No Access

SME GROWTH STRATEGIES: ORGANIC OR NON-ORGANIC?

MIKA PASANEN

Department of Business and Management, University of Kuopio, Finland

https://doi.org/10.1142/S0218495807000174Cited by:28 (Source: Crossref)

Abstract

This paper focuses on factors affecting the growth and performance of small and medium enterprises (SMEs). The aim was to identify strategic factors differentiating two types of growth firms, organic growth SMEs and acquisition growth SMEs. The comparison was based on the empirical data of 20 acquisition growth SMEs and 90 organic growth SMEs, The analysis revealed strategic differences, with important implications, between the two groups. The most noteworthy differences were related to their scale of operation, firm age, founders, and product and customer structures. The results increase our understanding of the factors affecting SME growth and performance in two different contexts of growth strategies. They suggest that firm growth pattern is associated with SME characteristics, and thus has managerial implications.

References

P. Anslinger and T. Copeland, Harvard Business Review 74(1), 126 (1996). Google Scholar
J. Arbaugh and M. Camp, Handbook ofEntrepreneurship, eds. D. Sexton and H. Landström (Blackwell, Oxford, 2000) pp. 308–328. Google Scholar
I. Bamberger, International Small Business Journal 1(4), 25 (1983), DOI: 10.1177/026465608300100402. Crossref, Google Scholar
I. Bamberger, Long Range Planning 22(5), 80 (1989). Crossref, Web of Science, Google Scholar
J. Barber , J. Metcalfe and M. Porteous , Barriers to Growth in Small Firms ( Routledge , London , 1989 ) . Google Scholar
G. Beaver and P. Jennings, International Review of Strategic Management 6, 91 (1995). Google Scholar
D. Birch , A. Haggerty and W. Parsons , Who's Creating Jobs? ( Cognetics, Inc. , USA , 1993 ) . Google Scholar
B. Bird, Academy of Management Review 13(3), 442 (1988), DOI: 10.2307/258091. Crossref, Web of Science, Google Scholar
J. Birkinshaw, Business Horizons 42(3), 33 (1999), DOI: 10.1016/S0007-6813(99)80019-6. Crossref, Google Scholar
S. Birley and S. Stockley, Handbook of Entrepreneurship, eds. D. Sexton and H. Landström (Blackwell, Oxford, 2000) pp. 287–307. Google Scholar
S. Birley and P. Westhead, Strategic Management Journal 11, 535 (1990), DOI: 10.1002/smj.4250110705. Crossref, Web of Science, Google Scholar
S. Bridge , K. O'Neill and S. Cromie , Understanding Enterprise, Entrepreneurship and Small Business ( MacMillan Press , Basingstoke , 1998 ) . Crossref, Google Scholar
C. Brush and P. Vanderwerf, Journal of Business Venturing 7, 157 (1992), DOI: 10.1016/0883-9026(92)90010-O. Crossref, Web of Science, Google Scholar
P. Burns, Small Business and Entrepreneurship, eds. P. Burns and J. Dewhurst (MacMillan, Basingstoke, 1989) pp. 32–67. Google Scholar
N. Carteret al., Strategic Management Journal 15(1), 21 (1994), DOI: 10.1002/smj.4250150103. Crossref, Web of Science, Google Scholar
R. Chaganti, Journal of Small Business Management 25(3), 61 (1987). Web of Science, Google Scholar
S. Chatterjee, Strategic Management Journal 13(4), 267 (1992), DOI: 10.1002/smj.4250130403. Crossref, Web of Science, Google Scholar
E. Chell and J. Haworth, Small Enterprise Development, ed. K. Caley (Chapman, London, 1992) pp. 96–105. Google Scholar
