Entrepreneurship and Navigating the Growth

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 to discussion owner-manager and entrepreneurs. Burns (2007) indicates that the text is about that which motivates the actions and decisions of the entrepreneur, including the influence of personal social networks, family and personal background. Moreover, the text reports itself to be about the tasks of management which are associated with the entrepreneurial approach as well as how decisions are make, how risk is balanced and most essentially how there is a clear distinction between the entrepreneur and the manager of a larger firm. Burns reports that for the former, as opposed to the latter, there is a greater need to change one's role and one's approach to responsibilities as the company grows in scale. Burns indicates that his test is centered on how there are distinct traits which define the entrepreneur to the benefit of a company's early stages and, sometimes, to the detriment of a company as it grows. (p. xviii)

And as we find with further research, the text and our general topic are both concerned with how these individual characteristics intercede with one's understanding of that which is required of them during the growth phase. In addition to extensive consideration of the claims made in the text by Burns, the research process will touch on a wide array of sources focused on related organizational issues, theoretical lenses for viewing these issues, and various research-based examples of these theories in actual implementation and/or evaluation. In order to touch on this variance of subjects, the research presented hereafter will center on a literature review derived from full-length texts, scholarly journal articles, case studies, trade magazines and current newspapers or online news sources. The methods employed to conduct this literature review are delineated in the concluding section of our research, which reflects on the process producing the current account.

Subjects touched up by this literature review will run a necessary gamut of topics inherently relevant to today's business atmosphere and to the universal implications of entrepreneurialship. Among these subjects, discussion of Small and Medium Enterprise (SME) orientation will be essential. The role played by SMEs in comprising a free and competitive marketplace is essential. Indeed, as our research denotes, with the support of Burns' (2007) text, small and medium-sized enterprises are the lifeblood of growth, innovation and the realization of those individual aspirations which may ultimately come to command an empire. Burns (2007) tells that his text is primarily concerned with the firm as what he calls the dominant incarnation of business on a global scale. Burns indicates that his text is concerned with the way that the small firm starts up, grows to success or, by contrast, grows toward failure. To this point, he warns that a great many small firms pursuing growth experience economic stagnation. This, Burns indicates, is a problem which calls for greater investigation in light of the contribution of small firms to society. Namely, Burns views the small firm as a hotbed for innovation and the fostering of competitive markets. Therefore, he seeks to define the small firm as something more complex than just a scaled down variation on the larger corporation. In order to approach such a definition, Burns offers a discussion of the unique business quandaries faced by the small business, with special attention to family firms as well. (Bunrs, p. xviii)

Here, Burns helps to direct the gaze of this research toward the entrepreneur as a necessary and evolving figure. The research thereafter helps to contextualize this figure in a landscape of globalization, international outsourcing and persistent worldwide recession. It also helps to attribute to this figure the responsibilities of delegation, of balance and, most importantly, of flexibility as changes become necessary or desirable. The body of research also assesses the structural and strategic implications of change, employing some dominant theoretical frameworks for this purpose. Additionally, the body of research addresses concepts and theories of leadership, managerial principles and scholarly assessment of principles relating to personnel.

It is anticipated at the outset of the research process that consideration of this variance of sources will help to produce a nuanced and well-organized discussion on that which is demanded of the entrepreneur as a company grows from the pet project of one or a few individuals into a complex network of interdependent parts and scores of individuals reliant upon the firm for their own survival. It is thus hypothesized that the primary finding to be yielded here will be that during the process of organizational change and growth, the entrepreneur must also change and grow. The research hereafter will work to identify the ways that the entrepreneur must change and grow to steward an organization successfully through these stages.

Aim/Objectives

The primary aim of this research is to produce a comprehensive resource for consideration by the entrepreneur moving toward a transition from development to growth. This denotes the need for consideration of resources that can better illuminate the subject of growth as a function of the small business enterprise life cycle as well as those which can better illuminate growth from the perspective of the entrepreneur. It is intended that the source here created will provide a valuable collection of interlocking and sometimes oppositional perspectives on how to adapt as a leader as growth-based change proceeds.

Growth

A major priority of the research will be to define organizational growth. Too often, organizational growth is conflated with business development. Therefore, an initial phase of the research will be to create a meaningful and usable definition for business growth that can help the entrepreneur determine whether or not her organization has reached such a stage. Here, growth is seen as an inevitable and necessary phase which is naturally befitting the entrepreneurial spirit, but which also demands adaptation on the part of the entrepreneur. Burns (2007) reports to this end that sometimes businesses which are not designed with intention of growth so much as simply survival may actually find that either success or necessity tend to bring about the unintentional endeavor toward growth. This is where many firms encounter a problem, Burns points out, because the entrepreneurial manager may not necessarily have the natural characteristics of a growth-oriented leaders. This is why growing too fast or at the wrong time can be risky for a small firm, with an absence of proper preparation or managerial strategy frequently leading to unexpected strategic obstacles, possible organizational crises and eventual implementation failure. In these contexts, growth may not only be unsuccessful, but the attempt might be downright destructive to the longterm viability of the small firm. (p. 11)

Here, Burns alludes to many of the problems that will be considered throughout our discussion. To this point, it is a major objective of the research to help catalogue the risks, pitfalls and errors in orientation or judgment that often doom growing companies to over-extension, faulty implementation or even the incorrect decision to attempt to create this growth in the first place. Here, below, we elaborate with greater detail on the intent to identify and, in subsequent sections, to deconstruct the problems or issues that may arise during the process of growth-based change.

