large companies. Startups and SMEs generate 67 per

cent of the total revenue in the EU, resulting in a significant interest from international

organisations to trigger growth and thus enhance their economic performance (Farouk &

Mohamed, 2011). Therefore, the growth of startup companies have been of large interest in

both the academic and the corporate society (Farouk & Mohamed, 2011). The important

economic contribution of growing companies has resulted in substantial research about

organisational growth (e.g. Greiner, 1972; Dobbs & Hamilton, 2006; Puhakka & Sipola, 2011;

Tam & Gray, 2015). Several models and perspectives have been developed, for example

stochastic, deterministic and stages models (Dobbs & Hamilton, 2006; Barringer, Jones &

Neubaum, 2005; Greiner, 1972). One of the most well-known models is the stages model called

the “Organisational Life Cycle” (OLC), developed by Harvard professor Larry Greiner in 1972.

The OLC assumes that growing organisations go through five predictable stages of growth and

view organisations as rational entities (Greiner, 1972; Farouk & Mohamed, 2011). The OLC is

based on a biological metaphor, assuming that organisations go through predictable stages

(Greiner 1972; Farouk & Mohamed, 2011) which governs how the organisation is organised,

depending on size and level of maturity (Greiner, 1972). For example, Greiner (1972) suggests

that each phase ends with a crisis that depends on the characteristics of the organisation. The

first phase ends with a leadership crisis, which he blames on the lack of strong leaders in the

first phase which is often a result of the low number of employees in the first phase of the OLC.

However, contrary to the assumptions of the OLC, DiMaggio and Powell (1983) propose that

it is not only the organisation that is best suited for the environment or that has a particular way

of organising that succeeds, but gaining legitimacy from society is also a crucial factor for

survival. Hence, organisations are not only rational but also seeks legitimacy to survive

(DiMaggio & Powell, 1983; Zimmerman & Zeitz, 2012). Based on this, by drawing on

institutional theory this study broadens the research on organisational growth and organising

by adding an alternative perspective. More concretely, organisational growth will be

investigated from an institutional logics point of view in order to gain knowledge of how actors’

values and assumptions impact organisational growth. Researchers have emphasised the

importance of how institutional logics shape behaviours and how they can be compared to

organising principles, since institutional logics provide information of how actors are to behave

(e.g. Thornton & Ocasio, 2008; Gastel & Hillebrand, 2011; Lindberg, 2014; Battilana &

Dorado, 2010; Riaz & Qureshi 2017). Early research in the field focused on the importance of

logics as the broad organising principles in modern societies (Friedland & Alford, 1991), while

more recent work has focused on how logics evolve in a field as well as change over time (e.g.

Thornton, 2002; Lounsbury, 2007). Riaz and Qureshi (2017) ask for further research on how

institutional fields are formed, hence it was considered interesting to investigate institutional

logics in relation to organisational growth.

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Thus, using the perspective of institutional logics to investigate a growing organisation enables

for a deep understanding of the impact values, beliefs and assumptions have on

organisations. More specifically, we present the results of a case study of a company that has

faced an average growth in the number of employees of 70 per cent per year since it was

founded ten years ago. As organisational growth and institutional logics are of particular

interest, the company makes a great case to study. By conducting over 30 interviews, multiple

observations and reading internal documents, an investigation of the institutional logics present

in the organisation at different points in time has been made. The case study adds a perspective

to the research about organising and organisational growth by using the lens of institutional

logics. Hence, the purpose will be achieved by serving to answer the following research

question:

“How does institutional logics change as organisations grow?

This thesis is structured as follows: first, previous studies of organisational growth is presented

followed by the theoretical framework of institutional logics and a layout of the methodology

used. In addition, empirical findings are presented and analysed shortly. The thesis continues

with a discussion, and finishes with a conclusion and suggestions for further research. In this

paper, growth is referred to as the increase in number of employees.

Previous Studies

Organisational Growth

There has been a lot of research trying to explain how organisations grow, resulting in several

growth models (e.g. Greiner, 1972; Barringer et al., 2005; Dobbs & Hamilton, 2006; Farouk

& Mohamed, 2011). One of the most researched models of growth is the OLC which presents

growth stages that organisations go through over time in a predictable and consistent manner

(Greiner, 1972; Tam & Gray, 2015). For example, Greiner (1972) identified five phases of

growth with different characteristics, where each phase is made up by a period of relatively

stable growth followed by a crisis when major organisational change is argued needed for the

company to keep growing. Zimmerman & Zeits (2012) challenge this reasoning by instead

suggesting that companies face a legitimacy threshold rather than a crisis finishing each phase.

Further, Davila, Foster and Jia (2010) found that as organisations grow to be between 50 and

100 employees, work processes will become insufficient and thus have to change whereby

organisations must prepare for future challenges in order to be sustainable. In accordance,

Gibson, Finnie and Stuart (2015) argue that as the number of employees increases, work grows

more complex whereby it will become more difficult to separate actions in the organisation.

Continuing, Battilana and Dorado (2010) explain how a larger organisation equals larger

challenges and in addition, Gibson et al. (2015) suggest that complexity rises at a faster rate

than the increase of the size of the company. Greiner (1972) argues that organisations change

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their focus as a result of growth, for example management and communication structures tend

to evolve from flexible to more bureaucratic.

According to Baron and Hannan (2002), entrepreneurs, especially startups, often create,

implicitly or explicitly, their own organisational model or blueprint of how work should be

executed. The authors did not find one general notion of how to organise in startups but rather

express how all founders have an idea, a blueprint, that varies. In addition, the authors found

that organisational blueprints can cause problems when a company starts to grow since the

blueprint might not always fit the organisation as both dynamics of the environment and

organisation change (Baron & Hannan, 2002). It is often young companies that are

characterised by shared tasks, relaxed hierarchy, face-to-face communication and informal

decision-making. Contrarily, older companies are characterised by specialised tasks, strict

hierarchy, complex systems and centralised decision-making (Gibson et al., 2015).

Moreover, DiMaggio and Powell (1983) indicate that organisations depend on gaining

legitimacy by following the rules and belief systems in the environment in order to survive. For

example, following the law is a way for organisations to gain legitimacy from external actors.

When legitimacy is gained, an organisation crosses a legitimacy threshold (Zimmerman &

Zeitz, 2012). To exemplify, startups often have few resources in the early stage of their

existence, whereby if the startup can do activities at a small cost while still increasing

legitimacy, the company has passed a legitimacy threshold. Once a threshold is crossed the

organisation is in a better position to gain even more legitimacy and thus continue to develop

(Zimmerman & Zeitz, 2012). What is perceived as legitimate in a field is decided by the

institutional logics present as institutional logics shape assumptions, values and beliefs

(Thornton, Ocasio and Lounsbury, 2012). Based on this, it is of great interest to research how

institutional logics relates to the growth of a company.

