Managing the Growing Organisation - Literature review Example

Managing the Growing Organisation Name Course Instructor Date Introduction The world’s major business enterprises that surround us did not just mushroom one day and found themselves on the world’s top echelon of successful enterprises. Such huge and established enterprises underwent a number of stages before they fully matured to what they are currently. According to McConnell, McFarland and Common (2012, pp. 5-7) assert that finding a suitable environment and coupling it with a suitable business idea often transforms a start up in a major enterprise if well harnessed. Community Futures (2012, pp. 10-12) asserts that ensuring that everything is in place before embarking on opening a business enterprise is usually essential because from the beginning, one is always able to tell whether the business will be a long time venture or a short one. Community Futures further asserts that when starting a business, one should always be ready to walk the talk before settling down to reap the benefits. Newfoundland Labrador (2010, pp. 2-5) asserts that many people open small ventures with the aim of being their own bosses, a case that leads them to the wrong starting. Newfoundland Labrador claims that there are usually several factors to be viewed and weighed before deciding to venture into the business world. This paper is aimed at studying the five stages of small business growth and then focussing on one, the existence phase. Moreover, the paper will look at three organisations in the light of the five stages of growth. The five stages of small business growth According to Churchill and Lewis (1983, pp. 1-8), there are five stages that a small business usually undergoes before realising its full potential. Although small business uprisings usually differ in sizes, Churchill and Lewis assert that the majority of them usually under the same growth stages in one way or the other. The five stages that Churchill and Lewis identified are; existence, survival, success, take off and resource maturity. In order to successfully manoeuvre through the stages, the two assert that the proprietor’s participation is essential in seeing their business venture through. They further argued that each stage of development was defined by the magnitude of the enterprise at the time of the review. The administrative approach, corporate construction, the degree of formal structures, the chief objectives and the proprietor’s participation are factors that have overtime been used to determine the stage of growth that a business is at. At the existence stage, the major issue is usually the attraction of an ideal clientele and the delivery of the goods and services that the targeted clients are supposed to receive. According to the University of North Carolina (2013, pp. 1-4), at this stage, self assessment as a business proprietor and carrying out a feasibility study to determine whether there is the availability of customers, whether the planned products will satisfy the needs of the clients and how the deliveries will be made are some of the activities that are carried out. Moreover, the question of whether there are enough funds to offset the costs usually arises. At the existence stage, the business proprietor often does everything or incorporates a few assistants because the major priority is usually to ensure that the enterprise stays afloat. The survival stage is usually essential because it portrays that the business is up and running because its products are adequately fulfilling the clientele’s needs and that it can satisfactorily maintain them. At this stage, existence no longer becomes the major issue but rather the balancing act between the income and expenses. Moreover, the issues of whether the enterprise can cough enough returns in order to cover the aging assets develop the business even further often arise. At this stage, although the business is considerably larger, the proprietor still has the final say on the major issues that affect the uprising (Naumes, Naumes and Merenda 2006, pp. 64-65). Sustaining the capital assets is the major tussle that the proprietor is caught up in an attempt to ensure that the business holds up. Relishing in the setup’s achievements, the major task at the success or stabilization stage is usually whether to develop the business further or to ensure that the business just remains gainful and steady (Ontario 2009, pp. 39-41). According to Eggers et al (1994, pp. 131-144), at the stabilization stage, the enterprise is feasible and thus can easily sustain the proprietor. Moreover, if all factors are held constant, at the success phase, the enterprise can stand for several years. The major impediment is usually the making the decision of either staying stagnant or taking the enterprise to the next level. Churchill and Lewis claim that at this stage of development, most proprietors often classify themselves as a separate entity from their businesses. At the take off stage, the business has all the intensions of ensuring that its growth is heightened and this is usually done swiftly, although the most important question is usually whether the proprietor is ready to allow the inclusion of experts in the running and management of the business, because with the opening out of the venture, running it becomes multifaceted (Department of Economic and Community growth 2013). Moreover, the business should be ready to handle the growing demands for customer satisfaction and production that come with the extension and development of the business. Since the business is now out in the competitive arena, expert departmental leaders are usually required to ensure that the progressive enterprise stays afloat (Organisation for Economic Co-operation and Development 2012). The final stage of small business development is usually the resource management, a phase of growth that often forces the business to ensure that it is secure and thus effectively manage the profits that the enterprise gets because of the speeded growth at the take off stage. Moreover, at this phase the enterprise is usually stable because all the developments have been attained because it boosts of a very skilled human resource. At this stage harnessing business elasticity and the entrepreneurial strength of mind amidst the turbulent times that come with this status is usually essential in ensuring that the enterprise’s size stays intact and fully operational (Solymossy and Penna 2001). At this stage, ensuring that there is no incompetence is usually essential because professionalising the enterprise is usually the main focus. Existence Phase At this stage, forming or coming up with a business is usually what matters because this is usually the brainstorming stage of enterprise creation. In addition, attaining and ensuring that the gained customers are fully attended to and thus satisfied with the offered products and services in order to retain them is usually a core undertaking at this stage. Since it is only but a