Problems/Issues in Growth Stages

One of the most pressing issues imposed upon an organization undergoing some degree of growth-based change is that concerning the relationship between leadership and membership. Often, the strains of change can be difficult to assimilate for both aspects of the organization. However, it is the core responsibility of leadership to ease this transition by opening the airwaves for communication, presenting with clarity information about the form which this change will take and proceeding with a clear plan of action. The further examination of this subject with consideration to the role and responsibility of the entrepreneurial leader and how this will impact personnel will approach a number of literature sources that are intended to provide a framework for this demanding but ultimately manageable process of both growing an organization and reorienting the personnel that allow it to function. This is an issue particular to the growth stage, and is so noted because it requires the entrepreneur involved with the smaller firm to make significant changes in the way that decisions are made and tasks are executed

The need to create a more democratic and more evenly delegated firm is often a major stumbling block for entrepreneurs proceeding toward growth. Often, such personnel must significantly alter the way that they conduct themselves. This is true to the extent that Burns (2007) identifies certain small-business properties that are less befitting the growing organization. Burns (2007) points out that there is a loose but direct connection between small firms and the concept of entrepreneurship. The Burns (2007) text identifies these organizational features as inherently overlapping. Burns further references Storey & Sykes (1996), indicating that their research provides us with the characterization of the small firm as having less formal processes due to the smaller number of organizational members involved in the decision-making process. As a result, the small company can channel greater flexibility and responsiveness to conditions in the marketplace. It is also possible for the smaller firm, Storey & Sykes would argue, to make quick adjustments when crisis or instability strike. This is because smaller companies will have less bureaucratic and faster decision-making processes which call for the input of far fewer parties. As the Burns (2007) text argues, this makes the smaller firm more inherently entrepreneurial in nature, to the extent that firms will be prepared to activate creative solutions in the face of external pressures. (Burns, p. 10-11)

And yet, as the process of growth becomes more imminent, it becomes increasingly clear that leadership must shift its orientation so as to be more accommodating of wider bases of need or interest. As greater numbers of personnel, stakeholders, suppliers, investors, consumers and partners become involved with an organization, it is incumbent upon the effective entrepreneur to move outside of the position of micromanagement or operational oversight that has delivered the company to this juncture. It becomes increasingly more important for the entrepreneur to hear and acknowledge the input and interests of other parties. If development of a startup enterprise has been successful, there will be many more parties with a vested stake in the outcome of growth than had been involved in the original development of the organization.

How to Control Issues

As the discussion above indicates, there is a close connection between the role taken by the entrepreneur and her ability help the company adjust to growth-based changes. Balance here emerges as an important and recurrent them in our research, implying that even as the entrepreneur cedes some level of control over day-to-day operations in order to oversee the growth process on the whole, she must find ways to control those issues of personnel orientation, procedural practicality and others that could otherwise threaten to derail growth. It is for this reason that the research also has the stated objective of illuminating several leadership and change theories that may be used to better understand the parameters, challenges and opportunities which accompany the growth stage.

The focus of the research will also on the theoretical implications of growth management including an exploration of current economic conditions and globalizing trade parameters; a discourse concerning the implications of 'best practice' and 'best fit' change management principles; an examination of such theoretical constructs as Complexity Leadership Theory (Uhl-Bien et al., 2007), Organizational Change and Development Theory (McNamara, 2008) and Strategic Management Change (Teece et al., 1997); and a general discourse or the Human Resource challenges inherent to presiding over this growth-based changes. It is an objective of the research to synthesize these variant theories, discussed in greater detail in the section entitled "Differences Growth strategy / theory / demand" into the single perspective on leadership and growth that will emerge from this present research.

Growth Strategy

It is also essential to understand what is meant by growth strategy as one considers this process as a business imperative. There are certain key features of a growth process which must be defined and which therefore contribute to the expected duration, work delegation and timeline of the intended growth. The text by Meier (2002) is useful as a source for identifying some of these essential features. To this end, Meier (2002) points out that the speed with which you attempt to instigate growth within your firm is called the 'pace,' and that this can be assessed according to the timeline of growth benchmarks that are anticipated by the coordination of growth strategies. Meier (2002) believes that both pace and timing are essential characteristics of the growth process and that control over these can be a major predictor of implementation success. (p. 1)