Theory

Institutional Logics

Institutional logics have taken a central role in institutional research, emphasising the

importance of the social context in shaping behaviours (Lindberg, 2014). According to

Thornton and Ocasio (2008), institutional logics have become a “buzz word” in institutional

theory since many researchers have investigated the concept in various ways. For example,

theory on institutional logics has been basis for research on highly diverse topics such as the

healthcare industry (Reay & Hinings, 2009), mutual funds (Lounsbury, 2007), the higher

education publishing industry (Thornton & Ocasio, 2008), science (Berman, 2012), and

postsecondary governance (Bastedo, 2009).

Institutional logics are defined as “the socially constructed, historical patterns of material

practices, assumptions, values, beliefs, and rules by which individuals produce and reproduce

their material subsistence, organise time and space, and provide meaning to their social reality”

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(Thornton & Ocasio, 1999). Scott (2001) provided a shorter definition, namely “the belief

systems and related practices that predominate in an organizational field”. Further, both

individuals and organisations use institutional logics when evaluating and making sense of their

social reality. The concept of evaluation involves judging things, institutions and people on

several dimensions. Making sense of social reality refers to “creating a coherent account of the

world around us by categorizing the things we see, do, and feel, and applying patterns to connect

this to things we’ve seen, done, and felt before, or anticipate seeing, doing, and feeling in the

future” (Haveman and Gualtieri, 2017).

Continuing, researchers have used both a macro perspective and a practice perspective to define

institutional logics, (Thornton & Ocasio, 1999; Lindberg, 2014; Haveman & Gaultieri, 2017)

although in this study the practice perspective will be used. Haveman and Gaultieri (2017)

explained different institutional logics through a practice perspective by defining institutional

logics in French cuisine by defining the core values and form of organisation. For example,

under the classical cuisine logic, restaurateurs held power over chefs and under the nouvelle

cuisine logic, chefs claimed autonomy over restaurateurs (Haveman & Gaultieri, 2017). In

addition, Thornton et al. (2012) use sources of legitimacy, sources of authority and basis of

strategy to explain some of the oldest institutional logics, namely family, community and

bureaucracy logic. The bureaucracy logic will be explained further. Friedland and Alford

(1991) explain it as rational, regulating and with a high level of hierarchy. The bureaucratic

logic emphasises activity based on laws and rules, and the importance of processes (Friedland

& Alford, 1991). In addition, Baron, Hannan & Hsu (2007) explain how the bureaucracy logic

promotes power and status as rewards are allocated based on responsibilities associated with

formal roles rather than qualities. The bureaucracy logic is argued by Baron et al. (2007) to

depersonalise interactions, formalise and standardise practices and to emphasise performance

criteria that are both objective and verifiable.

Furthermore, previous research in the field has studied the processes of how logics govern the

actions of social actors (Lounsbury, 2007), how multiple logics in a field affect each other

(Gastel & Hillebrand, 2011; Lounsbury, 2007) and most recently how logics are enacted in

practice (Lindberg, 2014; Raviola & Dubini, 2015). Studies with focus on change and logics

have also been conducted (Battilana and Dorado, 2010; Lindberg, 2014), but there has been

little, if any research about how a central logic changes and affects the social actors and thus

the direction that an organisation grows in. By using institutional logics as an analytical

framework it can aid explaining questions of how organisational actors are influenced by their

situation as institutional logics present frames of reference of actors’ choices for sense making,

the vocabulary they use to motivate action, and their sense of self and identity (Thornton et al.,

2012). In addition, by using institutional logics as a framework it allows analysis on multiple

levels: individual, organisational, field and societal. It also assumes that institutional orders

have both symbolic and material elements (Thornton et al., 2012), which allows for a deep

analysis that includes multiple elements.

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Competing and coexisting logics

There is often one dominant logic shaping the behaviours of actors, but some scholars argue

that there can be multiple, not as dominant, logics struggling and competing for dominance

(Lounsbury, 2007; Gastel & Hillenbrand, 2011). Thus, institutional fields are point to plurality

and complexity, which often involves logics and actors that over time shape each other. Gastel

and Hillebrand (2011) explain how logics within an organisation can create internal

contradictions and tensions, which may serve as a trigger for change and give social actors

opportunities to change or alter existing institutional arrangements. As a result, fields may be

characterised by ongoing change rather than stable organisations having one dominant or

multiple coexisting logics (Chang & Huang, 2016; Seo & Creed, 2002).

In addition, Battilana and Dorado (2010) argue that some organisations are hybrid

organisations, meaning that they combine different existing institutional logics in new ways, as

a result of being unstable due to for example their changing environment. They argue that no

organisation can rely on any “ready-to-wear” model, whereby they should try to find the

balance between logics in the organisation in order to avoid “mission drift”. As a result,

organisations often start mixing with the institutional logics present in order to find the most

suitable balance between them (Battilana & Dorado, 2010). It is when organisations try to find

a perfect balance that hybrid logics often arise. Connected to this, Upton and Warshaw (2016)

research the emergence of hybrid logics in organisations when they investigated three US

research universities and their organising principles. They found evidence of a blend of an

industry and a social institution logics which created a new form, thus a new institutional logic.

The new form was a hybridisation of the two prior logics which they argue helped

understanding how universities can manage internal tensions (Upton & Warshaw, 2016). Thus,

two institutional logics may generate a new, hybridised logic when an organisation changes

(Battilana & Dorado, 2010).

However, even if a new hybrid logic emerges, the previous dominant logic will continue to be

of importance in the organisation. Reay & Hinings (2005) highlight that “although a new

dominant logic may arise as part of a change process, the previously dominant logic will

continue to be an important factor”. Thornton et. al. (2012) also argue for the importance of

historical factors when institutions change and how logics influence each other. For example,

they explain how a state was highly influenced by religion in the early ages when religion was

a strong logic (Thornton et. al., 2012). Thus, a logic that is the legacy of an earlier change

process can remain competing and play a role in a new change process (Gastel & Hillebrand,

2011). Recent studies have also focused on studying the co-existence of multiple logics in a

field (Lounsbury, 2007; Gastel & Hillenbrand, 2011) as there can be several logics in a field

without competing with each other (Lounsbury, 2007; Gastel & Hillenbrand, 2011). For

example, Riaz and Qureshi (2017) investigate the interaction between an emerging institutional

logic and existing dominant logics in a field. In addition, Lounsbury (2007) reasoned in his

research that two competing logics were both argued appropriate in the mutual fund industry.

