Administrative Issues Journal


The purpose of this paper is to present a case study focusing on a new technology start-up firm, founded by two graduate students, an engineer and a business major, who met during their university studies. The case is timely, in that only ten percent of new product introductions result in a profitable business. The causes of failure are numerous and include the following: the market may create failure; inadequate funding and capitalization; and competition from established enterprises. Several research studies also point to rising indications of interfunctional conflict in high technology companies. One reason may be that, today, management teams in such companies are typically comprised of greater levels of diversity in age, gender, ethnicity, education, and life experiences, all of which exacerbate conflicts. New venture teams, especially in a technology start-up, may be united because of the product innovation, but they may easily become disconnected and unrealistic when it comes to the management of the enterprise. The presentation and analysis of a conflict management process herein indicates that the way a start-up team manages its conflicts may have a permanent affect on the success of its entrepreneurial venture. Conflict management does not imply terminating conflict, but involves understanding strategies to minimize dysfunction and enhancing constructive effectiveness as a result of conflict. This case exposed the problems that arise due to the differences in the founders’ education, background, experience and understanding of the necessary entrepreneurial mindset for success. By using a model of conflict management that encompasses four negotiation skill sets, including assessment, intervention, resolution and maintenance, their conflicts were resolved quickly and their partnership re-engineered, increasing the chance of their firm’s long-term success.