Entrepreneurial Organizations and the Use of Strategic Silence
In recent years organization scholars have emphasized the ways in which organizations secure resources and establish their external reputation (Loonam, Eaves, Kumar, & Parry, 2018). For instance, in an effort to build a favorable reputation, organizations strategize to implement press releases, websites, various advertisements and marketing campaigns (Castelló, Etter, & Årup Nielsen, 2016). Yet the external communication strategy of organizations is far from a straightforward process, especially for new entrants such as entrepreneurial organizations. While external communication focuses on what to communicate to stakeholders (Li, Sikora, Shaw, & Tan, 2006), external communication strategy may also involve a decision to restrict external communication or not communicate at all (Sellers, 2009). Relatively little is known about drivers that lead organizations to strategically reduce external communication outside of periods of crisis (Coombs, 2015; Reilly & Larya, 2018). More specifically, there is limited information about whether the degree of external communication is associated with certain organizational stages – particularly during early entrepreneurial periods.
Thus, the central goal of this article is to develop the concept of strategic silence as a component of external communication strategy in entrepreneurial organizations. This article situates strategic silence in the dynamic capabilities framework to answer the questions about why entrepreneurial organizations are adopting strategic silence and when it will lead to favorable performance outcomes. Entrepreneurial organizations often engage in periods of silence; for instance, in “stealth mode” entrepreneurs restrict external information from stakeholders to avoid garnering unwanted attention (stealth mode is an industry term used to refer to a period when an early-stage organization has formed but has not publicly discussed its core products). Indeed, an increasing number of entrepreneurial organizations use “Stealth Mode Startup Company” as their company name on various job platforms such as Glassdoor and Indeed.com to hide their identity while still attracting job applicants. Organizations at this stage face conflicting strategic goals, attempting to gain access to resources while also limiting external attention.
Herein, this study focuses on strategic silence in order to better understand the impact of the absence of communication on product success as an entrepreneurial organization emerges from its formative period of development. Data were collected from 54 mobile news app organizations, examining their communication patterns before and after product launch and their relationship to market attention and product performance. This study has scholarly and practical implications regarding variance in communication strategies for entrepreneurial organizations and other new market entrants. Findings promote understanding of silence in early organizational formation.