Lounsbury (2007) argued that as they both simplified for how the funds responded to practice

the two logics could co-exist.

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Institutional Work and Institutional Identity

Early research of institutional theory highlighted the recursive relationship between processes

of institutionalisation and individual actions (Meyer & Rowan, 1977). Drawing on this, the

concept of institutional work offers an opportunity to develop a deeper understanding of how

people and social interactions connects to institutions and their structure (Lawrence, Siddaby

and Leca, 2011). As logics provide social actors with rules of appropriateness of making certain

actions (Glynn & Lounsbury, 2005), social actors can affect institutional logics in a field and

create new institutions (Riaz & Qureshi, 2017). Gawer and Phillips (2013) further explain that

when actors consciously act to change or affect institutions it is called institutional work.

Lawrence and Suddaby (2006) describe institutional work as “the broad category of purposive

action aimed at creating, maintaining, and disrupting institutions”. Thus, institutional work can

be centrally concerned with understanding the practices by which actors engage to maintain

institutions as well as the actions associated with creating new institutions or disrupting existing

ones (Lawrence & Suddaby, 2006).

When organisations change and evolve due to the struggles between competing institutional

logics, there are many actors involved who together through negotiations and other types of

institutional work, try to decide upon a new situation (Gastel & Hillebrand, 2011). Thus the

concept of institutional work stems from the belief that institutions are the product of more or

less conscious human action (Gawer & Phillips, 2013; Lawrence & Suddaby, 2006). Lawrence

and Suddaby (2006) state that the development of new institutions requires institutional work

from many of the actors present in an organisation. In addition, Lawrence et al (2011) explain

how institutional work can be both coordinated and uncoordinated. Lawrence and Suddaby

(2006) highlight a need to understand more about how actors can manage to navigate within

their organisational field. Therefore, it is for example of interest to understand why, in the same

organisation, some individuals seek to maintain institutions while others do institutional work

in order to disrupt the same institution (Viale, Suddaby and Gedron, 2012).

Studies of institutional work also explore processes of institutionalisation where actors modify

their belief systems and offer or adapt to new arrangements (Chang & Huang, 2016). For

example, Gawer and Phillips (2013) found, when doing research at Intel, that in order to

successfully change an institutional logic there must also be a change in the identity. While

organisations may attempt to change practices in response to changing logics, it is through the

prism of their identity that members make sense of the practices (Gawer & Phillips, 2013). The

adoption of new practices may therefore encounter resistance when members believe that there

is a conflict between new practices and the institutional identity (Fligstein, 1997; Gawer &

Phillips, 2013). Institutional identities also shape the understanding of who can legitimately

perform what practices (Battilana & Dorado, 2010). Thereby, Battilana and Dorado (2010)

recommend that organisations should hire people who have worked in organisations that work

in accordance with the desired institutional logics since these people are likely to have

capabilities that the organisation can leverage. However, they are often carriers of institutional

logics from their previous organisation and can thus have preconceived notions regarding

expectations and behaviours in the organisation (Battilana & Dorado, 2010). Thus, as

organisations involve logics and actors that over time shape each other due to institutional work

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(Thornton & Ocasio, 2008), it is of interest to investigate how institutional logics change as

organisations grow.

Methodology

Design of the study

In order to answer the research question, a qualitative case study has been conducted with the

focus of understanding the dynamics of the setting, institutional logics and the company. The

case study approach allows for a close link to empirical evidence and to accurately test and

generate theory (Flyvberg, 2006; Eisenhardt, 1989). Furthermore, the qualitative research has

had a constructionism approach as the thesis focus on how a phenomenon is brought into being

and on the processes through which social realities are constructed and sustained. In line with

research by Silverman (2013), the constructionism approach helped understanding the practical

activities of the case company, which was favourable for the development of the study.

Data Collection

The collection of data started at the case company, where we, the authors, were situated during

the whole process. In the beginning, multiple meetings with various key persons were held in

order to gain insight in the company, its processes and structure. Together with our key

stakeholders we formulated an aim of the research which focused on finding quantitative

efficiency metrics suitable to help the company optimise for speed and impact. We continued

by conducting interviews with managers with the aim of getting insight to for example, how

work processes were structured. After analysing and reflecting about the first interviews it

became evident that there were other forces rather than quantitative metrics that affected the

efficiency in the company. Thus, in consultation with our stakeholders, we decided to change

the focus of the research to the aim of investigating what forces have influenced the company

during its development. As a next step, more interviews were held with people in the company,

and in order to investigate the new focus area in depth, the interviewees were divided into two

groups. The criteria for the interviewees in the first group was to have worked for a long time

in the company in order to understand how the company has grown and developed. The criteria

for the interviewees in the second group was to have worked in the company for less than two

years. The selection of interviewees was done in dialogue with the supervisor at the company.

She appointed suitable persons to interview, and the gathering of research subjects continued

by snowball sampling in dialogue with the interviewees. By interviewing people with different

experience in the company, it was argued easier to understand what guides them and whether

this has changed throughout their time with the company.

All interviews were qualitative, semi-structured and lasted for approximately 30-90 minutes.

All respondents were interviewed once, except from some of the respondents who were

interviewed twice because of his or her expertise in the area. The interviews were done in person

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at the case company or through Google Hangouts. In order to aid the execution of the interview

and make sure that attention was put in the right direction and the appropriate themes were

brought up, we created interview guides. The interview guides included broad, open-ended

questions in order to get an overview of the research area. Therefore, the interview guides were

modified throughout the research period. However, interviews were always semi-structured, in

according to recommendations by Ryen (2011), in order not to get too focused in one area and

risk to miss other important inputs. Silverman (2013) states that a risk when using an interview

guide is that it can restrict the interviewer, thus interviews departed from the guide when

needed. All interviews were recorded by electronic devices which, according to Watson (2011),

enables greater accuracy and better captures verbal statements compared to regular notes. The

recordings were made with permission of the interviewees and were made anonymous. Both

authors have been present during all the interviews which made it possible to take

complementing roles whereby one took a more active and managing role and the other focused

on follow-up questions.

When conducting the interviews, ethical matters were taken into consideration regarding

integrity, voluntariness, anonymity and confidentiality of the respondents and their

contributions to the study, as this is recommended by Bryman and Bell (2013). Before the

interviews, all respondents were clearly informed about the purpose of the interview, how the

interview situation would look, that the conducted material only were to be used in research

purpose, and that the thesis will be published. Further, due to confidentiality in the

entertainment business all respondents are made anonymous, because Bryman and Bell (2013)

highlights the potential inconvenience that might affect both individuals and the company from

the revealed information. Therefore, the relevant information about respondents have been

limited to their time at the company and their role. In addition, the name of the case company

is also made anonymous as demanded by the company. Thus, we will refer to it as “the

company” in the study.