E. Chell , J. Haworth and S. Brearley , The Entrepreneurial Personality: Concepts, Cases and Categories ( Routledge , London , 1991 ) . Google Scholar
N. Churchill and V. Lewis, Harvard Business Review 61(3), 30 (1983). Google Scholar
N. Churchill and V. Lewis, The Entrepreneurial Venture, eds. W. Sahlman and H. Stevenson (Harvard Business School, Boston, MA., 1991) pp. 263–276. Google Scholar
D. Clark, N. Berkeley and N. Steuer, International Small Business Journal 19(3), 72 (2001), DOI: 10.1177/0266242601193005. Crossref, Web of Science, Google Scholar
A. Cooper, Journal of Business Venturing 8(3), 241 (1993), DOI: 10.1016/0883-9026(93)90030-9. Crossref, Web of Science, Google Scholar
P. Davidsson, Journal of Business Venturing 6(6), 405 (1991), DOI: 10.1016/0883-9026(91)90028-C. Crossref, Web of Science, Google Scholar
Davidsson, P. and Delmar, F. (1998). Some Important Observations Concerning Job Creation by Firm Size and Age. Jönköping International Business School, Sweden. Mimeo . Google Scholar
P. Davidsson, L. Lindmark and C. Olofsson, National and Regional perspectives, eds. C. Karlssonet al. (Routledge, London, 1993) pp. 145–174. Google Scholar
P. Davidsson and J. Wiklund, Handbook of Entrepreneurship, eds. D. Sexton and H. Landström (Blackwell, Oxford, 2000) pp. 26–44. Google Scholar
D. Day, The State of The Art of Entrepreneurship, eds. D. Sexton and J. Kasarda (PWS-Kent, Boston, 1992) pp. 117–163. Google Scholar
F. Delmar, Entrepreneurship and SME Research: on its Way to the Next Millennium, eds. R. Donckels and A. Miettinen (Ashgate, Aldershot, 1997) pp. 199–215. Google Scholar
F. Delmar and P. Davidsson, Frontiers of Entrepreneurship Research, eds. P. Reynoldset al. (Babson College, Wellesley, MA, 1998) pp. 399–413. Google Scholar
F. Delmar, P. Davidsson and W. Gartner, Journal of Business Venturing 18, 189 (2003), DOI: 10.1016/S0883-9026(02)00080-0. Crossref, Web of Science, Google Scholar
R. Dodge, S. Fullerton and J. Robbins, Strategic Management Journal 15(2), 121 (1994), DOI: 10.1002/smj.4250150204. Crossref, Web of Science, Google Scholar
Dsouza, D. (1990). Strategy Types and Environmental Correlates of Strategy for Highgrowth Firms: An Exploratory Study. Georgia State University. Dissertation . Google Scholar
D. Duchesneau and W. Gartner, Journal of Business Venturing 5(5), 297 (1990), DOI: 10.1016/0883-9026(90)90007-G. Crossref, Web of Science, Google Scholar
Eggers, J., Leahy, K. and Churchill, N. (1994). Stages of Small Business Growth Revisited: Insights into Growth Path and Leadership/Management Skills in Low- and High-growth Companies. INSEAD. Working Paper 63 . Google Scholar
K. Eisenhardt and C. Schoonhoven, Administrative Science Quarterly 35(3), 504 (1990), DOI: 10.2307/2393315. Crossref, Web of Science, Google Scholar
L. Empson, Business Strategy Review 11(2), 39 (2000), DOI: 10.1111/1467-8616.00136. Crossref, Google Scholar
E. Fisher and R. Reuber, Journal of Small Business Management 41(4), 346 (2003). Crossref, Web of Science, Google Scholar
E. Flamholtz , Managing the Transition from an Entrepreneurship to a Professionally Managed Firm ( Jossey-Bass , San Francisco , 1986 ) . Google Scholar
P. Foley and H. Green (eds.) , Small Business Success ( Chapman , London , 1989 ) . Google Scholar
M. Freel, Journal of Small Business and Enterprise Development 5(1), 19 (1998), DOI: 10.1108/EUM0000000006727. Crossref, Google Scholar