Here, Meier makes an argument which is fundamental to the research conducted thereafter. Namely, his text refers to several features of growth that are not set in stone but which are to be dictated pragmatically according to the needs or ambitions of the implementing firm. Quite to the point, one of the major aims of this research is to help outline some aspects of growth that must be chosen carefully by the implementing firm. Indeed, every company is different, possesses different needs, has different prospects and must therefore approach growth or any kind of change according to features distinct to the marketplace, the organization and its personnel. Smith (2003) states to this end that there a number of different ways that franchise systems can approach expansion, and that these will often vary according to the speed at which expansion is sought. Smith (2003) contends that sometimes firms will choose to grow at a slower pace with the understanding that such change will be more manageable. By contrast, Smith (2003) indicates, those that pursue growth at a more rapid pace will find frequently require less expense due to the greater efficiency of growth adoption strategies. On this point, Smith (2003) notes that there are benefits and drawbacks to both choices such that leaders must be conscientious to select the pace that is most suited to the capabilities, resources, goals and feasibilities for the company in question. (Smith, p. 1)

Certainly though, these growth strategies only begin to hint at what is actually a broad spectrum of possible approaches to expanding the reach or market presence of a company. It is up to the entrepreneur either to determine the appropriate growth strategy to his or her firm or, if lacking the knowledge to do so indpenedently, to consult the proper resource or personnel -- internal or external -- to make the right growth strategy decisions. On this point, Richards (2010) identifies several different growth strategies which bear consideration. Among them, the text refers to growth based on the opening of multiple locations; by the establishment of new client bases; through methods of franchising; through expansion to online media; a transition in marketing strategies; by finding ways to lower basic operations or production costs; or through the acquisition of new structural or practical appendages. (p. 1) It is a major aim of the research to discuss and evaluate the implication of each of these entrepreneurial growth strategies.

Literature Review, Discussion and Analysis

Growth in Experience

As the research hereafter will demonstrate in ample detail, it is not sufficient for the entrepreneur to simply continue to use the strategies and approaches that were employed to initiate the early development of the company. During the growth stage, the entrepreneur must also grow, particularly in her own understanding of that which is demanded of her. This aspect of the process in largely experiential and demonstrates that the entrepreneur must be in a ready state of evolution concordant to that experienced by the company as a whole. On this point, Schuman (2003) remarks that within the discourse on business and organizational theory, entrepreneurship is now viewed as its own discipline. As a result, Schuman indicates that many entrepreneurs have only become so after proceeding from their own individually chosen disciplines. This is an important feature of our research, which is concerned with the fact that small firms emerge from such a wide variance of starting points that they are both difficult to assess in blanket terms and that they are extremely valuable as a way of stimulating a broad array of high-skill, high-wage jobs. (p. 34)

This means that in many cases, individuals will initiate the process of enterprise development based on an idea, a personality trait or an opportunity. It is only thereafter and in the context of the business itself that many entrepreneurial figures learn that which is truly required to run an enterprise. Therefore, we note that a certain growth of experience will be inherent and required. And with the passage of time, it is expected that growth may only become a possibility when the entrepreneur gains the skill, knowledge, insight and strength of personal relationships needed to grow. Indeed, these aspects of a business will be a product of experience and cannot be replicated simply through education or the premature initiation of the growth stage. To an extent that is readily apparent in many areas of this discussion, the experience which the entrepreneur carries forward will allow for many of the critically necessary adjustments in approach and procedure that are emergent during a growth stage. So reports the article by Gundry & Welsch (2001), which finds that experience is necessary as a way of counteracting the theoretical diffuseness and character variance of the growing firm. In other words, the article reports that it is difficult to provide a singular and overarching set of instructions on how to produce growth for the SME, making individual experience a crucial lens through which to make key growth decisions. As Gundry & Welsch (2001) point out, the media has less and less often overlooked entrepreneurial ventures in favor of discussions on the corporate economy. In spite of receiving this greater attention however, major research theories through which knowledge on organizational growth are channeled remain largely driven by large-scale firm behaviors and needs. On this point, Gundry & Welch (2001) tell that their research has encountered entrepreneurs of variant perspectives on how or even whether growth should be pursued. Their research would therefore be concerned with identifying the factors that either incline or obstruct the desire of organizational leaders to attempt some level of expansion. Here, Gundry & Welch (2001) go on to identify certain distinct factors that can be used to predict this willingness or lack thereof. The argue that the 'strategic origin' of the business, which describes the nature of its beginnings including the external investments and the resources acquisition which prefigured its startup, is a major factor predicting growth. This also the case with such features as the experience of the entrepreneur as well as the ability or willingness of the entrepreneur to move forward with realistic expectations, clearly identified and planned objectives and a keen sense of how to manage crisis, conflict or other challenges as they emerge. (Gundry & Welch, p. 453)

We may consider these factors as highly variable and subject to the differences that likewise distinguish the opportunities of one company from another. Quite to the point, the experience of the entrepreneur will not just be a necessary feature but may well be a driver of the success of growth, perhaps even more so than any uniform set of expectations for what is to be achieved by growth. To this point, Cohoon & Aspray (2007) find that historically, entrepreneurial success has been measure similarly to the way that larger firms have viewed it, according to certain clear economic factors both internally and relative to the larger marketplace. Cohoon & Aspray press the case that instead, the success of a growth stage should be measured based on the preliminary expectations and intentions of the entrepreneur. Indeed, entrepreneurial vision is one of the constants through the growth stage even as so many other features of the organization are altered. (Cohoon & Aspray, p. 2)