In addition, since we were situated at the case company during the whole thesis process we

were given exclusive insight and the opportunity to get a deep understanding about values,

beliefs and assumptions in the company. Also, a few structured observations were made in order

to get an even deeper and more unbiased understanding of the processes that shape the

company. For example, one observation was made at an off-site management meeting with the

focus area of relations between employees in different functions within the company. Also,

observations were made at the office to fully understand the work processes and structure.

These observations allowed us to gain practical knowledge which made it possible for a deeper

analysis.

Data analysis

In order to analyse data, Grounded theory was chosen as the appropriate method as it, according

to Martin and Turner (1986), addresses the complexities of the organisational context.

Grounded theory allowed us to develop a theoretical account of the studied themes while

grounding the account in empirical data. Grounded theory helped us capture the understanding

of others, and was an approach well suited for managing the large amount of qualitative data,

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since it, according to Turner (1981), enables for comparative analyses. We believed it was

important to choose a method that allowed for variations in contextual factors as the interviews

were conducted with people having differing roles and experiences at the company.

Moreover, almost all interviews were conducted before focusing on the theoretical framework

in order to enable the empirics to drive the study forward. We transcribed interviews

continuously and the collected data was coded in order to find recurring themes, as Silverman

(2013) suggests that this simplifies the work. We used selected coding as suggested by Martin

and Turner (1986) which allowed us to focus on relevant data. Having coded the data, we found

several themes, for example clarity in roles, growth, accountabilities, structure,

autonomy, aligned autonomy, values and work processes.

We categorised the recurring themes and combined the codes into wider concept groups,

enabling for comparison and identification of patterns, as supported by Bryman and Bell (2013).

We found the most recurring patterns to be autonomy, aligned autonomy, structure and growth

which created the basis for our analysis. When analysing and comparing the empirical findings,

we focused on letting empirics create a ground for the study. In the beginning we analysed the

collected data and found different arguments regarding the structure of the company as there

were various opinions of what level of autonomy was needed. In order to understand the basis

of these assumptions, we started to investigate and outline the history of the company, and in

addition the number of years the interviewees had been working in the company. This was done

in order to see if there were any connections between the searched for structure and the length

of employment. We continued to analyse how the company’s history related to the structure,

and decided to use the lens of institutional logics in order to gain a deeper understanding of the

company’s evolvement. When we looked through the lens of institutional logics it enabled us

to find a relationship between institutional logics and organisational growth.

Case Company

Background

The case company is a digital rights management company. The company was founded in 2006

by two young Swedish entrepreneurs who wanted to create a product that enabled for everyone

to listen to music everywhere, at all times and in addition taking a stand against illegal sharing

of music. The two entrepreneurs started developing the product together with just a handful of

people in a small apartment in Stockholm and in 2008, the product was launched on the Swedish

market. Today, the company is the world’s most popular music streaming service. It acts in an

environment characterised by strong competition, whereby innovation and creativity are

important. The company has truly been a success story and has been able to grow from a handful

of people in 2008 to over 3500 employees in less than ten years (Interviewee 1).

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The section below will go through the company’s history during the last ten years. It will focus

on the growth in number of employees and share some organisational and structural highlights

that have been important for the company and its development.

Happy Engineers

When the product was launched in 2008, the people working in the company called themselves

“a bunch of happy engineers” that simply enjoyed working on the product. The number of

employees was so small that it enabled for everyone to have insight in each other’s work as

they could talk to each other and set the strategy together. The structure was naturally flat and

everyone worked autonomously. After a short period of time it became evident that the product

was a great success, whereby the company started to grow quickly in number of employees and

in 2010, only two years after the launch of the product, they had already hired over 100

employees. Up until this period, a thought out structure in the company did not exist. However,

soon it became evident that the increasing number of employees complicated for leaders to get

everyone involved and set the strategy together, and in addition making sure that new hires

knew what they should be working on. In order to solve the problem, employees were structured

into teams to simplify work for both leaders and employees.

“The autonomous teams were just a way to handle the fast growth. We did

not have time to keep track of what everyone was doing so we gave the teams

an assignment and basically hoped that they kept that direction. The

autonomous way of working became more like a survival mechanism than

anything else.” (Interviewee 5)

As the interviewee explained, the structure was not a strategic choice, but rather a way to handle

the fast growing number of people in the company. They kept working autonomously and

independently, as they had from the beginning. However, instead of working individually they

now worked in teams as well. The teams decided for themselves what to build, how to build it

and how to work while doing it, resulting in a lot of freedom. The teams had their own mission

and purpose and employees were encouraged to make decisions on their own and control the

direction of the product. Autonomy was always kept at top of mind and had become a “taken

for granted” concept characterising the organisation and most people within it.

“I would say that we have a quite unique structure and a culture which focus

on autonomy” (Interviewee 7).

The autonomous structure characterised both the culture and work processes at the company,

as quoted. The perceived unique way of working attracted a lot of talented engineers who were

inspired to work in companies similar to Google and Apple which were known as being playful

and innovative (Interviewee 10). This, together with the great success of the product resulted

in an increase in employees with approximately 150 per cent in 2012. The new hires were

diverse as they came from different countries and had different experiences. Some employees

came directly from startups, although many of the new hires came from more traditional

corporations characterised by bureaucratic work processes and structures. Many of the new

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hires who were used to structures characterised by bureaucracy and hierarchy found the

company attractive due to their unique, autonomous ways of working (Interviewee 10).

However, as a result of the increased number of employees, the autonomous structure started

to become questioned in 2013.

“It is a large focus on teams and their autonomy, they are supposed to be

completely autonomous and take as many decisions as possible which is still

a very culturally strong opinion. It is almost like it becomes a problem when

we are doing large projects or redirecting teams, friction always appears when

we are trying to direct people who think that they are supposed to have more

autonomy”. (Interviewee 4)

The quote demonstrates how new hires started to doubt the level of autonomy in teams and

argued that it was insufficient in meeting the needs of the organisation. The apprehended risk

with teams being completely autonomous with their own mission and goals was that teams

easily forgot about the wide, holistic company perspective. Complete autonomy in an

organisation of this size was also argued to result in teams working on the same tasks or even

on contradictory projects without knowing, which resulted in decreased speed as argued by

employees.