C. Galbraith and D. Schendel, Strategic Management Journal 4(2), 153 (1983), DOI: 10.1002/smj.4250040206. Crossref, Web of Science, Google Scholar
J. Galbraith, Journal of Business Strategy 3(4), 70 (1982). Crossref, Google Scholar
E. Garnsey, A New Theory of the Growth of the Firm, The 41st ICSB World Conference Proceedings IV (1996) pp. 121–143. Google Scholar
A. de Geus, Harvard Business Review 75(2), 51 (1997). Web of Science, Google Scholar
Gibb, A. (1997). Picking Winners? On Gaining Insight into the Processes of Small Firms Growth. Working paper. Durham University Business School . Google Scholar
A. Gibb and L. Davies, International Small Business Journal 9(1), 15 (1990). Crossref, Web of Science, Google Scholar
L. Greiner, Harvard Business Review 50, 37 (1972). Google Scholar
L. Greiner, Harvard Business Review 76(3), 55 (1998). Web of Science, Google Scholar
D. Hambrick, Academy of Management Journal 26, 687 (1983), DOI: 10.2307/255916. Crossref, Web of Science, Google Scholar
M. Hay and K. Kamshad, Business Strategy Review 5(3), 49 (1994), DOI: 10.1111/j.1467-8616.1994.tb00166.x. Crossref, Google Scholar
F. Hoy, P. McDougall and D. Dsouza, The State of The Art of Entrepreneurship, eds. D. Sexton and J. Kasarda (PWS-Kent Publishing, Boston, 1992) pp. 341–357. Google Scholar
Hubbard, G. and Bromiley, P. (1995). Researchers and Top Managers: How Do They Measure Firm Performance? University of Minnesota. Working paper . Google Scholar
P. Jennings and G. Beaver, International Small Business Journal 15(2), 63 (1997), DOI: 10.1177/0266242697152004. Crossref, Web of Science, Google Scholar
B. Johannisson, Small Business Dynamics: International, National and Regional Perspectives, eds. C. Karlssonet al. (Routledge, London, 1993) pp. 117–144. Google Scholar
D. Jones-Evans, International Small Business Journal 14(3), 15 (1996), DOI: 10.1177/0266242696143001. Crossref, Google Scholar
A. Kangasharju, International Small Business Journal 19(1), 28 (2000), DOI: 10.1177/0266242600191002. Crossref, Google Scholar
J. Katzenbach and D. Smith , The Wisdom of Teams: Creating The Highperformance Organisation ( McGraw-Hill , New York , 1993 ) . Google Scholar
N. Kay , Pattern in Corporate Evolution ( Oxford University Press , New York , 1997 ) . Google Scholar
R. Kazanjian, Academy of Management Journal 31(2), 257 (1988), DOI: 10.2307/256548. Crossref, Web of Science, Google Scholar
R. Keeley and J. Roure, Management Science 36(10), 1256 (1990). Crossref, Web of Science, Google Scholar
N. Krueger and A. Carsrud, Entrepreneurship and Regional Development 5, 315 (1993). Crossref, Google Scholar
Laukkanen, M. (1999). Yrittajyyden ja uuden liiketoiminnan jaljilld (In Search of Entrepreneurship and New Ventures: Local Development Strategies in a Global Environment, in Finnish). Kuopio University Occasional Reports E. Social Sciences 8. Kuopio University Press . Google Scholar
I. MacMillan and D. Day, Journal of Business Venturing 2, 29 (1987), DOI: 10.1016/0883-9026(87)90017-6. Crossref, Web of Science, Google Scholar
P. McDougallet al., Strategic Management Journal 15, 537 (1994), DOI: 10.1002/smj.4250150704. Crossref, Web of Science, Google Scholar