This intention will often be a combined product of education and experience, which the source by Trump (2010) insists must be seen as inseparable in the context of entrepreneurial risk-taking. Indeed, Trump argues that to a certain extent, all growth inducement is predicated on a calculated risk. His text goes on to suggest that success in this process will be factored on experience first and foremost. He indicates that in his own ventures, education was often secondary in its importance the experience derived from having actually been through certain business endeavors, whether successful or not. The Trump (2010) source goes on to argue that experience can only be derived from risk-taking, self-starting and on-the-job learning. These are the entrepreneurial features that Trump (2010) argues combine directly with the acquisition of knowledge in order to create the well-heeled and properly oriented organizational leader, during initiation and during growth. (Trump, 1)

This is a valuable point on which to segue into a discussion on the problems naturally encountered during the growth stage. These will demonstrate that the entrepreneur must have gathered the necessary experience to field a host of unexpected conflicts or obstructions to implementation and the success of growth.

Problems with Growth

One of the core challenges in making any empirical conclusions with universal application to the behavior of the entrepreneur is the relatively disparate nature of decision-making across the broad sample of firms that may be regarded as entrepreneurial in nature. As we have noted, the focus is largely on what we have identified as SMEs which, based on their wide variance of scale but general modesty in initial reach, defy any simple theoretical construction. In a certain regard, SMEs are impossible to characterize with any sweeping statement and therefore are also very difficult to fit into a single theoretical or procedural package as may larger corporate structures. Wennekers & Thurik (1999) draw to this conclusion, pointing out that one of the difficulties in fully understanding firms is the continually obscured nature of how decisions are reached and actions are taken across the broad spectrum of firms. Wennekers & Thurik (1999) point out that literally millions of small firms, entrepreneurs and management teams exist that differ in fundamental features such as culture, identity and procedural consistency. Therefore, it is extremely difficult to come to a concrete understanding of just how intertwined the entrepreneurial growth phase is with general economic growth. However, Wennekers & Thurik (1999) make a strong case that the two are inherently codependent. (p. 27)

This alludes to one of the more salient challenges to the efforts here at understanding how growth stages should be handled by the entrepreneur. To an extent that must not be lost on this research, this suggests that any growth stage at this small or medium-sized enterprise must be significantly tailored to specific aspects of the implementing organization. Likewise, we must consider that in light of this inherent variance, many of the theoretical constructs designed to help facilitate growth at all levels of an organization will not be designed with the smaller enterprise in mind. Instead, we have encountered research which warns against attempting to cram the features of a unique smaller enterprise into the theoretical demands suggested by industry standards or the success of large-scale competitors. Deakins & Freel (1998) admonish that one must clearly understand a feature referred to as 'organizational learning theory.' This concerns the degree to which a company's personnel at every level are prepared to adapt to changes, are knowledgeable in the firm's expected norms and are embedded in a structure which helps to facilitate advancement and comfortable assimilation of changing duties. Problematically, though, Deakins & Freel (1998) indicate that the organizational learning theories in circulation are generally intended to apply to larger firms, and do not properly adjust to the wider variables present at the SME. This brings our discussion also to recognition of the work of Schumpter and what Deakins & Freel (1999) call the Schumpterian dynamic. This suggests that approaches to learning and development must be distinct to the cultural and identity-driven features of the specific SME.

In their research, Deakins & Freel (1998) remark upon the need for greater flexibility within the confines of a selected organizational learning approach that may not be suited to a larger and more diffuse firm. The latter, they argue, will demand the ergonomic control of a more streamlined organizational learning approach such that as the corporation's reach grows longer, it maintains firm control over the culture, personnel behaviors, quality control measures and ethical codes that have come to define its brand, image and success. By contrast, the SME will typically find itself in a state of more frequent redefinition. Therefore, ergonomic constancy will be secondary to pragmatism, where the dynamic of growth reflects the establishment of networks and partnerships that seem most likely to help it seize opportunity.

Hite & Hesterly (2001) help to explain this pattern, offering a number of features for what it calls 'firm networks.' This is the tightening association of entities that generally predicates growth for the small or medium enterprise and will, in many ways, predict that organizational learning strategy that is adopted. Hite & Hesterly (2001) indicate that "as firms move into the early growth stage, their networks evolve toward more ties based on a calculation of economic costs and benefits. This shift from identity-based to more calculative networks is manifested in the evolution of the firm networks: (1) from primarily socially embedded ties to a balance of embedded and arm's-length relations; (2) from networks that emphasize cohesion to those that exploit structural holes; and (3) from a more path-dependent to a more intentionally managed network." (Hite & Hesterly, p. 275)

