Although crucial for guiding empirical research, earlier theories of firm growth cannot explain small firm growth phenomenon without inclusion of wide range of determinants of firm growth. In this context, the most widely used framework is based on Storey (1994a) which incorporates includes firm, entrepreneur and environment. Based on Storey’s (1994a) framework and with authors’ extension to account for quality of institutions in TEs we discuss main determinants classified into four groups of factors: firm, human capital, strategy and growth aspiration, and the institutional environment.
Firm Related Factors
Based on GL and JLT discussed in previous section the validity of size-age growth theories has been tested empirically by number of studies,
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Human capital refers to the range of skills, knowledge and experience that facilitate growth. However, very little research has been conducted to measure the influence of human capital on entrepreneurial performance and motivation in TEs (Aidis and Praag, 2007). Haber and Reichel (2007) find that human capital of the entrepreneur especially in the form of managerial skills, were the greatest contributing factor to performance. Other authors point to the role of training as an alternative mechanism to enhancing employees’ and managers’ skills (Kirby, 1990; Cosh, et al., 2000). They find a positive relationship between training and employment growth, especially if the training is embodied in the wider range of management training and human relations practices in the firm (Cosh et al., 2000). Training is expected to be directly associated with growth, in particular if the firm is involved in innovation and competes on the basis of quality rather than simply price (Bryan, 2006). Skilled employees are more productive because they have higher problem-solving abilities, leading to greater efficiency within the firm. To sum up, firms which are strongly motivated to grow, train their workforce to facilitate the growth (Hallier and Butts, 1999). Based on above discussion we state following
Policy makers wield huge influence when it comes to intervention in new firm creation and growth. Policy makers often put into place macro economic policies that seek to overcome attitudinal, resource, operational and strategic barriers to the formation of new firms. (Storey 1994) New firms represent a large portion of the new jobs created each year and therefore politicians are incentivized to make sure new firms are formed. In the past 17 years 63 percent of new jobs have come from small businesses in the United States. (SBA Office of Advocacy 2009) New firms are often closed within 5 years with only a third surviv...
At one time it was thought that after a certain age the brain stops growing but, “scientists have recently shown that adults can grow the parts of their brains that control their abilities, such as the ability to do math or even to juggle” (“You Can Grow”). There is no true plateau as Gawande once believed, new connections coming from the neurons which “allows people to think and solve problems” (“You Can Grow”). can be made even later in life. Good strategy and taking on new challenges that are difficult for the individual is the key (“You Can
Tanner, J.M. and G.R. Taylor, Time-Life Books. Growth, New York: Life Science Life, 1965. p.64.
Tanner, J.M. and G.R. Taylor, Time-Life Books. Growth, New York: Life Science Life, 1965. p.64.
As a developmental psychologist, it is imperative as a professional to provide specific guidelines for the healthy development of infants, children, and adults as they encounter the four main stages of life. These four phases, beginning with pregnancy and birth, leading to infancy and childhood, adolescence, and ending with adulthood, will be discussed in correlation with specific strategies suggested for maintaining a standard rate of growth in an individual as it relates to each particular stage.
There are a lot of factors that determines whether or not a company will be successful. These factors are usually derived from economics. One factor that I plan to focus on is scale economies or better known as economies of scale. Firms that have expanded their scale of operations to obtain economies of mass production have survived and flourished. Whereas smaller firms who have not been able to expand have usually ended up as high-cost producers. The topic discussed will be the Italian automotive industry and how it is affected by economies of scale.
By far the most widely pursued corporate strategies of business firms are those designed to achieve growth in sales, assets, profit, or some combination of these. There are two basic corporate growth strategies: concentration within one product line or industry and diversification into other product and industries. These can be achieved either internally by investing in new product development or externally through mergers acquisitions or strategic alliances.
Khan, M. I. (2012). The Impact of Training and Motivation on Performance of Employees. IBA Business Review, 84-95.
According to Parnell, large and small businesses “slightly outperform medium size companies” due to the smaller companies having flexibility, segment of the market covered and the company provide great customer service. While larger companies have the advantage of economies of scales (2014). The medium companies are kind-of stuck in the middle of their organizational performance growth (Parnell,
Mohammed, J., Bhatti, M., Jariko, G., & Zehri, A. (2013). Importance of Human Resource Investment for Organizations and Economy: A Critical Analysis. Journal Of Managerial Sciences, 7(1), 127-133.
The Effect of the Development of Large Firms on Society Many firms choose to expand in size because of the cost and market share benefits the firms can reap. However, the development of large firms may not always be of benefit to consumers, and the advantages and disadvantages will be discussed in the following essay. Because larger firms such as Shell Petrol Station are able to experience internal economies of scale through lower unit costs, many of the cost savings are then passed on to the consumers through lower prices. Hence consumers are then able to enjoy greater consumer surplus, defined as the difference between the maximum price that a buyer is willing to pay for a good or service and the actual price paid. As seen from the diagram below, the marginal cost curve shifts to the right such that the new marginal cost = marginal revenue equilibrium lowers the price and increases the output level compared with the initial equilibrium.
Growth strategy is the organisation formulating their plan to accomplish their objectives and goals to grow in revenue and size of the business. However according to (Bridge, O’Neill and Cromie 2003), she defines growth strategy as a “...the movement of the business into bigger premises, taking on more staff, significant increases of turnover, taking on a new product line or lines, buying another business, and so on” Growth Strategies are important for businesses as they allow the business to move in a formal direction. Businesses can easily be affected by the smallest of changes for example new customers or the arrival of new competitors which could have a negative impact, so planning is very important and takes care of additional effort and resource for faster growth. With these growth strategies, organisations try to achieve numerous things for example, obtaining economies of scale, attaining market leadership and retaining talented staff.
Growth in the small and medium business in Canada and other developed countries has been very significant. This sector of the business community now represents about 40 percent of GDP and accounts more than half of total employment. Today small businesses are more diverse and more vigorous than ever, but they also faces newer and more challenges or inhibitors to their growth than their older conter parts. This research will attempt to find the answer to the following hypothetical question:
In the first stage of growth, the founders of an organization develop skills and create new products. Learning is a huge component of this phase of organizational growth. Entrepreneurs learn what works and what doesn’t. People’s behaviors are governed by organizational culture rather than by hierarchy (Jones, 2010).
One of the causes that influences an organization’s human resource is its strategy. A strategy refers to a plan that in place to guide business operations and activities. The business strategy then provides schedules and activities for the employee, and as a result affects the human resource. The scope is to build on qualifications and capabilities, therefore influences human resource to higher capacity while the unsuitable distribution of tasks may dampen human resource to poor results. Managers in the organization play a significant role in influencing human resource. The type of leadership structure and leadership style implemented by the organization establishes the level of encouragement that a leader and their leadership have on human resource. An ineffective leadership will fail to mobilize human resource into performing required tasks due to poor control of employees. Effective leadership influences human resource management responses to the management’s needs towards competitiveness. Ammi, F. T., & Mushatt, S.