“We were like, wait a second, we have a lot of teams that do a lot of things

now but it doesn’t fit so well together. Like, every team perform excellence

but if you look at the big picture you’ll get 15 different things… So we started

to talk about alignment and autonomy, and that autonomy doesn’t work if

you’re not also aligned between the teams”. (Interviewee 5)

As interviewee five explained, alignment was introduced in the company as a result of the

experienced changed needs. The company continued to grow and many of the new recruits were

hired into managing roles as the company wanted to leverage their experience and external

perspective as a way of managing growth (Interviewee 1). As some of the new leaders were

used to work in organisations with more structure they were unaccustomed to work in the

autonomous ways that were present in the company. Thus, more structure, alignment of goals

and teams was promoted together with the importance of coherence and collaboration by new

hires.

“So when I started we had just started with the small teams that were

structured after delivery. Before this there were teams in the company but

they were structured in a really confusing way. You never knew what type of

team you were talking about or belonged to even. So after that, more

structured teams with delivery focus were introduced.” (Interviewee 4)

However, the introduction of new, more structured processes was unpopular among a large

group of employees that had been working in the company since the early years (Interviewee

7). Many of the early employees began to articulate their concerns of losing their autonomous

ways of working as was argued successful in the startup phase. For example, many employees

13

were afraid that they were going to lose their autonomous thinking, agile ways of working and

fun culture when becoming bigger.

“We need to grow significantly but we still want to have fun. Is it possible to

grow larger without losing the nice and fun atmosphere we have? Will we

become corporate and boring whether we want to or not? I’d like to hope the

answer is no and we shall try our hardest to stay fun and agile.” (Interviewee

5)

As the quote illustrates it was of great importance for the employees to keep their early

autonomous structure. Not becoming “big, slow, boring and soul-less at any cost” was

articulated to the company and in some forums the phrase ”avoiding the dark side” was used.

The mentality communicated was that the company should grow by autonomy by seeing teams

as mini startups and the company as an incubator. Following is an example of how one of the

early employees viewed the balance between alignment and autonomy.

“There is generally a compromise between autonomy in teams and coherence

between teams for big scale efficiency. We will push toward autonomy and

away from coherence since I believe we must leverage the creativity of our

colleagues. Strict coherence is for companies who do not hire the best, most

creative with great passion for their tasks.” (Interviewee 5)

Chaos or Stuck in Bureaucracy

In 2014, the company had worked together with a consultancy firm to create videos that in a

pedagogical way explained the company’s unique structure and work processes. The videos

were released externally in 2014 and explained everything from the unique names of teams,

internal processes, size of teams and the values shaping the culture and actions in the company

at that time (Engineering culture, 2014). One of the main takeaways from the videos was how

the concept of autonomy was constantly highlighted. Autonomy was argued to be a

motivational factor since it let decision-making happen locally in the teams instead of via

managers and committees. The videos argued that this resulted in a a fast organisation with

motivated employees (Engineering culture, 2014). In addition, autonomy helped the

organisation scale without getting slowed down with dependencies and coordination

(Engineering culture, 2014).

At the same time, the videos also promoted the importance of the concept of alignment when

explaining the structure and work processes in the company. The videos communicated that

teams were supposed to be “loosely coupled but tightly aligned” (Engineering culture, 2014).

However, alignment was seldom talked about alone but was often validated by adding the

concept of autonomy next to it and stating that the stronger alignment, the more autonomy will

be possible. In fact, the videos promoted a new concept that was argued to influence the

company’s structure and work processes, namely aligned autonomy. The concept of aligned

autonomy searched to strike the right balance between high levels of autonomy, individuality

14

and flexibility while at the same time answering to the need of the teams moving in the same

direction. The concept of aligned autonomy became well known in the company after the

release of the videos although the concept were given different definitions depending on the

values of the employees. Below, the concept is explained by a delivery lead at the company,

who provided one of the most frequently provided definitions of the concept.

“Aligned autonomy means that we work together towards a common goal.

We are not completely autonomous, we have autonomous teams but the teams

cannot just do what they want, instead they have limitations and they have a

goal and they have to sync with the other teams within the company. It's about

ensuring that we not only have super-small devices that do what they want

and are autonomous, but it is about being autonomous together.”

(Interviewee, 17)

Furthermore, the videos actually got a lot of attention both internally and externally. As a result

of the external attention, the company received a reputation of being best practice of agile

development and organisational structure when it came to enhancing innovation and research

and development. Internally, there were many employees that celebrated the newly developed

concept, but at the same time there were a group of employees who did not agree with the

statement that aligned autonomy resulted in more motivated employees and an increased level

of innovation. This group did not believe that aligned autonomy would make the organisation

better but instead they believed that it would hinder innovation and the playful culture that had

been characterising the company during its early years. This group started to become vocal and

articulated their dissatisfaction of aligned autonomy and the concept of alignment as they

argued that it would result in a top-heavy and slow organisation. Thus, they took a stand against

the message communicated through the videos.

“If everyone is perfectly aligned, it will result in a slow, bureaucratic

procedure where no one understands why they are doing what they are doing”.

(Interviewee 27)

Furthermore, during 2014, the company grew fast which resulted in that growth pain being

considered as one of the biggest challenges for the company. It came to the point that what was

considered a good idea one day might have been considered a problem the next because the

company had now grown into something different. In order to try to manage the fast growth,

employees explain how the company changed structure often, trying to come up with roles and

structures that could best answer to the changing needs and new challenges. However, during

every reorganisation, the concept of autonomy was always taken into consideration. The

company constantly searched for the lowest level of viable bureaucracy, structure and processes

while still avoiding total chaos as demonstrated in the quote below.

“As we grow, we risk falling into chaos. But if we overcompensate, and add

too much structure and process, we risk getting stuck in bureaucracy instead.

And that’s even worse.” (Engineering culture, 2014)

15

The videos argued that too much structure was negative for the company although some

structure was necessary to manage the size of the company. Members of the organisation were

still afraid of the organisation becoming too bureaucratic and hierarchical. Thus, they were

afraid of losing the characteristics that they argued had generated success in the startup phase

and made the company an attractive workplace. At the same time, aligned autonomy was

promoted as an important concept needed to manage large projects and growth. The company

started to become aware of the fact that they were growing and that the changed circumstances

generated a need for more structure. Importantly, although the concept of aligned autonomy

continues to be of large importance, the company has taken a stand from the videos as they

were argued to not correctly reflect the culture and ways of working at the company.

(Interviewee 1).