Here, Hite & Hesterly argue that the transition from start-up to growth stage will often begin the process of moving from more informal measures of decision-making and partnership to increasingly formal and more carefully premeditated steps. This especially true in many entrepreneurial contexts which may be identified as family firms of family businesses. Quite often, family businesses will retain many of the defining features of an entrepreneurial business, including the maintenance of a small core of leadership and an informality in its processes. By in large, these distinctions are useful insofar as the research proceeds from the view that the family business will necessarily differ from the non-family business. According to Kellermans & Klein (2008), "family firm research derives its justification from the underlying assumption that this type of organization is subject to influence from the family, which makes it a unique organizational form." (Kellermans & Klein, 1)

Though considerable attention is paid to the opportunities and pitfalls facing entrepreneurial ventures on a smaller scale in today's internationalized economy, there are distinctions which may yet be further applied to such an organization which is set apart by its family orientation. The family business is indeed often regarded by scholarly evaluation as an outlier or an anomaly in most broader discussions concerning business development and maintenance. To this extent, according to Graves & Thomas (2004), "the complexities associated with managing a family business are not addressed by classical management theory." (Graves & Thomas, 7) This is based on a presumption with some validity concerning the likelihood of the family firm to transcend its traditionally limited or local context of operation in the interests of competing on a more diverse and diffuse open global market. Namely, it is generally understood that the family firm is beset by distinct characteristics which differentiate it significantly from those large, multinational firms that tend to excel where the process of growth is concerned. This denotes yet another manner in which the spectrum of differences between SMEs makes the establishment of universal theoretical counsel challenging.

There is a degree of uncertainty that is requisite to this process as the enterprise begins to redefine itself less according to necessity and more according to calculated opportunity, risk or both. This helps to reinforce a major problem with respect to counseling the approach taken by the entrepreneur to the growth of her firm, insofar as the body of theoretical assumptions that are available on the subject of managing the growth stage are neither universally applicable across the wide variance of SME nor are they necessarily even suited to the SME by their design. In either instance, this is not to dismiss offhand available theories on adapting to the growth stage. However, it does insist that we approach any such theories with scrutiny.

Control

By and large, control over growth is a personnel issue. In many ways, this touches on one of the major prompts for this discussion. The concern that an entrepreneur cannot simultaneously be concerned with the preoccupation of 'making a lot of money' while 'running the show' in an operational sense is most directly realized in the area of human resources. The experience of personnel will be a key feature of the growth phase, and indeed, the success with which an SME, whether family or non-family oriented, is able to implement growth may hinge on the cultural acceptance of changes within the firm. This indicates that rather than assuming control over day-to-day aspects of the operation, the entrepreneur should only consider entering into a growth stage at such time as the proper structural mechanisms exist to control the experience of personnel.

To this point, success is significantly informed by an understanding of the important role played by motivation in defining the organization's culture. Ultimately, the focus on motivating individuals by pairing them with suitable internal responsibilities will help to integrate distinct bodies of knowledge into a centrally operant machine. This will in turn ready the organization for the aggressive consistency demanded of all key players during the process of growth. According to a study by Salvato & Chirico (2008), the likelihood of a family business to succeed in growing beyond its immediate borders will be largely contingent upon this aspect of membership refinement. The researchers contend that the ability of family members to integrate knowledge into new and evolving structures, systems and procedures will be a significant determinant on the success of growth implementation. (Salvato & Chirico, 1)

The ability of individuals and the collective to feel comfortable within the context of evolving roles will be tantamount to their commitment and intensity through the process of transition. For the small business especially, a major disadvantage emerges when there appear motivational issues obstructing the participation or efficiency of one or multiple group members. With a small business, these same strengths of individual focus and opportunity can be serious threats to success if the informality of processes allows individual members to opt out, as it were, from the implementation phase. The ability of small numbers of individuals -- and sometimes even a single decision maker or actor -- to directly impact outcomes can be seriously problematic during the precarious periods which are inherent to transformation. (Gallo & Pont, 47)

Worse still, a problem of motivation or morale throughout an organization can represent a truly devastating problem of organizational orientation. A poorly orientated company can give members the feeling of anonymity and might make a member feel that their personal contributions don't really matter. If this is occurring in the small organization, the company is missing out on a serious opportunity. It is in its ability to provide the individual with clear and direct motives for total participation and commitment that the SME has any sort of competitive advantage when compared to the larger corporation. (Silverman, 1)

In order to achieve meaningful control, delegation of responsibility and effective defining of roles in the growth stage will be necessary. An effective and intimate relationship between ownership, management and personnel should be used as a channel through which to prepare the organization for the establishment of meaningful external relationships as the SME grows beyond its own borders.

According to Fernandez-Perez (2003) many firms determine to partner with one another as an alternative to direct growth, with cooperation imposing fewer costs than an actual increase in scale. (Fernandez-Perez, 2) Indeed, in the process of growth it is crucial to promote close cooperation amongst partnered firms in order to integrate the intended deliverables. The effectiveness of the growth stage may be controlled also by working closely with new partners to begin to formalize procedures, policies and a company-wise philosophy which are likely to have previously been lacking. Here, the partnering of new entities within the growth stage will be facilitated by a shared adoption of new company-wide norms.