start up, the proprietor often solely manages it and in some cases with a number of assistants who report directly to the owner. If assistants are required, then their business capabilities should average because without it then it will be hard to tend to the needs and whims of the clientele. In this set up, the managerial expertise and any business connection made are usually as a result of the proprietor’s own capabilities and knowledge (Accenture 2011). The existence stage also encompasses the search for a larger marketing platform in order to attract and retain a greater number of customers. Through innovative activities, the proprietor, who also always doubles as the marketing officer usually come up with ideas of how the start up can gain access to more customers by finding ways of improving on the products and services delivered and how the packaging of the services and goods is done (Michalacci and Suarez 2002). Despite all these, money is usually essential in ensuring that all the business demands, for instance production, deliveries and payments are made effectively. The organisational structures such as management control systems are usually limited or non-existent for the reason that the complexities at this stage of growth do not require them. To a greater degree or entirely, the proprietor is usually the enterprise because he is usually the engine of the business and thus without him, then there is no business. Profiling organizations based on the five stages of small business growth structure Vodafone is a worldwide telecommunications corporation that is based in London and has several catalogued outlets in other major towns and cities, for instance, Newbury. It is ranked as the globe’s second principal mobile telecommunications corporation due to its enormous customer base and quarterly earnings. The corporation had a well structured system of leadership and management control system that analyses the performance of the workers and the organisational structure in order to ensure that production and performance are at the peak (Merchant 2009). With reference to the five stages of small business growth, Vodafone is at the fifth phase, resource maturation. This corporation is at this stage for the reason that since it has all the relevant resources and expertise, it has entered into calculated planning in order to ensure that its position at the top is always consolidated, a feature that has seen it open several other subsidiaries worldwide. Wal-Mart Stores is another worldwide retail firm that is based in the United States and operates big discount suppliers. Despite being rated as the globe’s third principal public firm, it also doubles up as the major private employer because of its numerous outlets. At some point, Wal-Mart was the most lucrative retailer in the United States. This corporation has made several other business investments outside the United States, all of which have been registered under different names. Basing this organisation on the five stages of business growth that small enterprises undergo, like Vodafone, Wal-Mart is at the resource maturation stage because the firm has accomplished all the developmental requirements and thus is stable. Moreover, Wal-Mart, focussing on its spirited business skills, has set up several outlets in order to cement their position at the top (Roberts 2007). Oracle Corporation is an American worldwide computer expertise firm based in California. Being ranked as the third principal software manufacturer, Oracle has immersed itself in the business of manufacturing and marketing its computer hardware products in order to ensure Microsoft and IBM are not further ahead on the competition chart. Equipped with a stable and expert management system, Oracle has been able to comprehensively surpass its monetary expectations thus establishing itself as a greater competitor in the making and marketing of computer hardware appliances (Kober, Juliana and Paul 2007). This corporation falls in the resource maturation because they have secured their position at the top and thus maintaining it there is not too much to ask. References Accenture, 2011, Business at its Best: Driving Sustainable Value Creation. Retrieved 9/5/2013 from http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Business_at_its_Be st.pdf Churchill, N, & Lewis, V, 1983, The Five Stages of Small Business Growth. Harvard Business Review. Retrieved 8/5/2013 from http://www.tameer.org.pk/images/The_Five_Stages_Of_Small_Business_Growth.pdf Community Futures, 2012, Starting a Business 101. Canadian Edition. Retrieved 8/5/2013 from http://www.smallbusinesssuccess.ca/ebooks/meridian/pdfs/eBook-Starting-a-Business- 101.pdf Department of Economic and Community growth, 2013, Tennessee Smart Start: Small Business Guide. Retrieved 8/5/2013 from http://www.tn.gov/ecd/bero/pdf/TNSmartStartGuide.pdf Eggers, J, Leahy, K & Churchill, N, 1994, Stages of Small Business Growth Revisited: Insights into Growth Path and Leadership/Management Skills In Low- and HighGrowth Companies. W.D. et al, Frontiers of Entrepreneurship Research 1994.Babson Park, MA: Babson College. Kober, R, et al. 2007, The Interrelationship Between Management Control Mechanisms and Strategy. Department of Accounting and Finance, The University of Auckland Business School. Australia: ELSEVIER. McConnell, K, McFarland, C & Common, B, 2012, Supporting Entrepreneurs and Small Businesses. Retrieved 8/5/2013 from http://www.nist.gov/ineap/upload/RI_SmallBizToolkit-2012-Web.pdf Merchant, K, 2009, The Summary of Management Control System. Linkoping University. Michalacci, C & Suarez, J, 2002, Business Creation and the Stock Market. Retrieved 9/5/2013 from ftp://www.cemfi.es/pdf/papers/js/R8022.pdf Naumes, W, Naumes, M & Merenda, M, 2006, A Case Based Analysis of the Stages of Entrepreneurial Growth: A Preliminary Study. International Journal of Case Method Research and Application XIX, 1. Retrieved 8/5/2013 from http://www.wacra.org/PublicDomain/IJCRA%20xixi_i_pg62-73Naumes.pdf Newfoundland Labrador, 2010, Steps to Starting a Small Business. Innovation, Trade and Rural Development. Retrieved 8/5/2013 from http://www.ibrd.gov.nl.ca/starting/generalsupport/SmallBusinessHandbook.pdf University of North Carolina, 2013, Business Start-Up and Resource Guide: Starting a Business in North Carolina. Retrieved 8/5/2013 from http://www.sbtdc.org/pdf/startup.pdf Ontario, 2009, Your Guide to Small Business. Retrieved 8/5/2013 from http://www.ontariocanada.com/ontcan/1medt/smallbiz/sb_downloads/yrguide_sb_en.pdf Organisation for Economic Co-operation and Development, 2012, Management Training in SME’s. Retrieved 8/5/2013 from http://www.oecd.org/cfe/smes/2492440.pdf Roberts, J, 2007, Introducing organisational Behaviour and Management. United feature Syndicate. Solymossy, E & Penna, A, 2001, Sustainable Growth for the Small Business: A Theory of Organisational Transition. An Entrepreneurial Odyssey: Proceedings of the Second Annual USASBE/ SBIDA Joint National Conference, Orland. Read More