Entrepreneurship Skills for Growth Orientated Businesses

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what entrepreneurship skills are required to develop a growth orientated business and how these. skills might be enhanced,Barriers to Growth, Part of the difficulty in achieving consensus regarding how to transform small businesses. into growth orientated firms originates from the inability to find a settled definition regarding what. is a growth orientated firm Having reviewed numerous research studies relating to high growth. firms Hoy et al 1992 recorded that a wide variety of growth measures were used ranging from. increased market share or enhanced venture capital funding to growth in revenue return on. investment or the number of customers of a firm Within these studies employment was generally. the most accepted method of measuring growth This occurs because the data is easily gathered. determined and categorised and because this system is already frequently utilised to ordain firm. size Additionally employment figures will be unaffected by inflationary adjustments and can be. applied equally in cross cultural studies although difficulties may arise in determining how one. measures part time or seasonal employees It is also worth noting that while a firm may increase its. level of employment it does not necessarily follow that it has expanded its market or financial. success However it is now broadly agreed that if a firm is to achieve sustained expansion it must. satisfy a number of requirements for growth it must increase its sales it must have access to. additional resources it must expand its management team and it must extend its knowledge base. But each set of requirements establishes a different set of obstacles for the entrepreneur. Beyond this finding the broader review of the literature identified that the key. barriers to firm growth can be broken into two broad categories Internal and External These are. detailed in Table 1 below with the most frequent barriers identified given under each category. TABLE 1 Barriers to Growth taken from Review of Literature. Labour Market Conditions,Market Structure Competition. Government Policy,Economic Climate,Legislation,Access to Markets. Psychological Motivational Factors,Management Capability. Shortage of Orders,Sales Marketing Capacity,Poor Product Service.
Table 1 highlights that a decision by a firm to grow its business is initially influenced a range of. External Barriers or influencing factors Concerns about matters such as the availability of skilled. labour lack of competition favourable government policy and economic climate supportive. legislation and easy access to markets all contribute to an entrepreneur management team. deciding to grow the business However a 2009 report by the Ewing Marion Kauffman Foundation. found that more than half of the companies on the 2009 Fortune 500 list were launched during a. recession or bear market along with nearly half of the firms on the 2008 Inc list of America s fastest. growing companies Examples of companies founded during a recession over the past century. include HP Burger King Fed Ex CNN Microsoft and MTV This finding highlights that in contrast to. popular opinion a negative economic environment does not necessarily mean that one cannot. achieve high growth with one s business although it does reduce the opportunity for growth. In exploring the principal barriers to firm growth through a detailed review of the literature. there was broad agreement that the primary issues involved in growth are 1 motivation 2. resources and 3 market opportunities Indeed much of the literature highlights the central role of. the business owner in determining future growth and that their attitude to growth may even. influence the chances of firm survival A study by Orser 1997 found that of the firms studied in her. research those firms whose owners had stated five years previously that they wanted to grow the. business were now more successful while the majority of firms owned by entrepreneurs who did. not prioritise growth had either not grown or had failed. Figure 1 Growth Intentions,Attitudes Competitive,Significant Growth Growth. Others Intention Outcome,Perceived Managerial,Feasibility Skills. Orser found that the growth intentions of an entrepreneur were influenced by their own attitudes. by the views of other people such as their spouse business partner accountant or banker and by. the perceived feasibility of success The attitudes of the entrepreneur were influenced by positive. factors such as financial implications contribution to the community and recognition of the. community but they were negatively influenced by factors such as work family balance additional. stress and potential loss of control The combination of these influences contributed to the. accumulation on an entrepreneur s growth intentions which combined with competitive advantage. and managerial skills determined the growth outcome of the firm. Much of the literature reviewed agreed that the most significant barrier to growth was. based upon psychological or motivational factors If there is not a strong commitment by the. entrepreneur management team to grow the business then it is unlikely to happen of its own. accord However even if the commitment to growth is demonstrated then issues such as. management capability funding shortage of orders sales marketing capacity and poor product. service offering has also been featured in the literature as being the primary barriers to firm growth. A study in the UK by NESTA 2011 is very informative in terms of how high growth firms view. barriers and challenges to growth differently to other firms see Figure 2 Perhaps the most. interesting finding from the study is that high growth firms do not see the economy or competition. in the market as a barrier to growth in the same way as other firms Instead they see the ability to. recruit staff and skills shortage plus ensuring a positive cash flow as being the critical issues in. achieving firm growth This suggests that high growth firms are less concerned about what they. cannot control but instead concentrate on those areas within the realm of their own activities. Figure 2 Most Important Obstacle to Firm Growth NESTA 2011. In addition to the above results there were a number of other findings from the literature. review which also offered interesting insight even if they occurred less frequently Siegel et al 1993. found that growth firms were leaner with fewer managers had slimmer payrolls and used their. assets more productively than non growth firms Evans 1987 evaluated the relationship between. firm growth size and age for 100 manufacturing enterprises and determined that firm growth the. variability of firm growth and the probability that a firm will fail decreases as the firm ages Evans. also judged that firm growth decreases at a diminishing rate with firm size Storey et al 1988. discovered that young firms were more likely to achieve greater profitability and grow faster than. would old firms These results help build a profile of growth firms and suggested that agencies. should focus their energies on attracting younger firms who are lean and hungry for success. The review of the literature also considered the reasons for firm failure since such a feature. might offer some additional cues regarding the challenges that entrepreneurs face when building a. business The most frequently mentioned reasons for failure included 1 the founder s inability or. unwillingness to change 2 lack of management skills experience and know how 3 not keeping. complete and accurate records 4 having little focus in activities attempting to be all things to all. people 4 under pricing 5 underestimating competition 6 Mousetrap Myopia the notion that. the world beat a path to your door for having the best mousetrap 7 poor marketing activities 8. weak financial control 9 lack of strategic planning and 10 inadequate liquidity Many of these. causes of firm failure could also be identified as barriers to firm growth and therefore might be. considered in any training needs analysis that is developed regarding engendering firm growth. TABLE 2 Factors Influencing Growth in Small Firms Storey 1994. ENTREPRENEUR FIRM STRATEGY,Motivation Age Workforce Training. Unemployment Sector Management Training,Education Legal form External equity. Management experience Location Technology,Number of founders Size Market positioning.
