Business Growth Models

Structural Growth Model

The relationship between entrepreneurial structure or attitudes and firm growth is important for at least three reasons. First, it is widely believed that the entrepreneurs of a firm place a lasting stamp on their companies that influences the cultures and behaviors of their firms (Mullins, 1996). Second, investors and others often assess the potential of a new venture by evaluating the attributes of its entrepreneurs. One of the most important criterions used by venture capitalists, for example, in deciding whether to fund a firm is their perception of the entrepreneur's or the entrepreneurial team's ability to successfully launch the venture. Third, launching a new firm is a challenging process. As a result, individual difference variables, such as educational attainment and prior industry experience, have in many instances been found to be critical in successfully launching a new firm (Barringer et al., 2005).

Strategic Growth Model

Entrepreneurial strategy is an important factor for difference between rapid-growth firms and lower-growth firms (Wiklund, 1998). First, SME strategy is different from the strategy taken by large firms. Entrepreneurial strategy may affect all business activities in the progress of firm growth. Second, after a firm gets established and starts growing, the smaller firms usually are under bigger influence from entrepreneurs. And larger firms are in need of more professional management. Entrepreneurial strategy functions all the time. Hence, it is important for entrepreneurship researchers to recognize the importance of entrepreneurial dimensions of strategy in addition to individual level entrepreneurship (Miller, 1983). Wiklund (1998) suggests that entrepreneurial dimensions of a firm's strategy are seen as a combination of risk-taking, proclivity, and innovativeness.

Financial and Human Growth Model

Financial and human resources are basic inputs in the production process, whereas capabilities refer to the capacity for coordinating resources to perform certain tasks or activities. However, it is difficult from a measurement perspective to separate financial resource availability from the capacity to utilize these resources (Chandler and Hanks, 1993). The resource typology used in business growth is the one outlined above: fianacial capability, present size, number of employees that hold university degree, involvement of employees in decision making, present size (sales), formal professional cooperation, day-to-day advisors cooperation, decision making, and creating unique value for customers, product superiority, innovation (Barringer et al., 2005).

Organizational Growth Model

Wiklund suggests that task organizational characteristics in terms of dynamism, hostility and heterogeneity have been argued to be critical for suitable strategic choices, i.e. particular strategies are likely to lead to better performance depending on the level of organizational dynamism, hostility and heterogeneity. These dimensions are frequently used in small business growth and performance literature (Brown and Eisenhardt, 1996). Furthermore, Zahra (1991) suggests that each of these three dimensions should influence entrepreneurship orientation (EO), i.e. depending on the degree of organizational dynamism, hostility and heterogeneity; firms with a higher or lower degree of EO may perform better or worse.

Reference

Barringer, B.R., Jones, F.F., Neubaum, D.O. (2005), "A quantitative content analysis of the characteristics of rapid-growth firms and their founders", Journal of Business Venturing, Vol. 20 No.5, pp.663-87.

Brown, S.L., Eisenhardt, K.M. (1996), Competing on the Edge: Strategy as Structured Chaos, Harvard Business School Press, Boston, MA, .

Hambrick, D.C., Crozier, L.M. (1985), "Stumblers and stars in management of rapid growth", Journal of Business Venturing, Vol. 2 No.1, pp.29-39.

McClelland, D. 2005. Need Achievement and Entrepreneurship, A longitudinal study. Journal of Personality and Social Psychology, 1, 389 - 392

Mead, C. 2006. The Contribution of Small Enterprises to Household and National Income in Kenya, Economic Development and Cultural Change Development” Academy of Management Proceedings, pp 373 - 377

Miller, D. (1983), "The correlates of entrepreneurship in three types of firms", Management Science, Vol. 29 No.7, pp.770-91.

Mitchell, D.W., Bruckner Coles, C. (2004), "Business model innovation breakthrough moves", Journal of Business Strategy, Vol. 25 No.1, pp.16-26.

Mullins, J.W. (1996), "Early growth decisions of entrepreneurs: the influence of competency and prior performance under changing market conditions", Journal of Business Venturing, Vol. 11 No.2, pp.89-105.

