![]() They were asked to identify as best they could the phases or stages their companies had passed through, to characterize the major changes that took place In each stage, and to describe the events that led up to or caused these changes.Ī preliminary analysis of the questionnaire data revealed three deficiencies in our initial model:įirst, the grow-or-fail hypothesis implicit in the model, and those of others, was invalid. ![]() These respondents participated in a small company management program and had read Greiner’s article. To test the model, we obtained 83 responses to a questionnaire distributed to 110 owners and managers of successful small companies in the $1 million to $35 million sales range. The result was a four-stage model: (1) Survival, (2) Break-out, (3) Take-off, (4) Big company. From present research we knew that, at the beginning, the entrepreneur is totally absorbed in the business’s survival and if the business survives it tends to evolve toward a decentralized line and staff organization characterized as a “big business” and the subject of most studies. The second change was in the stages or horizontal component of the framework. Similarly, a company with two or three operating locations faces more complex management problems, and hence is farther up the scale than an otherwise comparable company with one operating unit. Thus, a manufacturer with $10 million in sales, whose products are based in a fast-changing technical environment, is farther up the vertical scale (“bigger” in terms of the other models) than a liquor wholesaler with $20 million annual sales. The first modification was an extension of the independent (vertical) variable of size as it is used in the other stage models-see Exhibit I to include a composite of value-added (sales less outside purchases), geographical diversity, and complexity the complexity variable involved the number of product lines sold, the extent to which different technologies are involved in the products and the processes that produce them, and the rate of change in these technologies. ![]() ![]() We made two initial changes based on our experiences with small companies. We started with a concept of growth stages emanating from the work of Steinmetz and Greiner. ![]()
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