A model of full-time professional graduate student satisfaction is developed and tested using data from in-depth focus groups of full-time MBA students that identified facets of program satisfaction. These fell into six categories—three categories involving program design and delivery and three categories of program outcomes. The model was validated by an independent group of full-time MBA students and a measurement instrument was developed. This instrument was administered to other full-time MBA students and their data analyzed via structural equations modeling. This analysis further refined the model and estimated the path coefficients among the items and linked them to overall satisfaction, perceived value of the program, and commitment to it. We propose that this model can be adapted and generalized to other professional graduate programs.

Risk in financial institutions is vitally important to regulators, policy makers, investors, and the stability of the financial system, yet some critical aspects of that risk remain poorly understood. In the case of U.S. startup banks, a critical choice that can influence risk-taking behavior is which of three regulators—with varying levels of stringency—to choose. The board of directors of the new bank makes this important decision, which may result in different risk implications, depending on board’s structure. Here, we examine banks’ risk behavior associated with the degree of board independence and the choice of regulator. We find that the regulatory environment and board independence jointly influence new bank risk. Our evidence suggests that the intensity of regulatory scrutiny is a partial substitute for board independence in achieving an optimal level of risk. We discuss the implications of our findings for theory and policy.

Public policy regulations, designed to legitimate and protect fragile, fledgling new firms from failure, on the surface, appear to be of great value. According to Stinchcombe, to the extent that such policies serve as "standard social routines," they may even work to decrease the liability of newness. Using a sample of more than 2,600 new banks chartered in the United States over a 15-year span under the supervision of three different regulatory agencies, we find that failure rates vary according to nuances in the differences in regulations levied by these agencies. Paradoxically, banks that are initially subject to more stringent regulations, intended to limit their strategic choices to a set of "safe and sound" practices, and protect them from failure during their early stages of existence, in fact, have a higher likelihood of failure after those restrictive regulations are lifted. Our results suggest that public policy attempts to thwart the liability of newness are in fact a "fix that fails," as public policy regulations designed to reduce the liability of newness merely delay the inevitable.

PurposeThe purpose of this paper is to examine the antecedents and performance outcomes when startup firms in the US banking industry hire industry consultants.Design/methodology/approachThis study uses a sample of prospective startup banks that applied for a new bank charter application in Florida between 1996 and 2005. Logistic regression, ordinary least squares or ordered logistic regression models were used to test hypotheses.FindingsAnalysis suggests complexity and regulatory change are factors in a founder’s decision to hire a consultant. Consultants have a positive impact on firm financial performance but not on a composite multifactor measure of performance. Additional analyses suggest the effectiveness of consulting assistance hinges on specific attributes of the consulting firm, but cumulative consulting experience is not one of these attributes.Research limitations/implicationsThis study focuses on the impact of consultants on new venture performance in a single industry using archival data. Additional research is likely needed to test the generalizability of the findings in other research contexts and examine motives beyond the financial ones investigated in this study.Practical implicationsResults suggest that hiring a consultant at startup can satisfy financial stakeholders, but, in a regulated industry, hiring a consultant at startup does not improve a composite, multifactor measure of performance that is important to industry regulators. When deciding whether to commit scarce resources to hiring consultants, founding teams should be clear which external stakeholder and which measure of performance they are seeking to improve.Originality/valueWhile the business advisory role of informal players such as family and friends and more formal players such as board members and federal, state or local governments have been well documented, little attention has been paid to the contributions of industry consultants in startup firms. These overlooked intermediaries play an important role in the successful launch of a new firm. This study examines when and why such advisors might create value for new firms.

Research summary: Pre-entry industry experience is a central construct in the founding team literature. Research on prior shared experience (PSE) emphasizes that founding teams face challenges integrating and acting on independent experiences, so PSE should be beneficial for new venture performance. Existing studies, however, typically study PSE in blunt terms, expecting that more is better. Instrumental variable analyses of a unique sample of 344 commercial banks founded in four U.S. states between 1996 and 2006 showed that industry-specific PSE may be more or less beneficial, depending on several founding team characteristics. Our findings provide nuance and caution to the narrative that PSE is always beneficial. Under some circumstances, firms with founding team PSE may be no better off than those without founding team PSE, suggesting more research is necessary to understand when and why founding team experience matters to new firms. Managerial summary: Pre-entry experience of founding teams affects new firm performance, but is hard for founders to leverage separately gained experience. Knowledge moves more readily if sets of managers leave together to start a new firm. But, it may be simplistic to conclude that prior shared experience (PSE) is always good, or better than the sum of independent experiences. In a set of banks founded in four U.S. states between 1996 and 2006, we find that PSE is not necessarily a direct pathway to better bank performance. Characteristics of the PSE, such as the part of industry the former and new banks operate in, can lower its benefit. We also found that the benefits of PSE erode as the entire founding team develops shared history after startup. Our findings have implications for entrepreneurs, investors, and policy-makers. Copyright © 2015 John Wiley & Sons, Ltd.

In the United States, newly chartered banks are subject to increased regulatory scrutiny during their early years of operation to ensure their long-term viability. As the record number of bank failures in 2009 has shown, this additional regulation does not guarantee success. To better understand the internal factors in this environment that result in organizational distress, an antecedent failure state, the authors focus on the group-level characteristics of the banks’ founding teams, specifically ownership concentration and four explicit types of founding experience. Using a sample of 129 banks based in Florida, they find that increased ownership concentration, prior industry experience, heterogeneous occupational experience and joint prior founding experience and prior shared experience decreases organizational distress. Their results provide direction on characteristics that may help firms avoid organizational distress.

PurposeThe purpose of this paper is to identify the characteristics of an entrepreneurial team that influence the likelihood a new venture will successfully launch.Design/methodology/approachThis paper uses a sample of prospective start‐up banks that applied for a charter application in Florida between 1996 and 2005. Logistic regression was used to test the hypotheses.FindingsAnalysis suggests that entrepreneurial teams where: the CEO is strongly embedded into the team; no team member holds 10 per cent or more of the firm's total equity; team members have less rather than more industry experience; and more team members have prior founding experience, all point to a successful new venture launch.Research limitations/implicationsThis study focuses on start‐up success in a single industry and thus may not be generalizable to other research contexts.Practical implicationsResults suggest that bank regulators in charge approving new bank charters would be well advised to revisit their guidelines and recommendations for prospective new bank founders.Originality/valueGiven the unique regulatory requirements of the US banking industry, the successful as well as failed efforts to launch a new bank can be identified and the “success bias” present in many entrepreneurship studies can be averted.

Forecasting is an inherently difficult process. This task is especially complicated in the context of new ventures where the typical firm has no operating history on which to draw and the firm’s founders may have limited experience working together collectively as group. In this study, we argue that improving forecasting outcomes in new ventures may depend on the firm’s access to different types and sources of knowledge. We investigate these arguments in the context of new ventures in the U.S. banking industry and find that both inside knowledge, embedded in founding team experience, and outside knowledge, generated by external consultants, improve forecasting accuracy.

The article looks at the consequences of hiring consultants during a firm's startup process. New firms within the U.S. banking industry are focused on to prevent previous managerial decisions and organizational performances from influencing the research. Institutional theorists maintain that organizations seek legitimacy to help manage uncertainty in their environment. Bank founders may inhibit their firm's financial performance by employing consultants, who can prove to be an obstacle to developing a unique strategy for the firm.

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