Alignment is hell: the size is the problem

By 2015, the company had grown to become a large enterprise and grew in a fast pace,

increasing the number of employees with an average of 70 per cent per year. The fast growth

had resulted in hiring of people with diverse backgrounds and differing experiences. Thus, more

new hires entered into leadership positions, some of which had previous experiences from more

bureaucratic organisations. The new hires had a hard time adapting to the autonomous structure

as it did not fully make sense to them. This was argued to be both because of their previous

experiences from more bureaucratic organisations but also since the company was not argued

to be startup anymore, thus the autonomous structure originating from the startup phase was

believed not to fit the present needs of the company. As a result of the confusion, the new

leaders started to introduce changes in the organisation based on their previous experience. One

example was the introduction of the “Rhythm”-concept which changed how strategy and

decision-making were to be managed. The Rhythm introduced companywide goals as an

attempt to create more alignment in the whole company. According to several respondents, the

Rhythm resulted in added structure in the company which made it easier for teams to collaborate

and be aligned.

“Improving the process around strategy development and deployment is a

major part of our development as we’re only effective if we’re working on

the right things. The product needs more collaboration across functions and

teams. It has become more complex compared to before” (Interviewee 27).

The Rhythm was accepted quickly by most employees in the company. One reason for this was,

according to one respondent, that the concept of aligned autonomy had been introduced in the

company at an earlier stage. Aligned autonomy had started to make sense to more employees

and had started to become widely accepted. Since the concept was first developed, multiple

small changes had been introduced in the company in accordance to the concept by new hires.

These small changes were argued to have simplified for large initiative like the Rhythm to be

accepted fast. The acceptance of the Rhythm resulted in more initiatives in the same direction

as the Rhythm, for example Objectives and Key Results (OKRs) which were introduced in

16

2017. The many initiatives resulted in more alignment in the company, as explained in the quote

below.

“In my opinion, we are heavier on the alignment part compared to before

when we had more focus on autonomy. Back then it was chaos, now we have

more alignment. We’re heavy there today” (Interviewee 4).

In 2018, managers started to consider whether the structure was optimised for the maturity of

the organisation, meaning whether it simplified for the organisation to meet the challenges

connected to a large organisation. Even though teams were argued more aligned compared to

before, there were split opinions whether the company needed more alignment or not. This

resulted in multiple reorganisations of teams into more hierarchical structures in order to find

the structure that best answered to the present needs of the organisation. To exemplify, one

manager who was hired from a company characterised by a more bureaucratic and hierarchical

structure decided to reorganise his teams since he argued the structure to be insufficient to meet

the needs of the company at that time. Hence, roles were replaced with new ones, accountability

was defined and distributed and more structure was added (Interviewee 9).

Even if many members of the company agreed that these types of reorganisations were needed,

there were still a large group of actors who tried to highlight the pros of the early ways of

organising and thus promoted more autonomy. As these actors wanted more autonomy they

started to highlight the negative sides of the new concept of aligned autonomy as shown in the

quote below.

“I believe that this alignment-thing is hell because it takes a shit loads of time

if you’re supposed to talk to 100 people and everyone is supposed to be on

the same page.” (Interviewee 5)

As explained in the section above, there were diverse opinions in the company regarding the

degree of alignment and autonomy needed in order to meet the needs of the company in the

best way. Although, management tried to manage and shed light on the importance of both

concepts. Consider for example how both autonomy and alignment was communicated in an

internal speech:

“If we want to keep growing we need to continue to adapt the organisation,

and we need to reorganise. We know that things without any autonomy isn’t

motivating, so you should be seeing more autonomy in your team but also

more alignment to improve speed of decisions. Faster faster faster” (Internal

communication)

In short, autonomy and alignment had become part of the company as a result of the fast

growth and many new hires. Thus, the two concepts were communicated alongside each

other, aiming at decreasing the discrepancy between them (Interviewee 1).

17

Analysis

Analysing internal documents and how organisational members describe the history of the

organisation helps to understand the different ways in which institutional logics are enacted and

negotiated as the organisation grows. From a more concrete viewpoint, there is a relationship

between organisational growth and institutional logics on several dimensions. By analysing the

first ten years of the history of the company through the lens of institutional logics, a startup

logic, negotiations caused by institutional backpacks of new hires and the paradox of the startup

logic were found. These dimensions are discussed in the section below.

The Startup Logic

During the first years, work processes and the organisational structure can best be described

as influenced by a startup logic. The startup logic shaped the values, beliefs and practices of

the actors in the company and can be argued to have emerged through unconscious, self-

repeated behaviour. For example, the individual, autonomous ways of working stemmed from

the early years when there were few people working in the company. After a while, the

behaviours turned into rules about how to behave and shaped the ways people worked.

According to Thornton and Ocasio (1999), this is what characterises an institutional logic.

A startup logic has a certain dynamic rather than being of a specific character. Baron and

Hannan (2002) argue that the founders have ideas, blueprints, about how their company should

be organised, although the elements of the blueprints vary. The case revealed that there were

values and beliefs shaping the original blueprint in the company. This indicates that there was

a startup logic influencing the employees, the structure and blueprint in the early period of the

company. The values, assumptions, beliefs and practices characterising the logic were in many

ways connected to how startups organise. For example a low level of bureaucracy, hierarchy

and holistic responsibility is common in many startups according to Davila et al. (2010).

Therefore, the institutional logic can be seen as a startup logic.

Startup logics are singular, which means that there is no trace of combinations of logics

(hybrids), rather, there is only one logic guiding the company in the startup phase. However, a

startup logic is not the same in every company as the ideas, values and assumptions

characterising it can vary. In the case company, the startup logic is characterised by autonomy

and independence. The startup logic was so strong that it contributed to creating an identity that

both internal members and external actors identified the company with. This is not surprising

as it is in relation to findings by Thornton and Ocasio (2008) who recognised that institutional

identity is an essential constituent of institutional logics. The identity and thus the startup logic

18

contributed to attracting new employees who were curious about the unique way of working,

as it appeared as attracting for many, especially people coming from bureaucratic organisations.

Also, companies like Google and Apple helped create a buzz in the business environment which

increased awareness of the company and its unique processes.

From now on, when referring to the startup logic, it is the company’s specific startup logic that

is referred to. The startup logic is further exemplified in table one, in which the X-axis is based

on research by Thornton et al. (2012) and Haveman and Gualtieri (2017). The table illustrates

the characteristics of the institutional logics present in the company by defining their core

values and how they increase legitimacy in the company, which DiMaggio and Powell (1982)

argued important for organisational survival. For example, the startup logic has its core in

autonomy and independence and gains legitimacy by enhancing innovation in the company. In

addition, the table displays sources of authority which means how the logic gains authority in

the company. For example, the startup logic receives authority by actions taken to enhance

innovation as it is viewed important for further growth and survival. Basis for strategy shows

the characteristics of the logics that are used when setting strategy, for example speed of

innovations and fast growth. Thus, these characteristics will guide the company’s strategic

work. Lastly, the form of organisation is explained which simply outlines how the organisation

looks when guided by the proposed logic. Further note that the bureaucracy logic and the hybrid

will be explained later on.