Prior self employment Ownership Market adjustments. Family history Planning,Social marginality New products. Functional skills Management recruitment,Training State support. Age Customer concentration,Prior business failure Competition. Prior sector experience Information and advice,Prior firm size experience Exporting. As previously stated the review of the literature regarding barriers suggests that for high. growth firms the state of the environment is not the most important concern Instead the evidence. would suggest that high growth firms would view the primary weaknesses as being internal and. within their own control to change Storey 1994 sought to classify the key internal factors that. influence firm growth under identifiable categories and suggested that instead of examining. descriptive models researchers should utilise prescriptive paradigms combining the following. components entrepreneur firm and strategy As can be seen in Table 2 Storey identified the key. elements to each component and argued that all components needed to combine appropriately for. the firm to achieve growth Less rapidly growing no growth or failing firms may have some. appropriate characteristics in the entrepreneur firm or strategy areas but it is only where all three. coalesce effectively that a high growth firm will be found Each component offers indicators of. where weaknesses might exist in the alchemy required to create a high growth firm. It is clearly evident from a review of current entrepreneurship literature that entrepreneurship. involves more than business start up and that it also includes the development of skills to grow a. business together with the personal competencies to make it a success Gibb 1987 noted that. while the entrepreneurial role can be both culturally and experimentally acquired it is consistently. being influenced by education and training It has also been argued that the traditional approach to. entrepreneurship with its emphasis on business start up needs to change and that the relevance of. entrepreneurship education and training must be expanded Indeed it is now widely recognised that. there is a requirement to move from traditional instruction towards an experiential learning. methodology utilising an action oriented mentoring and group work approach to ensure greater. learning effectiveness Within this approach critical thinking and problem solving are recognised as. key skills while it is also appreciated that skill development regarding risk taking innovation. creativity and collaboration needs to be valued more A more hands on approach is also required for. the development of project management and budgetary skills Therefore increasingly it is being. recognised that teaching entrepreneurship skills should be interactive and might include case. studies games projects simulations real life actions internships and other hands on activities But. using active learning methods requires highly skilled trainers and trust in involving participants more. in the learning process fostering innovation and creativity and learning from success and failure. needs to be encouraged It must also be recognised that the entrepreneurial skill development. process occurs over a period of time and requires the active involvement of entrepreneurs. Kutzhanova et al 2009,KEY POINTS,Growth is difficult to define accurately.
Barriers to growth are both internal and external, Growth intentions significantly influence growth outcomes. Key factors influencing growth are 1 entrepreneur 2 firm and 3 strategy. Entrepreneurial skill development process occurs over a period of time. Entrepreneurship Skills Required to Overcome Barriers to Growth. It is still a topic of much debate whether entrepreneurs are born or made While it is. generally acknowledged that there are natural born entrepreneurs there are also researchers who. believe that entrepreneurship is a skill that can be learned Drucker 1985 argued that. entrepreneurship is a practice and that most of what you hear about entrepreneurship is all wrong. It s not magic it s not mysterious and it has nothing to do with genes It s a discipline and like any. discipline it can be learned If one agrees with Drucker s concept of entrepreneurship then it. follows that education and training can play a key role in its development In a traditional. understanding entrepreneurship was strongly associated with the creation of a business and. therefore it was argued that the skills required to achieve this outcome could be developed through. training More recently entrepreneurship is being viewed as a way of thinking and behaving that is. relevant to all parts of society and the economy and such an understanding of entrepreneurship. now requires a different approach to training The educational methodology needed in today s. world is one which helps to develop an individual s mindset behaviour skills and capabilities and. can be applied to create value in a range of contexts and environments from the public sector. charities universities and social enterprises to corporate organisations and new venture start ups. Entrepreneurship Skills for Growth Orientated Businesses Prof Thomas M Cooney Dublin Institute of Technology Report for the Workshop on Skills Development for SMEs and Entrepreneurship Copenhagen 28 November 2012 Introduction Given the current economic challenges facing many countries across the globe the notion of engendering greater entrepreneurial activity has become a

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