The paper "Conceptual Frameworks for the Determinants of Firm Growth " is a good example of business coursework. Entrepreneurship refers to the willingness and ability to take risks to develop and organise a business venture to make profits. It requires the ability to recognise opportunities and develop the right skills, attitudes and initiatives to manage a business enterprise in a competitive and constantly changing environment. Growth is a key indicator of a well managed and thriving business enterprise. Entrepreneurial growth refers to the quantitative increase in terms of value addition, revenue generation and business expansion.
It can also be defined qualitatively in terms of customer service and products, market positioning and customer goodwill Ferriani, Cattani and Baden-Fuller (2009, p. 1548). Although the factors that determine entrepreneurial growth have been studied extensively, there are disagreements whether success is the only measure of growth. This paper attempts to explain whether small firm growth is the only measure of an entrepreneur’ s success. Conceptual Frameworks for the Determinants of Firm Growth Entrepreneurial activity implies discovery, evaluation and exploitation of opportunities to make economic gains. It involves creating and marketing new products and services, development of new production processes or implementation of new strategies and markets for new products (Minniti & Moren 2010, p.
307). Entrepreneurial opportunities tend to be unexpected and unvalued situations with great economic potentials. In any market, opportunities for entrepreneurship are a result of market agents having differing perceptions on the utility of resources and how they should be converted to consumable products and services. Thus, successful entrepreneurship is merely the discovery of economic opportunities and the mobilization of resources to spearhead an economic activity. Once an opportunity has been discovered, the entrepreneur must create the market.
This means that the entrepreneur must obtain resources and convert them into an output that can satisfy specific needs in the market. The entrepreneur must also take further steps to protect his innovative ideas so as to attain competitive advantages and sustained firm growth. Research studies suggest a number of entrepreneurial and firm growth influences, grounded on a multitude of theoretical paradigms. As a starting point, firm growth which is the most important outcome of successful entrepreneurship is viewed as a result of strategies, firm-specific resources and entrepreneur’ s capabilities.
Thus, the current conceptual frameworks approach for understanding entrepreneurship focus on the respective roles of the individual (entrepreneur), organizational and environmental determinants. Individual Determinants of Firm Growth The individual determinants approach states that the growth of a firm is dependent on the decisions made by the individual (entrepreneur). Studies indicate that the entrepreneur’ s personality, personal competencies and growth motivation are important factors that determine firm growth. The need for achievement is perhaps the most important personality trait that influences firm growth. According to Deakins and Freel (2009, p.
43) entrepreneurs with a strong desire to excel are more likely to engage in behaviours and actions that will lead to better results. Ferriani, Cattani and Baden-Fuller (2009 p. 1545-1558) found a strong correlation between the need for achievement and entrepreneurial activity, a finding that was also confirmed by Allen (2009, p. 55). The need for achievement goes hand in hand with the entrepreneur’ s individual competencies. This refers to the skills, knowledge and abilities required to perform a certain task and achieve desired outcomes.
Entrepreneurs with specific competencies are more likely to be successful in growing their firms than those without the competencies.
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