Institutional

logic Core values

Sources of

Legitimacy

Sources of

authority

Basis for

strategy

Form of

organisation

Startup

Autonomy and

innovation

Growth and

innovation

Innovations

(Innovators,

entrepreneurs)

Innovation,

speed and fast

growth

Autonomous

mini startups

Bureaucracy Standardisation Structure

Hierarchy

(Managers)

Controlled

survival and

expansion

Vertical

Hierarchy

Hybrid

Aligned

Autonomy

Autonomous

ways of

reaching

shared goals Shared goal

Work

autonomously

toward a

shared goal

Autonomous

hierarchy

Table 1. Description of Institutional Logics

In 2018, the company reached a point when the startup logic had a hard time to keep up with

the growth and increased complexity, and did not manage to scale in the same pace as the

company. For example, as a result, the reorganisation was implemented to manage the

19

complexity. As companies grow, organisations become more complex not only in terms of

internal complexity, they are also exposed to a more complex set of external stakeholders and

expectations. As suggested by Davila et al. (2010) and Baron and Hannan (2002) startup

companies often reach a point when their structure is insufficient to take the company further.

As the case shows it was not the strategy that determined the organisational structure, rather the

strong values and beliefs shaped by the startup logic. The startup logic, the notion of autonomy,

had very strong influence on the people in the organisation. It was assumed that it was more

important to stay true to the startup logic rather than changing the structure as the company

grew or according to the expectations of external actors. However, because of the innovation

driven field that the company acts in, the startup logic has helped them gain legitimacy in

society, even though their ways of working were not in line with expectations, made by OLC

researchers, about how organisations of the company’s size and character should be structured.

Thus, the startup logic helped the company gain legitimacy from society which has resulted in

for example increased number of top talents wanting to work in the company.

Negotiations

As the company grew, the startup logic was challenged. New hires came into the company with

a “backpack” of institutional logics originating from previous employers and industries. This is

in line with research by Battilana and Dorado (2010) who found that actors are influenced by

historical logics. When the backpack of institutional logics contradicted the dominant logic in

the company, new hires started to question the startup logic. This behaviour is in line with

research by Gastel and Hillebrand (2011), Gawer and Phillips (2013) and Chang and Huang

(2016), who found that actors often start questioning and negotiating the dominant logic in

order to decide upon a new situation. New hires started promoting alignment and cooperation

between teams as they were used to work according to their old values and beliefs. Because

many came from more hierarchic companies, they introduced a bureaucracy logic to the

company. According to Lawrence and Suddaby (2006), the actions by the new hires can be seen

as institutional work since they were trying to introduce a new logic and disrupt the startup

logic. The new logic that was introduced was similar to the bureaucracy logic as is referred to

by Friedland and Alford (1991) and Baron et al. (2007), it was characterised by structure and

standardisation in work processes as well as hierarchical decision making (see Table 1). Thus

it was to some extent contradictory to the beliefs of the startup logic.

However, the new hires’ negotiations aimed at disrupting the startup logic were difficult for

several reasons. First, in order to change values and beliefs characterising the startup logic, the

organisational identity had to be changed as well. As Fligstein (1997), Thornton and Ocasio

(2008) and Gawer and Phillips (2013) argue, it is through the prism of their identity that actors

make sense of their reality which is why change may encounter resistance from members who

have trouble identifying with the new institutional logic. Second, struggles appeared because

the identity shapes the understanding of who can perform specific practices, which is in line

with arguments from Fligstein (1997) and Gawer and Phillips (2013). Thus, new hires had a

harder time legitimising their practices since they were not fully incorporated in the collective

identity.

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Hybridisation

The years of negotiations between the more bureaucratic logic introduced by new hires and the

company’s startup logic resulted in what Battilana and Dorado (2010) refer to as a hybrid logic,

defined as the logic that appears when different institutional logics are combined in new ways.

The hybrid logic included both the characteristics of the startup logic and the bureaucratic logic,

and was characterised by aligned autonomy.

According to Gawer and Phillips (2013), negotiations of different logics are common in order

to find the optimal solution for the company. In this case, the startup logic can still be argued

to be dominant but with additions from the bureaucratic logic. This is not surprising since a

previous dominant logic will continue to be important when a new one arises (Riaz & Qureshi,

2017; Reay & Hinings, 2005). The hybrid - aligned autonomy - clearly exemplifies this since

it combines the historical identity of the organisation with the new conditions. Using the word

autonomy can be seen as a way to manipulate actors into accepting the new hybridised logic as

it reinforced the institutional identity and thus made the possibility of acceptance higher.

However, the new hybrid logic contributed to added complexity of values and beliefs which

resulted in a visible struggle between proponents of the hybrid logic and those who supported

the startup logic. As Gastel and Hillebrand (2011) suggest, negotiations show how actors are

trying to make sense of the new situation. An example is when the Rhythm, which was

characterised by the hybrid logic because it was trying to add alignment by introducing goals

but still keep autonomy by not adding processes, was introduced. Since actors had been

negotiating around the principles of more alignment for some years, the hybrid started to make

more sense to actors. This can be argued a result of the many years of institutional work aimed

at disrupting the existing institution.

Nonetheless, it was still faced with some resistance by actors trying to maintain the strength of

the startup logic. Again, this is not surprising since actors who identify with a logic tend to

resist efforts to introduce alternative logics, as suggested by Lawrence and Suddaby (2006).

The startup logic had been so strong from the beginning that many actors still acted according

to it even though the hybrid was starting to become more and more accepted in the company.

When talking about the company and its structure, the early employees highlight the importance

of autonomy but also add an argument in favour in favour of alignment. This is evidence of the

strong influence that the startup logic has had on the company during its first ten years.

Thus, one can argue that there is a relationship between organisational growth and institutional

logics. When a company grows it will face new conditions, and as a result, these will relate to

the degree of negotiations made to change the dominant logic. Also, the backpack of

21

institutional logics that new hires bring to an organisation connects the degree of negotiations

with the dominant logic. Thereby, as organisations grow, organisational members enact and

negotiate institutional logics. At the same time, institutional logics may contribute to

organisational growth by influencing the actions and decisions made by actors in the field which

pave the way for further growth.

Discussion

This paper sets out to investigate how institutional logics change as organisations grow.

Analysing internal documents and how organisational members describe the history of the

company helps to understand the different ways in which institutional logics are enacted and

negotiated in a growing organisation. The study contributes to previous studies in several ways.