Creating these types of cultural changes will require an intimate give-and-take between personnel and management. So too is the understanding that this give-and-take will inherently carry some degree of conflict with it. To this point, communication is quite an important instrument in contending with conflict, a subject which the research literature notes is a natural consequence of a dramatic and transformative engagement such as entering into a growth stage. The research findings would argue that when groups engage in cooperative conflict management techniques, they develop efficacy or confidence in the ability to achieve results, which then leads to effective team performance. (Alper et al., 1) Conversely, teams that do not effectively seek to manage conflict, but allow themselves to be obstructed by disagreement or adversity, will ultimately become demoralized and prove unproductive. (Byrne, 1) This is an extremely valuable piece of knowledge for the SME, which may in some regards be more directly susceptible to conflict and division than the larger corporation. The capacity of personal interest to impact the proceedings of a small firm means that there is a distinct possibility that individuals of variant authority may diverge on how best to pursue a growth agenda, or even on the subject of whether or not to pursue such an agenda at all. This means that the company's leadership must approach the process with a core recognition that conflict does not have a necessarily negative connotation in a functional group context but should actually be considered a lubricant to the type of open and receptive communication which drives groups to associate as teams. (Alper et al., 625)

This denotes that control must most necessarily take the form of effective internal management. In preparation for growth, it is incumbent upon the entrepreneur to see that her company is structurally and hierarchically prepared for her withdrawal from day-to-day affairs. Members of the organization with the capacity to be delegated to, and to in turn delegate to personnel, are essential to this step.

Growth Strategy

Understanding that one's enterprise must enter into a growth stage is only a preliminary step. Likewise, ensuring that the appropriate experience, structure and controls are in place are an absolute necessity. However, these are a precursor to the development of an actionable growth strategy. Here, we consider some of the key features which must enter into the construction of such a growth strategy. Typically, the most sensible starting point for creating a meaningful growth strategy is a clear delineation of the defining characteristics of the existing firm. Part of managing the growth process, the source by Enterprise Resource Center (ERC) (2010) indicates, comes with preparation. In order for the growth stage to be initiated correctly, leadership must conduct an assessment of its existing strengths and weaknesses. This will help to determine what aspects of the organization's process are working and how they can be magnified to improve the odds of implementation success for the firm. ERC also indicates that the search for the company's strengths will bring weaknesses to illumination as well. (ERC, 1)

Before proceeding to the execution of a growth strategy, such weaknesses must be identified and addressed. Simultaneously, a company's strengths will be seized and manifested as competitive advantages as the process of growth moves forward. Quite often, a strength such as the possession of a pace-setting innovation, the ability to undercut competitors on costs, the possession of a highly regarded brand name and image or the presence of a well-trained and skilled staff will be the catalysts to growth. Any such strengths should be identified and made as the centerpiece to a growth strategy. For instance, if innovation is the lynchpin of a small firm's success, growth investment might center on the research & development department of a firm. Here, a reputation and track record of innovation within a specific market can be exploited to greater opportunity.

That said, the willingness to address core weaknesses and to eliminate them may be said to be central to developing a useable growth strategy as well. Even certain procedures and practices which have not impeded upon -- or which have even prefigured -- successful establishment of a company, may be proven as weaknesses in the face of growth demands. Thus, a growth strategy must also demonstrate a core flexibility to making key changes. So reports Reinink (2010), who indicates sometimes entrepreneurs may be expertly in their selected area of innovation to a fault. Reinink indicates that sometimes the 'domain expert' may become so enamored of the product or service that they have pioneered that they become resistant to actual needs of the marketplace. This loss of flexibility is a predictor of growth failure and a counterpoint to the advised approach of seeking not to sell a product, but to identify a need and adapt a product to meet this need. (Reinink, 1)

Here, we find that a growth strategy must not necessarily center alone on the ambitions of a company and the processes that have helped a company to achieve these in the early going. As it moves toward a larger marketplace, a firm must instead begin to look outside of itself at the core market 'problems' which it wishes to solve. This focus will constitute a corporate vision that is more important than any one procedural solution or systemic habit. To this point, Mask (2010) argues that the vision guiding the corporation is all-important. During tumult, change, crisis and expansion, this can be a steadying force. Also, through the different phases of managing growth, this can be a point of reference. Mask indicates that where vision is either abandoned or altered to accommodate convenience, failure in growth may be predicted. (Mask, p. 1)

This is a vital statement with respect to defining the growth strategy. A willingness to change and 'roll with the punches' is essential, and so with this process may pervade a fear for both the entrepreneur and for personnel that unfamiliarity will be disruptive to already established success. Indeed, it is this fear that promotes stagnation amongst companies that might otherwise be suited for growth. According to a study conducted by Greiner (2004), the process of dramatic transition may often be inevitable, even as some firms attempt to avoid or delay this out of trepidation. Indeed, it may perhaps be implied in Greiner's (2004) findings that a failure to make the transition where new market conditions such as globalization, recession or opportunity seem to demand such is tantamount to treading water. From the perspective of organizational development, these might be seen as growing pains.

