Managing Entrepreneurial Growth - Life Cycle Stages

Managing entrepreneurial growth

Life Cycle Stages

New venture development is related to primary formulation of the venture that mission, vision, scope, direction and philosophy are determined at this stage (Frederick and Kuratko 2010, 477).

Strategic and operational planning is designed; cooperation's competitive advantage is identified and funding sources are discovered at the second stage, named start-up activities. Numbers of challenges shall occur, such as generating a formal business plan, the search for capital, developing marketing activities and forming an entrepreneurial team (Frederick and Kuratko 2010, 477). The challenges are continued, as entrepreneurs require to discover the right person to do all this task, delegate tasks correctly and fairly to every employee, the possibility in the lack of financial funding, establish a benchmark to examine all the tasks are done in standard and so on.

The growth stage tends to be the paramount in the life cycle stages. If entrepreneurs are staying at the same level and are not motivated to expand their venture, eventually they might leave the enterprise. At this stage, reformulation of strategies and transition from an individual-leadership to a managerial-team-leadership are necessary (Frederick and Kuratko 2010, 478).

The fourth stage is business stabilisation. Developments occur and innovations are required at this stage because numbers of competitions are on the rise too. It is considered as a swing stage because either the business turns out to be profitable or vice versa (Frederick and Kuratko 2010, 478).

Enterprises tend to fail if the entrepreneur is lack of ingenuity at the innovation/ decline stage. Some enterprises acquire other firms to stabilize their own growth or to produce a new product/ services in order to attract more sales (Frederick and Kuratko 2010, 478).

The pace of changes nowadays is accelerating faster than ever before. Therefore, firms must be able to construct dynamic capabilities which stand out among the competitors in order to keep up with the pace. Applications of creativity and knowledge from employees, as well as the exploration of external competencies to supplement the firm's capabilities are the two known methods of building dynamic capabilities. (Frederick and Kuratko 2010, 478)

Actually do

Entrepreneur has the ability to enhance the growth stage by building an adaptive firm.

Firstly, entrepreneur needs to share his/her vision to all of the staff in order to help them understand more about the company's directions, missions, visions and goals (Frederick and Kuratko 2010, 480). Besides, helping staffs to understand their own roles and the differences they make could motivate them to work harder (Bruce and Pepitone 1998). Responsibilities can be shared among all of the employees, as they are sensate to become part of the success and are dedicating to the firm (Frederick and Kuratko 2010, 485).

Opportunity perceptivity can be increased by careful job design and objectives are defined for the person who is responsible. Other than that, watchful cooperation and synthesis of the functional areas allows employees from different areas work together (Frederick and Kuratko 2010, 481).

Continuous morphing is one of the key features to build an adaptive firm. It is an ongoing transformation to change their functions often and regenerate their ephemeral competitive strengths. (Frederick and Kuratko 2010, 481)

Reward system and environment that allows for failure are the essential elements for stimulating employees' desires to be innovative at all times (Frederick and Kuratko 2010, 481). There are various types of reward systems. For example, bonus plans, stock options, awards, reassignments, promotions and non-monetary bonuses (Kotelnikov n.d.). Entrepreneurs can reward their staff by evaluating and examining their innovation and performance. Staffs deserved to be rewarded whenever they produce an outstanding performance, meeting all the criteria of standard set and creating innovative and unique ideas. This can motivate them to work harder and encourage them to spark off more new ideas. Nonetheless, it is argued that reward system is not fair for everyone. Staffs that do not get any rewards will feel discourage and lack in confidence to speak up (Using Various Rewards and Profit-Sharing Strategies in Motivating Employees 2000).

Risk is the word toward success. An organisation always needs innovation to promote growth, in contrast, the business may be eliminated or fail for not being innovative. Therefore, entrepreneurs have to encourage staffs to take risk for trying out new ideas or even accept a certain degree of staff's failure. Never hinder any employees' uniqueness or fresh ideas which are not practiced in the past. These particular unique ideas might just bring the business to another level (Bruce and Pepitone 1998).

It is vital that entrepreneurial leadership is possessed in the management of high growth ventures. Entrepreneurial leadership enables fellow entrepreneurs to visualise the future, think strategically, retain flexibility, and work as a group to initiate changes (Frederick