The Process of Firm Growth, 2015, vol. 11, issue 4
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Pozycja The Process of the Growth of Small and Medium-Sized Enterprises (SMEs)(Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione" / Wyższa Szkoła Biznesu - National Louis Univeristy, 2015) Gancarczyk, Marta; Zabalia-Iturriagagoitia, Jon MikelFirm growth is a central topic in the literature on entrepreneurship, strategic management and industrial organization, among others. For an individual entrepreneurial firm, growth is an evidence of the return of the entrepreneur’s investment and self-fulfillment. Growth is also a condition of survival for young and small businesses, as growing firms are found less vulnerable to failure than non-growers (Stam et al., 2006). The macroeconomic importance of firm expansion was recognized in the 1980s, when the phenomenon of gazelles or high-growth firms was first described as those capable of intense size increases within a limited time span (Birch, 1981; Birch & Medoff, 1994; Birch et al., 1994; Storey, 1994; Coad, 2009; Acs et al., 2008). According to empirical research gazelles form a small fraction of business population. However, they represent a disproportionally large share in new job creation (Storey, 1994; Coad 2009; Stam et al., 2006; Acs et al., 2008). Growing firms are also more likely to generate innovations, specifically product innovations involving technological advancements (Coad, 2009; Schreyer, 2000; Storey, 1994; Smallbone et al., 1995). Both researchers and policy makers interested in expansion, focus on rapidly growing firms and on small and medium-sized enterprises. This interest in high-growth enterprises is justified by the observation that the remaining population either grows slowly or does not perform any expansion (Coad, 2009). At the same time, gazelles are predominantly young, small and medium-sized enterprises (SMEs). The dynamics and economic contribution of firms’ growth are negatively associated with age and size, which corresponds to the observation that job losses are generated mainly by the established, large and non-growth firms (Acs et al., 2008). As firm expansion and growth have proved to be a condition for competitive advantage both at the level of individual firms and at the level of the economy at large, the phenomenon of firm growth has become a focus of research. One of the main purposes of this increasingly preeminent research stream is to provide recommendations for firm management and for economic policy, undergoing the risks and challenges in achieving expansion. However, in order to provide these recommendations, we need to better comprehend the entrepreneurial motivations and the attitudes towards growth, the stimuli and impediments to company growth, the potential mechanisms to firm growth and modes of expansion. This special issue seeks to contribute to the knowledge base on the growth process of entrepreneurial firms, which is an emerging stream of research on firm growth. This emerging stream complements the existing perspectives on expansion, which are more focused on: 1) companies’ internal adaptation mechanisms, as reflected in life cycle models, and on 2) determinants and predictors of firm growth (Dobbs & Hamilton, 2006; McKelvie & Wiklund, 2010). We present the focus provided in this special issue as complementary to existing approaches, aiming also to contribute with new findings in addressing some yet underexplored areas. The emerging stream of growth process refers to why and how growth is implemented through proactive entrepreneurial actions and decision-making processes, which are presented in complex organizational and environmental contexts, including cause-effect mechanisms in the history of company development. This holistic approach is a constituent feature of studies on the growth process. It differentiates from the currently dominating focus on the determinants of individual firm’s growth and from the earlier stage models of internal adaptation to the challenges imposed by expansion. In the following sections of this introductory paper, we discuss first the stream of research on the growth process in connection with the extant literature on firm growth. Then we highlight the contribution of the individual papers included in this special issue as well as the contribution aimed at by the entire issue as a whole. Finally, the conclusion delineates some potential pathways for further research as a result of the findings provided by the special issue.Pozycja Entrepreneurial Growth Aspirations and Familiarity with Economic Development Organizations: Evidence from Canadian Firms(Nowy Sacz School of Business – National-Louis University, 2015) Dossou-Yovo, AngeloThe purpose of this paper is to investigate the relationship between the entrepreneurship ecosystem and the entrepreneur’s willingness to grow. This study is particularly interested in exploring the relationship between entrepreneur’s familiarity with the key economic development organizations in the entrepreneurship ecosystem and the willingness to grow. Several studies have investigated the growth process in small and medium sized enterprises (SMEs) since the case has been made that high growth SMEs contribute to economic growth through job creation. To date, these studies have identified multiple internal and external determinants including their effects on small business growth. There is evidence in the literature that characteristics of the entrepreneurs such as the willingness to grow and the entrepreneur’s network are important factors in growth process. However, the relationship between growth process and the entrepreneur’s networking behavior is yet to be fully understood. Drawing from the entrepreneurship ecosystem literature, the growth process literature and the resource dependence theory, this study uses the business confidence survey from 2011 to 2013, which targeted all businesses across all of Halifax Regional Municipality (HRM) in Nova Scotia, Canada, to explore the relationship between the entrepreneur willingness to grow and the propensity to network with key economic development organizations of the entrepreneurial ecosystem. The findings support the assumption that the proportion of businesses that are willing to grow (i.e. hire additional staff and enter new markets within the next twelve months) is higher for the group of businesses that are familiar with the key economic development organizations than for the group of businesses that are not familiar with them. However, the results are not homogeneous across all populations. Our findings also indicate that the higher the expectation to enter new markets over the next twelve months, the higher the odds to be familiar with the key economic development organizations. Our findings contribute to the literature around the association between networking and small business growth.Pozycja Regenerative Medicine as an Emergent Cluster in Tampere Region(Nowy Sacz