P. McDougall and R. Robinson, Strategic Management Journal 11(6), 447 (1990), DOI: 10.1002/smj.4250110604. Crossref, Web of Science, Google Scholar
P. McDougall, R. Robinson and A. DeNisi, Journal of Business Venturing 7(4), 267 (1992), DOI: 10.1016/0883-9026(92)90002-9. Crossref, Web of Science, Google Scholar
R. Miles and C. Snow , Organizational Strategy, Structure, and Process ( McGraw-Hill , New York , 1978 ) . Google Scholar
D. Miller and P. Friesen, Administrative Science Quarterly 25, 269 (1983). Google Scholar
D. Miller and P. Friesen, Organization Studies 4(4), 339 (1983), DOI: 10.1177/017084068300400403. Crossref, Web of Science, Google Scholar
J. Miner, Journal of Business Venturing 5(4), 221 (1990), DOI: 10.1016/0883-9026(90)90018-O. Crossref, Web of Science, Google Scholar
H. Mintzberg, Management Science 24(9), 934 (1978). Crossref, Web of Science, Google Scholar
H. Mintzberg , The Structuring of Organizations ( Prentice-Hall , Englewood Cliffs, NJ. , 1979 ) . Google Scholar
R. Normann , Skapande Företagsledning ( Aldus , Lund , 1976 ) . Google Scholar
D. North, R. Leigh and D. Smallbone, Small enterprise development, ed. K. Caley (Chapman, London, 1992) pp. 12–27. Google Scholar
D. North and D. Smallbone, Employment Generation and Small Business Growth in Different Geographical Environments, The 16th National Small Firms Policy and Research Conference (1993) pp. 17–19. Google Scholar
P. Olson and D. Bokor, Journal of Small Business Management 33(1), 34 (1995). Google Scholar
T. Ostgaard and S. Birley, Entrepreneurship and Regional Development 7(2), 119 (1995). Crossref, Google Scholar
Pasanen, M. (2003a). In Search of Factors Affecting SME Performance: The Case of Eastern Finland. Kuopio University Publications H. Business and Information Technology 1. Kuopio: University of Kuopio . Google Scholar
M. Pasanen, Journal of Small Business and Enterprise Development 10(4), 418 (2003), DOI: 10.1108/14626000310504729. Crossref, Google Scholar
E. Penrose , The Theory of the Growth of the Firm ( Basil Blackwell , Oxford , 1959 ) . Google Scholar
L. Perren, Journal of Small Business and Enterprise Development 6(4), 366 (2000), DOI: 10.1108/EUM0000000006691. Crossref, Google Scholar
C. Perry, International Small Business Journal 5(2), 17 (1987), DOI: 10.1177/026624268600500202. Crossref, Google Scholar
B. Phillips and B. Kirchhoff, Small Business Economics 1(1), 65 (1989), DOI: 10.1007/BF00389917. Crossref, Google Scholar
D. Pistrui, H. Welsch and J. Roberts, Entrepreneurship and SME Research: on its Way to the Next Millennium, eds. R. Donckels and A. Miettinen (Ashgate, Aldershot, 1997) pp. 93–111. Google Scholar
P. Poutziouris, M. Binks and A. Bruce, Journal of Small Business and Enterprise Development 6(2), 139 (1999), DOI: 10.1108/EUM0000000006674. Crossref, Google Scholar
R. Quinn and K. Cameron, Management Science 29, 33 (1983). Crossref, Web of Science, Google Scholar
P. Reynolds, High Performance Entrepreneurship: What Makes it Different?, Babson Entrepreneurship Research Conference (University of Houston, USA, 1993) pp. 24–27. Google Scholar
R. Robinson Jr. and J. Pearce II, Strategic Management Journal 9(1), 43 (1988), DOI: 10.1002/smj.4250090105. Crossref, Web of Science, Google Scholar
W. Sandberg and C. Hofer, Journal of Business Venturing 2, 5 (1987), DOI: 10.1016/0883-9026(87)90016-4. Crossref, Web of Science, Google Scholar
