You Can Code the Software, but Can You Code the Start-up? A Case Study of Employee Perception Toward Formalization in High-Tech Start-ups

Sammanfattning: This thesis aims to explore how employee perception could be utilized as a resource in determining the need for increased formalization in the field of high-tech start-ups. The thesis is based on a qualitative case study of a representative company in the software industry. The primary data consists of semi-structured interviews with 12 subjects spread across three existing functions within the company. Psychological Contract Theory is used to form an understanding of the employees' experience and expectations of their work, laying the groundwork for further analyzing their perceptions of a planned increase in formalization within the organization. Employee Readiness for Change Theory is then used as a way of measuring this perception in the form of change readiness, analyzing how welcoming the employees are toward the structural changes. The study demonstrates the presence of several factors indicating a high change readiness among the employees: discrepancy, appropriateness, efficacy, principal support and valence. Of particular note is the study's finding that this change readiness strongly varies within the organization depending on the psychological contracts of the employees in question. It is also found that employees' change readiness toward formalization correlates with the reasonings of management. This thesis aims to further the theoretical understanding of employee perceptions of formalization within the realm of high-tech start-ups, as well as provide managers and change agents the means of more readily determining the optimal timing and scope of implementing structural changes such as increases in formalization within the organization.