School of Business – National-Louis University, 2015) Heinonen, Tuomo; Ortega-Colomer, Francisco JavierClusters are important for regional economies and emergent clusters are in a key position, as a means of adding more diversification to the current economic activity by involving new technologies and industries. Science-based industries may be the most promising in this regard since they are encouraged to develop and enhance the economic imaginaries of territories under the umbrella of radical innovations or in the name of broadening the current economic model based on mostly traditional industries. Regenerative medicine (RM) could be an example of these so-called emergent clusters. Regenerative medicine is highly dependent on academic research, which means that local territories must fund the research in this field and, hence, they expect some returns as well. As territories do not typically have existing industries specifically in RM, these industries must emerge or expand from existing ones. Regenerative medicine involves a wide spectrum of different technologies and industries that are likely to form a cluster and benefit from it if successfully developed. The first aim of this paper is to show how some obstacles eventually impede the proper development of these emergent clusters. The second aim is to shed light on how innovations emerge in the cluster and what are the main implications for the territory. In this study, existing literature is used in order to describe the technology market and commercial aspects of the RM sector. Empirically this study is based on the emergent RM cluster in the region of Tampere in Finland. Analysis of 24 conducted interviews helps to contextualize the emergence of the RM cluster in Tampere, where academia is both the booster and the driver of the emergent RM cluster. Commercialization of research in the RM field is one of the goals at the university, even though there are no commercial outcomes yet available. This study contributes to the understanding of emergent cluster development in science-based industries in their embryonic and early stages. Major challenges are pointed out in an emergent cluster that calls for tailor-made socio-economic policies at the meso-level. Tailored policies matter in science-based clusters, and specific sectors in specific stages of development need specific policies in order to become matured clusters.Pozycja External Determinants of the Development of Small and Medium-Sized Enterprises – Empirical Analysis(Nowy Sacz School of Business – National-Louis University, 2015) Lisowska, RenataThe paper aims to identify external determinants of the development of small and medium-sized enterprises and assess their impact on the functioning of these entities in Poland. Meeting this objective required: identifying determinants of the development of SMEs, determining the current development situation of the surveyed enterprises and examining the impact of external determinants on the development of SMEs. The implementation of the above-presented goals was based on the following assumptions: (i) the current situation of the surveyed enterprises is determined with the use of quantitative indicators (turnover volume, number of employees, market share, profit levels) (ii) the analysis of external determinants encompasses three components of the environment: the macro-environment, the meso-environment and the micro-environment, (iii) in each analysed area there are separate analyses conducted for micro, small and medium-sized enterprises, enabling greater precision in the identification of external determinants of development for each category of businesses.Pozycja In What To Invest After Surviving – The Investment Structure of Growing SMEs(Nowy Sacz School of Business – National-Louis University, 2015) Pauli, UrbanThe main goal of the article is to present the research testing a model of investment structure in different phases of SMEs’ growth. The author assumed that the share and structure of investments vary in accordance with the stage of the company’s growth, and it is possible to describe the path which SMEs follow in their development. In the study based on organizations’ growth models, demand for particular resources in subsequent growth stages is presented. The model and investments structure is verified on a sample of 286 SMEs.Pozycja Absorptive Capacity and Its Role for the Company Growth and Competitive Advantage: The Case of Frauenthal Automotive Toruń Company(Nowy Sacz School of Business – National-Louis University, 2015) Lis, Andrzej; Sudolska, AgataThe aim of the paper is to study the role of absorptive capacity for the company growth and competitive advantage through open innovations. The case of Frauenthal Automotive Toruń is used to explore how the routines and best practices associated with the firm absorptive capacity contribute to its success. The case study is to validate the thesis that through developing skills to recognize valuable knowledge in the environment, acquire this knowledge, assimilate, transform and develop it companies are able to apply and benefit from open innovations in order to grow and strengthen their competitive advantages. In order to achieve the aim of the paper the following research objectives have been set: (1) to identify the lessons and best practices applied in Frauenthal Automotive Toruń in relation to the company absorptive capacity; (2) to analyze the relationships between the concepts of absorptive capacity and open innovation; (3) to exemplify and discuss the outcomes of the company absorptive capacity in regard to innovations, company growth and competitive advantage.Pozycja Dynamic Capabilities Associated with a Firm’s Growth in Developing Countries. A Comparative Study of Argentinean SMEs in the Software and Tourism Industries(Nowy Sacz School of Business – National-Louis University, 2015) D´Annunzio, Claudia; Carattoli, Mariela; Dupleix, DoloresAlthough recent evidence suggests that the development of dynamic capabilities (DC) is a key factor to gain and sustain competitive advantages to promote firm´s growth, the question of how SMEs create, identify, and seize opportunities for growth have not been fully explored, particularly in developing countries with scarce resources. The aim of this study is to shed light on how SMEs develop capabilities to grow in the specific context of developing countries with resources constraints. To achieve a detailed description of the processes involved, this study applies a qualitative methodology based on a comparative case study of eight SMEs within the software and tourism industries in Argentine, which have been previously identified as dynamic sectors with high growth potential. Our findings suggest that SMEs develop DC mainly through an emerging process of iterative experimentation rather than through strategic planning. This process involves the coordination of organizational actions and resources, with managers playing a key role.