Sme Growth Theory

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As for SMEs, they are often characterized by the close relationship between the company and the executive. It is often the case that the manager and the shareholder is the same person. There is a French study that shows that 44% of SME directly hold more than fifty percent of their business capital. More generally, unlike what we have seen for large enterprises where management and ownership are often separated, in the majority of SMEs, they have their head an owner who is also the leader. This greatly influences the determination of objectives for the company. The company is often built as an extension to personality, therefore the objectives of the business are determined by the lifestyle of the leader. One of the objectives of the leaders…show more content…
The stages are leading companies from birth to maturity or even decline through a phase of survival and of course a growth phase. Changes of role management as well as the style of the above, the structure of the organization but also to the strategy characterize each stage. For many years the concept of growth that we discussed was the main tool for explaining the development of enterprises in regard to management science. This gave rise to many models based on the theory with a variation in the number of stages, and it is the same for the explanation of the causes and consequences of growth. Growth is a very common tool in the field of pedagogy and the stages are often the most explanations given for growth. The trade press is also an avid user of this explanation of growth, but is also widely used by consultants. Simplicity to explain growth with these stages, determinism and analogies with human situations has contributed to their…show more content…
According to some research, we can deduce three proposals. Firstly, just like a living thing that grows, one can clearly identify distinct stages in a company that is growing. Secondly, companies are developing based on predetermined rules starting from a condition called primitive and to monitor the implementation and maturity. Thirdly, the sequence of these stages is predetermined so predictable. This pattern of growth also has five phases. It logically starts with the phase of the birth. This first stage is dominated by the role of the director, designer and entrepreneur is characterized by a simple and informal organization. The following stage is called the growth phase. The company will set up its distinctive competencies. It will seek to generate the most revenue in order to benefit from economies of scale. Typically, this stage involves a division of managerial tasks and some formalization within the company. In the third stage, which is next, is the stage of maturity, there is a stabilization of the company's business and the degree to innovation is declining. In addition, the structure of the company is bureaucratized. The fourth stage, which is also the penultimate stage is the recovery. It is characterized by a complex strategy control system and planning is established. The fifth and final stage is the decline that leads to stagnation by the

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