As Greiner phrases it, there are five clear phases of development during the organizational life cycle and that each of these is marked by both calm and crisis. (Greiner, 397) The persistence to remain in calmer territories at the expense of expansion may be perceived as an outright stagnation, which will in time threaten overall survival prospects. Therefore, a growth strategy should be governed by a comprehensive vision as promoted by leadership and as adopted by the personnel who must otherwise sustain the practical implications of dramatic change.

The Growth Stage According to 3 Different Authors

The Growth Stage is the phase in a company life-cycle which sees it move from its comfortable and familiar confines into a larger and more competitive world. The focus of our discussion on the role of entrepreneurship in stewarding the growth stage illuminates the importance of greater role definition, improved delegation of leadership responsibilities and the general formalization of processes. These internal steps will accompany a keen understanding of marketplace realities, industry standards and theoretical models driving success in other contexts. In order to understand the Growth Stage with greater depth, this segment of our discussion will be dedicated to several key authors whose work on SMEs has been crucial to understanding that which is demanded of personnel and leadership during the process in question. Therefore, we consider Mintzberg's Four Dimensions of Growth as a matrix for defining different aspects of the growth stage; we consider Schumpter's work as a mode of defining the growth stage with specificity to SMEs and family firms, as opposed to larger corporations; and we consider Fretwell's definition of the growth stage within the context of globalization, the internationalization of the trade market and all attendant challenges to the survival of the small or medium enterprise.

According to Mintzberg's 1979 text, The Structuring of Organizations, business growth is to be understood according to four distinct dimensions. He identifies these as the Financial, Strategic, Structural and Organisational dimensions. Each of these is in some regard a tributary to the process and decisions relating to growth. Mintzberg identifies the Financial dimension as concerning the relationship between costs, investment, turnover and profits. These indicators drive an understanding of a companies performance and prospects based on monetary performance. As this may be contextualized by the ambition for growth, Mintzberg denotes that the Financial dimension may be viewed as "a measure of the venture's success" and may further be used to characterize "increases in what the business owns." (Rajes, 4) More specifically, the source by Rajes (2010) indicates of the financial dimension of business growth that this is used to evaluate existing assets and to make informed estimates regarding the value of the business.

With respect to the dimension of Strategy, Mintzberg would indicate that the decision to move toward a growth stage and decisions relating to how best to execute a strategy of growth are essential to the success of the intended transition. In Mintzberg's view, growth cannot simply be an expected phase based on a projected timeline, but must be instigated by a number of environmental and internal factors that are likely to facilitate the type of expansion and economic prospects desired. It falls upon the entrepreneur and her established core of leadership to determine that such a stage has been reached before moving toward the growth stage. Mintzberg helps us to hone in on certain features of a company which, when present, imply that growth is a natural step forward. Accordingly, Rajes (2010) tells that strategic growth will be imminent where an SME is in the position to "leverage its resources and capabilities," meaning that it will have achieved a certain security in terms of its access to materials, suppliers, personnel or facilities and that these various attributes may now be parlayed into yet greater organizational gains. (p. 5)

So too does this logic apply to the strategic imperative for a company to "develop its capabilities to exploit an opportunity or opportunities." (Rajes, 5) Where growth it concerned, it is often the case that a company will begin to refine the competitive advantage which it possesses in one regard on another, whether in terms of pricing, product, brand image, innovation or any host of features which distinguishes the firm as it moves forward. This is a strategic dimension of the process that calls for consideration of existing competitive advantages and which in turn determines how best to exploit these so as to expand a company's visibility or presence. This strategy will also be carried out through phases of acquisition, whether this is of physical resources or of more abstract resources such as procedural, ethical or human resource norms. Here, Mintzberg argues that the growth stages will at least be partially defined for a company by the "tangible and intangible assets it acquires to create sustainable competitive advantages." (p. 5)

This is particularly important for the smaller scale organization, which may well have neglected to assess these types of opportunities formally. As a firm seeks new partnerships or works to capitalize on existing relationships, it will be necessary to define some of these features with greater clarity. So is this the case with regard to the Structural Dimension that Mintzberg considers as well. With the process of growth should also come the increasing formality of structural conditions. Roles and responsibilities are to come into clearer focus here, which is often a challenge to smaller firms and family firms in particular. As growth occurs, the practice whereby small organizations feature role-players wearing multiple 'hats' as it were must be altered such that individuals are not spread thin, influences are not derived from isolated leadership sources and that duties are delegated with proper clarity. Mintzberg states of structural growth that this will necessarily call for "changes in the organization of the venture's internal systems." (Rajes, p. 6)

These changes should include this greater refinement in the distribution of "managerial roles and responsibilities," better and more explicit definition of "reporting relationships," the streamlining and standardization of "communication links" and the creation of meaningful "resource control systems." (Rajes, p. 6) In all of these capacities, growth will instigate the need for the practical features of an organization's daily operation to achieve greater consistency in form and function. Leaders, personnel, resources, facilities and partnerships must all be interconnected through a structure that is sensible to the goals defined by a growth stage.