M. Scott and R. Bruce, Long Range Planning 20(3), 45 (1987), DOI: 10.1016/0024-6301(87)90071-9. Crossref, Web of Science, Google Scholar
M. Scott and P. Rosa, International Small Business Journal 14(4), 81 (1996), DOI: 10.1177/0266242696144006. Crossref, Google Scholar
D. Smallbone, D. North and R. Leigh, Small Firms in Urban and Rural Locations, eds. J. Curran and D. Storey (Routledge, London, 1993) pp. 79–131. Google Scholar
K. Smith, T. Mitchell and C. Summer, Academy of Management Journal 28(4), 799 (1985), DOI: 10.2307/256238. Crossref, Web of Science, Google Scholar
O. Spilling , On the Dynamics of Growth Firms: Is A Growth Firm Really a Growth Firm? , The 31st European Small Business Seminar ( 2001 ) . Google Scholar
D. Storey , Understanding the Small Business Sector ( Routledge , London , 1994 ) . Google Scholar
D. Storey et al. , The Performance of Small Firms: Profits, Jobs and Failures ( Croom Helm , London , 1987 ) . Google Scholar
T. Tetenbaum, Organizational Dynamics 28(2), 22 (1999), DOI: 10.1016/S0090-2616(00)80014-5. Crossref, Web of Science, Google Scholar
J. Thompson, Strategic Management, 4th edn. (Thomson Learning, London, 2001). Google Scholar
J. Timmons , New Venture Creation: Entrepreneurship for the 21st Century ( Irwin/McGraw-Hill , Boston, MA. , 1999 ) . Google Scholar
W. Tsai, I. MacMillan and M. Low, Journal of Business Venturing 6, 9 (1991), DOI: 10.1016/0883-9026(91)90003-V. Crossref, Web of Science, Google Scholar
Vaessen, P. and Keeble, D. (1995). Growth-oriented SMEs in Unfavourable Regional Environments. University of Cambridge. Department of Applied Economics. ESRC Centre for Business Research. Working paper 6 . Google Scholar
N. Venkatraman and V. Ramanujam, Academy of Management Review 11(4), 801 (1986), DOI: 10.2307/258398. Crossref, Web of Science, Google Scholar
F. Vermeulen and H. Barkema, Academy of Management Journal 44(3), 457 (2001), DOI: 10.2307/3069364. Crossref, Web of Science, Google Scholar
Vesalainen, J. (1995). The Small Firm as an Adaptive Organization: Organizational Adaptation Versus Environmental Selection within Environmental Change. University of Vaasa. Acta Wasaensia 42. Dissertation . Google Scholar
K. Vesper , New Venture Strategies ( Prentice-Hall , Englewood Cliffs, NJ , 1990 ) . Google Scholar
R. Vinnell and R. Hamilton, Entrepreneurship Theory and Practice 23(4), 5 (1999). Crossref, Google Scholar
L. Weinzimmer, Journal of Small Business Management 35(3), 1 (1997). Google Scholar
L. Weinzimmer, Journal of Business Research 48(1), 35 (2000), DOI: 10.1016/S0148-2963(98)00073-3. Crossref, Web of Science, Google Scholar
L. Weinzimmer, P. Nystrom and S. Freeman, Journal of Management 24(2), 235 (1998), DOI: 10.1016/S0149-2063(99)80061-0. Crossref, Web of Science, Google Scholar
P. Westhead, D. Storey and M. Cowling, Small Firms: Partnerships for growth, eds. F. Chittenden, M. Robertson and I. Marshall (Paul Chapman, London, 1995) pp. 63–99. Google Scholar
Wiklund, J. (1998). Small Firm Growth and Performance: Entrepreneurship and Beyond. Jönköping International Business School. Dissertation . Google Scholar

Vol. 15, No. 04

Metrics

Downloaded 282 times

History

PDF download

System Upgrade on Tue, May 28th, 2024 at 2am (EDT)

SME GROWTH STRATEGIES: ORGANIC OR NON-ORGANIC?

Abstract

Recommended