MANAGING GROWTH

New ventures pass through transitional stages that present new challenges to their founders.  These transitional stages are represented by an organizational life cycle  The organizational life cycle requires changes in entrepreneurial behavior, and because many entrepreneurs cannot adapt to new role responsibilities, their ventures can fail or be terminated.  In some instances, the venture survives but the entrepreneur is ousted.

 The organizational life cycle:- -----early growth ----maturity ----decline Slow growth—rapid growth---moderates growth---saturated—maturity( for many followed by decline) .

product/market definition and organization)  . expansion.The Entrepreneur’s Perspective:-Transition stages for entrepreneurial ventures--Start up. revival and decline ( these are explained in terms of three variables. consolidation. growth.

alter services. and experiment with marketing tactics in an attempt to survive  1 . entrepreneur modify their products. change distribution systems.Start up stagegrowth is inconsistent no expected sales struggle to survive During this initial stage.

 2 Expansion stagerapid growth new product potential innovation and development .

Start up stage: Single product or restricted line of merchandise and services-----positioned to compete in one market or to serve limited clientele  Expansion stage: Multiple products or expanded line of merchandise and services----positioned in new markets and among a wider group of customers or clientele  .

Weaker companies fail. The result is a competitive struggle at a slower rate of growth during what is often called an industry shakeout period. and many consolidate to remain profitable.3 Consolidation stage: As competition intensifies within a growing industry. business are faced with marginally smaller incremental shares of markets.  . some are sold or merged with others.

Consolidation may— reduce product lines retreat from marginally profitable markets reduce staff stream line distribution system withdraw from high risk markets  .

4 Revival stage: The revival stage is one of rekindling organizational growth.  . Growth can be achieved by clever repositioning of product lines and services through purposeful market segmentation Repositioning sets the stage for a strategy of product or service diversification.

greater responsibility is given to division managers for independent development . innovation is essential. In order to achieve rapid growth. and because the company needs to incubate new ideas.

they avoid decline. 5. Successful ventures will not complete the life cycle: by definition. Growth declines once again if revival strategies are short lived or ineffective Companies in decline often are those that have diversified too widely or created excessively bureaucratic organizations. . Decline stage.

 Changing entrepreneurial Roles:   Founding the venture There is deference between leaders and managers .

that permits them to maintain psychological distance between their personal lives and business decisions  . think strategically to create opportunities and resolve conceptual.Leaders are involved emotionally in a venture. long term problems and provide the inspiration necessary for sustained momentum  Managers have a transactional orientation.

Finance credit management. purchasing . HRM and R&D  . inventory. developing creative ideas in to marketable commodities and adjusting idiosyncratic phenomena  Guiding the venture through expansion:--Management responsibilities increase as venture expands An entrepreneur unable to handle all the functional management activities—say marketing .Success depends on shaping expectations.

During expansion. who plans and guide subordinates toward fulfillment of organization objectives.  ( Federal Express-Fed Smith) ―transitional state of mind‖  Few entrepreneurs  think—hiring (qualified ) staff is expense not as asset ( as a result their ventures poorly staffed)  . the entrepreneur's role is that of CEO.

****Growing pains that result from a poorly staffed organization:  The entrepreneur is overwhelmed with work. plan and lead the venture  The entrepreneur and others spend their time ignoring strategic growth and development . there are not enough hours in the day to manage activities.

 The entrepreneur .subordinate managers and employees lose track of where the firm is going and what they are trying to accomplish ( These problems can be reversed through effective human resource planning and management)  .The entrepreneur is too busy to be aware of what others are doing and employees are no longer aware of what must be done.

 The transition from intuitive decision to strategic management Managing Consolidation --Rapid growth cannot continue indefinitely and at some point industries go through shakeout periods .

During rapid growth management is concerned with gaining new resources. Rationalization becomes prominent concern  .  Managing during consolidation is a fight for survival.finding expansion capital. adding employees and developing new products or services.

 Turning the venture around: Reversing a company’s pattern of poor performance is called turning it around .

 Objectives and new venture growth Influence rate Of growth and duration of Effort required to be expand Strategic objectives: Profitability Significant market position Income to founder or investors Size for economies of scale Product R&D Image Founders personal aspirations Growth rate When achieved. satisfy strategic Objectives or influence changes Strategies for achieving growth Market diversification Product development and diversification Expansion of services Other alternatives .

 Diversification options for new ventures Expand into new customer niches with existing products Open new markets with similar products and customers In new geographic areas Expand overseas by exporting Develop new products through R&D for existing Customers Licence or acquire products or expand merchandise line for specific market niches Expand services for clients Import products for domestic markets Market diversification Product diversification Combined diversification New products developed or acquired for new market niches in local or new geographic areas .

The small business owner who has the entrepreneurial spirit remains in small business. . starting new ventures. selling . The small business career emerges from personal aspirations of business owners who prefer the autonomy of ownership rather than a job. Implications for entrepreneurial careers---- Entrepreneurs seldom stay with their ventures through the entire organisation life cycle.buying and restarting.

they want new challenges and opportunities for self fulfillment -----they want to prove their mettle in innovative and competitive jobs --.  .Women entrepreneurs Women entrepreneurs have been making significant impact in all segments of the economy  They have made their mark in business for the following reasons --.they want the change to control the balance between their family responsibilities and business lives.

 The new thrust– circumstances. spread of education  New awareness  . economic policy and development.Women entrepreneurs have excelled in their enterprise.the fear of success haunt women in general.

conscious. patience.hardwork. educated determination to excel. industrious. enthusiastic. Accept challenge.studious  . keenness to learn and imbibe new ideas. ambitious. drive. motivator. adventurous. experienced intelligent perseverance .Some of the outstanding qualities. skilful. unquenchable optimism.

nonpersistent attitude. Poor self image of women. susceptible to negative attitudes. cultural values. lack of social acceptance . afraid of failures and criticism.Psycho social barriers.lacking in leadership qualities  . inadequate encouragement. inadequate motivation. discriminating treatment. role conflict. low dignity of labour. faulty socialization. lack of courage and self confidence.

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