First, it adds an alternative understanding to organising and organisational growth by using the

lens of institutional logics when investigating a growing organisation. By using this perspective

we see that growth and ways of organising are situation specific, since institutional logics often

are negotiated by actors who try to decide upon the situation. Thus, a certain way of organising

is not connected to a specific phase, size or level of maturity. This adds a new perspective to

organisational growth as it contrasts the assumptions of the OLC, which assumes that

organisations grow by following a biological metaphor. Instead, our findings show that it is

possible for organisational members to influence the way an organisation is organised and its

growth, rather than organisations having a deterministic development. The case shows that,

when new members enter an organisation they carry institutional backpacks which influence

actions of both new and early members. The actions and decisions made by members will

decide the level of legitimacy the organisation gains from society and thus, its growth. For

example, the startup logic supported growth since it legitimised the structure of the company

and thus, the company can be argued to have crossed a legitimacy threshold.

Second, the study also makes a contribution to institutional theory and in particular, research

about institutional logics. A new institutional logic, called the startup logic, was identified in

the company. The startup logic is the type of logic that companies have in their introductory

years, and has not, to our knowledge, been investigated before. The logic is assumed to have

specific dynamics that are dependent on the circumstances and members in an organisation,

whereby it can look different in different organisations. In this particular case, the startup logic

was characterised by autonomy and independence. By identifying the startup logic and noting

that it was present from the first year of the company, it contributes to studies about institutional

logics.

In addition, the case demonstrates how institutional logics change when new hires enter an

organisation by highlighting the impact that institutional backpacks of new hires has. As actors

perceive their reality and make sense of their environment differently depending on what is

inside their institutional backpack, the case demonstrates that negotiations occur when

institutional backpacks differ from the dominant logic in the organisation. When the case

company grew in terms of employees, new hires came in with institutional backpacks that

differed from the startup logic. As a result negotiations increased in the company. The case thus

indicates how institutional logics change as organisations grow. Moreover, the case

22

demonstrates a paradox of the startup logic. The startup paradox arise when the institutional

logic that attracts new employees to an organisation becomes negotiated by the same employees

that it had attracted from the start, with the goal of disruption. In this case, the paradox was

demonstrated when the company attracted many new employees because of their unique startup

logic. Since the company grew in such fast rate they did not have time to incorporate new hires

in the startup logic. This resulted in the new hires still making sense of their reality through

their institutional backpack. When the institutional backpack differed from the startup logic

they started to negotiate with the goal of changing or disrupting the startup logic. Thus, the

startup paradox arose.

One implication of this study is that we have not been able to investigate whether the startup

paradox is present in multiple organisations. Further, as we have been at the company for a

limited time period, we have not been able to investigate the exact content of institutional

backpacks of new hires and if different content might result in different levels of negotiations

which further would have contributed to research on the evolvement of institutional logics. In

addition, the study has contributed to one specific definition of the startup logic, and and as the

startup logic can be tailored to fit different organisations there are possibilities that the

peripheral definition of the logic might expand.

Conclusion

Organisational growth and expansion is an important driver of the economy. However, when

organisations grow they are often faced with new challenges and changes in work processes. It

is therefore important for organisations to understand how growth should be managed. In this

paper we have analysed the history of a fast growing Swedish company through the lens of

institutional logics. The study discovered a startup logic that has influenced the company since

its first year. In addition, the case found that growth is situation specific since it is influenced

by institutional logics. Moreover, the case provides evidence of the implications connected to

growth in number of employees as new hires enter an organisation with an institutional

backpack. When the content in the institutional backpacks differs from the dominant logic,

negotiations occur. Further, the case displays how a startup paradox arises when the logic, that

attracts actors to the company, is disrupted by the same actors it first attracted it first attracted.

Thus, the study shows how institutional logics change as an organisation grows.

This study provides an alternative perspective of organising and organisational growth by

analysing growth through the lens of institutional logics. The findings contrast growth

models that assume that organisations grow in a sequential way and are and are characterised

by certain ways of organising, like for example the OLC. The case highlights the impact that

institutional logics have on organisational growth as institutional logics influence actions and

decisions made by actors in the organisation which pave the way for further growth. Thus, the

study adds to the research about organisational growth by investigating the connection between

growth and institutional logics, which is a limited research field as of today.

23

Furthermore, in order to build theory, more research is needed. Additional research is

recommended to continue to investigate the relation between organisational growth and

institutional logics. For example, by investigating how institutional logics are affected by

institutional backpacks in the longer term. In addition, the startup paradox might arise in other

organisations, which should be further investigated in future studies. Additional research should

investigate whether there are mechanisms or methods that allows growth without the paradox

arising. It would be interesting to investigate whether organisations growing in a slower pace

have less propensity of experiencing the startup paradox since it might be easier to incorporate

new hires into the dominant logic compared to in fast growing organisations. In addition, some

types of startup logics might have an easier time reproducing, for example when a company is

organised in smaller and more separate units, since that simplifies for communication and

strategic work.

Acknowledgements

We would like to thank our two supervisors for helping us throughout this process, without you

this would not have been possible. Ola Bergström at Gothenburg School of Business,

Economics and Law, we are grateful for all your input and ideas, your comments have enabled

us to find the right direction for this study. Our supervisor at the company, thank you for having

us. It has been a truly amazing experience and we are grateful for all your ideas and help during

this time. Lastly, we would like to send our appreciations to all of our interviewees. Thank you

for taking the time to sit down with us to answer our questions and discuss different concepts,

it has been truly amazing to listen to your experiences and in addition it has been crucial for

the development of our research.

24

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Appendix

Appendix I: Interviewees

Number Role Time at the company Date of the interview

1 Strategy & Ops lead 8 months Weekly meetings

2 HRBP 3 years Weekly meetings

5 Product Lead 1,5 years 20/2

4 Agile Coach 7 years 5/2

5 Team Lead 8 years 19/2

6 Engineering Lead 1 year 5/2

7 Product Lead 7 years 22/2

8 Product Lead 6 years 28/2

9 Engineering Lead 1 year 22/2

10 Engineering Lead 2 months 4/4

11 Engineering Lead 2 years 22/2

12 Design Lead 2 years 20/2

13 Product Lead 4,5 years 22/2

14 Engineer 6 years 19/3

15 Engineering Manager 3 years 20/3

16 Engineer 3 years 15/3

17 Delivery Lead 2,5 years 9/3

18 Consultant 9 months 5/4

19 Engineer 2 years 19/3

20 Engineering Manager 1 year 27/3

29

21 Product Manager 6 years 15/3

22 Product Lead 3 years 14/3

23 Agile Coach 6 years 19/2

24 Product Manager 2 months 5/4

25 Program Manager 1,5 years 19/4

26 Designer 4 months 4/5

27 Team Lead 7 years 7/2