This also means that considerable change must occur at all levels of a firm. As this relates to the question at the center of our discussion, personnel and entrepreneurial leaders alike must adopt a new understanding of their respective roles, attitudes and responsibilities to a change process. Here, Mintzberg refers to an Organizational dimension, which reflects the importance of tailoring certain features of an organization to prepare for the extension of its aims, the expansion of its physical scope and the proliferation of its product or service. Mintzberg indicates that this dimension is two-fold in its particulars, noting the need for "changes in organization's processes, culture and attitudes as it grows and develops" and simultaneously, the need for "changes in entrepreneurs role and leadership style as the venture grows from small to a larger firm." (Rajes, p. 7)

This latter point seems to occupy an important place in our research as it is referred to in multiple literature contexts. Namely, the notion that the entrepreneur must find ways of adjusting her approach to the organization as it moves from the startup phase to a growth stage seems as essential as any in defining the growth stage on the whole. In Mintzberg's model, the final imperative denotes the adjustment in perspective which is required of the visionary historically at the center of a firm. Whether a family firm or simply a small-scale enterprise, it is likely that decisions have been made by an individual or a few individuals, that processes will have been constructed as a matter of necessity rather than optimization, and that the entrepreneur will have taken a day-to-day interest in operational affairs. Many of these qualities must be dismantled in order to allow for the greater formalization of company-wide-features that is necessary to growth.

That said, we must also consider that attempts at defining the 'growth stage' for the SME are ineffective where they do not adjust for this specific notion that process will have moved from informal to more formal approaches. This is the premise at the center of the literature by Schumpter. In addition to Mintzberg, Schumpter is an author whose contributions seem to be recurrent in the literature on entrepreneurship and growth. Indeed, his work is important in contributing the notion that the role played by SMEs is significant in a grander economic scope. This promotes the argument that the growth represented across the many disparate strands that make up the small enterprise marketplace is fundamental to basic economic vitality. On this point, Dejardin (2000) reports that economic growth and entrepreneurship are typically considered as being inherently related. This is a view that brings us back to consideration of Schumpter. Schumpter's works of the early 20th century begin to observe the apparent correlation between economic growth on a larger scale and the increasing number of entrepreneurs in operation. To Schumpter, this made the entrepreneur the heart of economic innovation, with so many different operations of informal nature attempting to approach different combinations to solve existing market problems. (p. 2)

This suggests an important resolution to a recurrent theme in our discussion. In the section concerning the 'problem' of theoretical diffuseness, the research touches on the difficulty of providing a clear and universal theoretical model for growth strategy and the inherently related organizational learning strategy. This difficulty is due to the wide variance and largely unpredictable nature of the informal processes that occur within small enterprises. Often run by small-knit groups, sometimes overseen by a single entrepreneurial figure or identifiable as a family business, these types of organizations will not necessarily approach decisions by the same avenues that govern large and entrenched corporations. But Schumpter's dynamic implies that these uniquely unpredictable variances are exactly the features that make innovation more likely as the SME transitions from startup to a growth stage.

To Schumpter, this does actually promote some understanding of larger patterns, even if these cannot be generalized with respect to implementation. Such activity across a wide spectrum of SMEs is said to be directly connected to the will for innovation at all pitches of the economy. According to Dejardin (2000), Schumpter's work would report on innovation as the force driving profit for the smaller firm. Schumpter would tells that any number of business activities could be used to meet both innovation and profitability, including ways of increasing productivity and reducing business inefficiencies. Because of their flexibility, smaller firms may take risks to prove innovations that larger firms will thereafter adopt. In this way, the smaller firm drives the whole of the economy, states the Schumtperian dynamic. (p. 2)

Here, we can begin to see why Schumpter's name is frequently raised in the discussion on entrepreneurship. Rather than attempting to drive against the practical grain by forcing the spectrum of diverse SMEs to fit into a neat theoretical package as might befit the multinational corporation, Schumpter provides a theoretical construct which allows for the variations distinct to this sector of both national economies and the global marketplace. The global marketplace is a concept which is also due for consideration. Though much of the discussion here throughout has been directed at the strategic implications of growth as precipitated by traditional modes of expansion such as acquisition, franchising or improved cost management, there is yet this more dominant aspect of growth which is impacting the decision-making of many smaller firms. This denotes the value of Fretwell's (2002) more current theories on the growth stage as contextualized by the always internationalizing economy.

Today, Fretwell (2002) indicates, the nature of business as a whole is in a state of flux. Changes in the global economy and the impingement of economic challenges indicate that sometimes widespread changes are necessary within a firm. However, the nature of the changes will vary depending upon the intention and economic outlook of an organization in question. For personnel, this can often come with the foreboding sense that changes will compromise the familiarity of their work, will impede on their productivity and may even threaten the stability of the job. Thus, in order to ensure that the steps taken to ease initiation resonate with personnel, it is important to restructure the organizations communicational methods in order to ensure that those at the administrative level remain perceptive to indicators of morale. Such is to say that management should require "an openness to make a global assessment of subjective information and observations without a formal survey of key elements such as employee job satisfaction." (Fretwell, 3)