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Business Growth

Business Growth
Because of the innovative nature of business and the competition breakthrough in the business environment, entrepreneurial ventures have had the remarkable capacity to shift organizations and management's way of thinking. As the business grows, a shift begins to take effect. Owner-entrepreneurs focused on tracking and choosing opportunities, allocating resources, motivating employees, maintaining control, and also encouraging innovating actions that have caused the business to grow, this is no longer the case.
Background
There are several strategies to overcome this paradigm effect. Given in the video and series of videos in the following link:



Objectives:

Many entrepreneurs stay in the micromanagement life trying to remain in full control of tasks, and the company’s operations. Control in a small business is very informal when there are a few employees but when the business grows, the Entrepreneur must move from direct supervision to indirect management. This growth also triggers high turnover because of lack of advancement room for employees. Is the Entrepreneur’s believed that the company cannot afford the services of top-quality personnel? Small companies must realize that it may be a need for training their employees. The Entrepreneur must anticipate what skills are needed to do their jobs and plan for training.

Important points:

Organizational culture and climate, either of a new venture (Timmons, 2006) or on an existing one, are critical in how well the organization will deal with growth.
Culture takes time to be introduced and or changed in a firm. Organizational culture and organizational culture have a significant impact on performance. The climate is created both by the expectations people bring to the organization and the practices and attitudes of key managers (Timmons, Pg. 540).

Organizational climate can be best described along six dimensions:
Clarity - how well organized tasks are made and accomplished.
 Standards - expectations on employees for high standards and performance.
Commitment - extent to which employees feel committed to the goals and
objectives of the organization.
Responsibility - extent to which members feel responsibility for accomplishing
goals without being monitored.
 Recognition - how employees feel they are recognized and rewarded for a job
well done.
 Esprit de corps - extent for which employee feel a sense of cohesion and team
spirit, of working together.

There are certain approaches in achieving entrepreneurial culture and climate:
1)    Leadership - manager who defines and gains agreements.
2)    Consensus Building - define authority and responsibility.
3)    Communication - share of information and willing to alter individual views.
4)    Encouragement - encourage innovation and risk-taking.
5)    Trust - perceived as trustworthy and straightforward.
6)    Development - ability to develop human capital.

Summary:

Rapid Growth Stage issues (Seovine1, 2011):
- Main Issues and Characteristics:
    * Committed to a Growth Strategy.
    * Concerned with adequately financing the growth stage.
    * Need good ownership delegation to improve managerial effectiveness.
    * Enterprise develops complexity. Performance Control Systems are important.
    * Established Expense and Budget Controls to maintain strong Cash Flow.
    * Profitability Planning Systems are critically important.
    * Effective Financial Planning, Forecasting, Modeling, and Strategy.
    * Very skilled, experienced, and competent Management Structure.
    * Company systems are tested, altered, and highly delegated, but there is strong. Strategic

- Leadership from Top Management:
    * Capacity to become a big business.
    * Strong Potential for Business Sale Premium.
    * Effective Delegation and reliance on gifted Managers & Key Employees are keys to
       success.
    * Founding Entrepreneur(s) can opt out of business and have a more advisory role.
 

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