Reid, G. 2006.  Small Business Enterprise. An Economic Analysis.

Sabatine, F. J. 2002.  The Entrepreneurial Decision.  Muncie, IN: “The Midwest Entrepreneurial Education Centre, College of  Business, Ball State University,

Siegel, R., Siegel, E., MacMillan, I.C. (1993), "Characteristics distinguishing high-growth

Stimpson, D.V., Huefiner, J.C., Hunt, H.K. 2000.  An Attitude Approach to the Prediction of Entrepreneurship, Entrepreneurship Theory and Practice, 15(4), 13 - 31.

Wiklund, J. (1998), “Small firm growth and performance”, unpublished doctoral dissertation, Jonkoping International Business School, Jonkoping, .

Yuli Zhang (2001), Management Obstacle to the Growth of SMEs, Tiajin University Press, Tiajin, (in Chinese), .

Zahra (1991), "Predictors and financial outcomes of corporate entrepreneurship: an explorative study", Journal of Business Venturing, Vol. 2 No.6, pp.259-85.

Zook, C., Allen, J. (1999), The Facts about Growth, Bain and Company, New York, NY, pp.45. 

STRATEGIES ADOPTED BY MID LEVEL COLLEGES TO COPE WITH GLOBALIZATION

The challenges in the business environment calls for organizations to develop a roadmap in order to steer in the right direction amid the environmental turbulence and challenges of globalization. This makes it necessary for an organization to device an appropriate strategy to enable it create a “fit”. The business environment is becoming increasingly competitive and hence there is the need to ensure that they put in place mechanisms to enable them compete not only at the national level but also at the international level. Globalization involves the diffusion of ideas, practices and technologies. It is something more than internationalization and universalization. Giddens (1990), described globalization as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa. This involves a change in the way we understand geography and experience localness, as well as offering opportunity it brings with considerable risks linked, for example, to technological change.

Globalization effects are spreading all over the world with increased speed and organizations must align themselves accordingly or be faced out of business. Small and Medium Enterprises are not an exception in this and they will have to adopt new ways of doing things in order to remain relevant and competitive (Ansoff and McDonnell, 1990). This brings about the relevance of development of a game plan of action to enable them move to the next level.

Globalization of competition really starts to get hold when one or more ambitious companies precipitate a value for worldwide market leadership by launching initiatives to expand into more and more country markets. Globalization can also be precipitated by the blossoming of consumer demand, where national organizations find themselves competing with international organizations at the national level. The forces of globalization are sometimes such a strong driver that companies find it highly advantageous, if not necessary, to spread their operating reach into more and more country markets (Osterhammel and Niels, 2005). Globalization is very much a driver of industry change in such as the educational sector through the various academic programs offered. Various educational institutions have developed various strategies to take the huge opportunities that are opening up as a result of globalization. Some of the strategies include development of partnerships, offering of international programs through collaborations, expansion to new markets and broadening of the academic programs.

The education sector has been growing rapidly with the increase of mid level colleges and institutions of higher learning. There has been increased competition both locally and internationally. Most of the colleges fall under the category of small and medium enterprises and the level of competition mainly stems from larger institutions. In order to remain competitive, the mid level colleges have developed strategies that enable them to remain relevant, offer competitive programs and at the same time offer high quality education. Some of the activities they have engaged in are development of academic programs that are unique and also having them validated and recognized by the government. Other activities include development of programs in collaboration with the universities and international institutions. However, it has been an uphill task for most of them since they have been operating in a local level or national level, and as a result of globalization, they have suddenly found themselves experiencing regional and international competition in their operating levels.

The mid level colleges that have been applying various strategies in order to cope with the challenges brought about by globalization. However, the strategies developed have not proven as best practices in the operations. Previous studies carried out in the small and medium enterprise sector by Omondi (2009), Maina, (2009), Ngui (2007) and Awino (2007) were on the areas of performance, development of strategies, relationship management and strategic responses but none has looked at the strategies they have adopted to contend with globalization in the higher education Sector.