Dissertation on "Entrepreneurship and Navigating the Growth Stage"

Dissertation 50 pages (15744 words) Sources: 30

[EXCERPT] . . . .

Entrepreneurship and Navigating the Growth Stage of a Small Enterprise

The research conducted hereafter is on the subject of entrepreneurship. Particularly, it concerns the relationship between the role of the entrepreneur during the growth stage of an organization. The preoccupation of the research is on the various implications of the growth stage and the way that these implications must alter core features of the small firm. The emphasis in the study will be on particular types of firms which tend to possess entrepreneurial characteristics such as Small and Medium Enterprises (SMEs) and Family Businesses. These are largely spoken of in contrast to large corporations, national changes or multinational firms.

The distinction is a central one to the research, which is concerned with the structural, strategic, theoretical and practical imperatives driving the role and responsibilities of the entrepreneur as her company grows from a small organization impacting only a few to a large entity with many stakeholders and interested parties. The literature review, discussion and analysis which make up the main body of this research project will center understanding the imperatives the drive an organization to consider growth, the ways in which growth is strategically approached and how this alters many of the central features of the firms leadership approach, decision-making strategy and even its identity.

In support of the research, we consider a number of key theorists whose work on the subjects of entrepreneurship, growth stage management, organizational learning theory and leadership through change have strengthened the findings below. Of particular value to the research is the work by Mintzberg which divides growth stage management into four dimensions: Financial, Strategic, Structural and Organisational. Additionally, the research by Schumpter helps to identify entrepreneurial growth theory as being distinct from the theoretical constructs governing growth in larger firms. This lends an important idea to the research that most small and entrepreneurial firms will typically be noted for the absence of streamlined processes, poorly defined procedural standards, arbitrary decision-making and a general lack of formality that make them hard to classify according to more general corporate theories on growth.

This becomes a central finding to the research and indicates that the growth stage must be tailored around features specific to the implementing organization. In simultaneity, we find that the entrepreneur must be prepared to substantially redefine the role that she plays as the firm changes in nature. Particularly, the informality noted here above is often a product of decision-making on a strictly hierarchical level. The entrepreneur will often have come by her role and her success by working tirelessly, wearing many hats and having a direct involvement in the day-to-day affairs of the firm. The growth stage represents a transition into a more complex and multiparty network of partners, personnel, management and external stakeholders such as investors. As expansion occurs to this degree, it becomes less appropriate and even strategically damaging to channel decisions, policies and identity through a single individual such as is often the case with SMEs and family firms.

The research conducted hereafter presents this as a primary problem to be addressed throughout the growth stage. The research works to define the growth stage as is specific to SMEs or family firms. Additionally, the literature consulted offers a number of practical recommendations for implementation of the transition toward growth including the identification of key strategic approaches to expansion (such as geographical growth, franchising, branding, et al.) and the identification of key leadership strategies to be used in controlling outcomes, yielding positive personnel responses to organizational changes and to redefining roles amongst leadership.

The resolution of the research is that organizational growth for the small or medium enterprise must be predicated by certain preparations, including the establishment of a management firm through which day-to-day responsibilities can be delegated; the presence of a staff which is prepared to sustain changes with little cultural resistance; a clear understanding on the part of the entrepreneur of her role in a redefined firm; and the development of the formal channels through which growth can be strategically implemented.

Introduction

Taking on the challenges of business development, ownership and growth in the midst of the current global recession is inherently difficult and more than just a little risky. For those who carry forward great ideas, innovative processes, tremendous resource access or simply aggressive leadership, stewarding a company through its first major growth phase, there may be nothing quite so difficult as retaining one's administrative oversight of a business operation while simultaneously seeing to the day-to-day challenges that are attendant to growth. This is the subject at the center of the discussion hereafter, which concerns one of the core dilemmas of entrepreneurship. As we proceed with the literature review and analysis that are to follow, it is with a nod to the understanding that the entrepreneur is likely to bring a distinct personality, energy and vision to her organization. She will likely also have achieved her leadership status by functioning as a tireless worker, as a self-starter, as one who has historically perceived that 'if you want something done right, you must do-it-yourself.' And truly, in the beginning phases of one's business aspirations, these are all qualities of indispensable importance and, when one begins with few real allies, of necessity to survival.

However, as one transitions from these germinating phases to a place of more defined and expansive growth, many of these philosophical approaches must change. The entrepreneur may only succeed by graduating from this 'me against the world' orientation, and by creating, inspiring and influencing an organization around her that can ultimately remove many of the operational burdens that might detract from her entrepreneurial responsibilities. In spite of the simplicity of this premise -- which responds naturally to the idea that a growing entity must naturally place more hands on deck and distribute leadership responsibilities across a more diffuse network of capable individuals -- the process of achieving this growth is a great deal more complex than that.

If done properly, these first stages of development will be organic, natural and inherent; with personnel being added as functions and demand are expanded; with resources and materials being acquired to meet basic production benchmarks; with facilities being occupied to the extent that they are shown to be necessary; with costs and prices reflecting that which the market imposes. This describes the practical and necessary growth of the entrepreneurial venture as it moves from idea to entity. However, as the research hereafter will demonstrate, the true growth stage is not simply distinguished by its place in the business life cycle, though in one regard it is accurate to argue that growth must be the next phase of existence. It is further distinguished by the scope, scale, ambition and conceptual orientation whose identification and definition are established in advance of the phase. Where the initial development of a firm will reflect the necessities affiliated with basic survival, the growth stage will instead reflect; expectations of what the firm could be; how it can practically achieve these expectations, what steps are necessary to alter, shift or improve an operation; and how success of growth phase implementation will be measured. Perhaps most importantly though, this is not a phase that an organization will arrive at arbitrarily. For the entrepreneurial trailblazer, the determination to take an organization to the next level will ultimately be granted by a the existence of a company which firmly enough rooted in operational success to this juncture, which possesses access to the resources and materials necessary to conduct its operation optimally, will have already achieved a certain balance and culture amongst its personnel and will have already constructed a model for management and the distribution of leadership that can accommodate the move toward yet greater opportunity, a more visible brand, a wider market reach or great penetration of existing markets.

The discussion here considers the balance and theoretical grounding which are necessary to facilitate this process of transition and growth, with a particular emphasis on the role played by entrepreneurial leadership. The impetus for this discussion is a view that many individuals will be inherently equipped with the talents, attributes and drive befitting an entrepreneurial leader but that actually sustaining and leading a growing firm is distinguished by many qualities which must be learned, acquired and refined. This is a premise around which much of the following work revolves, denoting that there are myriad theoretical constructs, models of operation, schools of thought, divergence of opinion and paths of practical implementation that the organizational leader should come to understand as growth becomes a major objective.

This idea is strengthened by the primary text from which our research initiates. The reference by Paul Burns (2007), entitled Entrepreneurship and Small Business, will function as a basic source on entrepreneurship in our current business atmosphere, with consideration to the theories and precedents that might better inform the growth stage taken in our hypothetical scenario. To this end, the Burns text recommends itself to our purposes by noting that its pages are intended… READ MORE

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