1. DIMENSIONS OF BUSINESS GROWTH
Potential for growth (Distinguishes between small business and entrepreneurial venture)
Growth  Internal development and change
 Interaction with environment
GROWTH
Innovation
Strategy

2. DIMENSIONS OF BUSINESS GROWTH
Organisational growth is multi-faceted, four perspectives:
Financial
Strategic
Structural
Organisational
Henry Mintzberg (1979), The Structuring of Organisations.

3. Four Perspectives 1. Financial A commercial entity requires:
Costs + Investments
=Turnover
= Profits

4. Four Perspectives 1. Financial (continued)
A measure of the venture’s success:
Increases in what the business owns 
a. Assets
b. Value of the business

5. Four Perspectives 2. Strategic growth The way in which the business
Leverages its resources and capabilities.
Develops its capabilities to exploit an opportunity or opportunities.
Tangible and intangible assets it acquires to create sustainable competitive advantages.

6. Four Perspectives 3. Structural growth
Changes in the organisation of the venture’s internal systems:
Managerial roles and responsibilities
Reporting relationships
Communication links
Resource control systems

7. Four Perspectives 4. Organisational growth
Changes in organisation’s processes, culture and attitudes as it grows and develops
Changes in entrepreneurs role and leadership style as the venture grows from small to a large firm

9. for the entrepreneurial venture
Four Perspectives
The dynamics of growth
for the entrepreneurial venture
Financial growth
Resources
Performance
Strategic growth
Asset accumulation
Direction
Organisational
growth
Structural growth
Use of
assets

10. Financial Analysis of Growth
Investors and business communicate in a number of ways:
A model of financial appraisal for the entrepreneurial venture
Financial reports
Balance sheet
Profit and loss accounts
Supplementary information
Growth
Income/Assets/Capital
Trends
over time
Estimation of risks and return
Indicator ratios
Performance
Financial status
Stock market
Benchmarking
Expectations
Industry norms

11. Strategic growth Growth and cost advantage Lower cost Experience Lower
Curve cost
reduction
Lower
price
Increase
in demand
Increase
in output

12. Structural growth
As the venture grows, structural growth is both a response to the circumstances in which the organisation finds itself and a reaction to the opportunities with which it is presented.

13. Structural growth CONTINGENCY Theory
This theory regards the structure of an organisation as dependent on five ‘contingencies’ or types of factors
Organisation’s size
Operational technology it uses to create value
The strategy it adopts
The environment it is in
The way power is utilised within it

14. Organisational Growth The resource requirement approach
The entrepreneurial venture requires
Information (to develop an innovation)
Capital (money) for investment and
People to make the venture happen

15. Organisational Growth The resource acquisition approach
Stage 1: Entrepreneur attracts all resources
Resources

16. Organisational Growth The resource acquisition approach
Stage 1: Entrepreneur attracts all resources
Stage 2: Ad hoc delegation of resource acquisition
Resources

17. Organisational Growth The resource acquisition approach
Stage 1: Entrepreneur attracts all resources
Stage 2: Ad hoc delegation of resource acquisition
Stage 3: Delegation to management team
Resources

18. Organisational Growth The resource acquisition approach
Stage 1: Entrepreneur attracts all resources
Stage 2: Ad hoc delegation of resource acquisition
Stage 3: Delegation to management team
Stage 4 Managed by specialists functions co-ordinated by entrepreneur
Resources

19. Summary Organisational growth is multi-faceted, four perspectives:
Financial
Strategic
Structural
Organisational

20. References
Wickham, PA (2001), Strategic entrepreneurship, Chapter 20, Prentice Hall
Carter S and Jones-Evans D (2000), Enterprise and small business, Chapters 16, 17, 19, 22, 23, Prentice Hall.