Relation of Dominant Problems to Stages of Growth in Technology-Based New Ventures

Investigates the growth patterns of new ventures. A multimethod research design is employed to address criticisms of the literature on stages of growth. While the previous research found that problems influence internal organization, this study determines that problems also influence growth patterns. Two case studies are undertaken to examine the growth patterns of technology-based startups. Sixty managers and other employees were interviewed at two manufacturers of computer-based office products, located in Pennsylvania and Florida. This research generates a midrange theory of growth that applies only to certain organizations. The four stage model includes conception and development, commercialization, growth and stability. The validity of this stage-of-growth model is then assessed by studying the relation of dominant problems to stage. Four primary patterns of association are investigated, using responses to 105 questionnaires sent to a portfolio of firms in 1982. Types of problems include resource acquisition, technology development, vendor relations, production start-up, growth of sales and market share, profitability and internal controls. Results demonstrate that particular dominant problems are linked to each stage of growth. Problems and stages of growth do overlap, but there is also some support for a predictable pattern of problems faced by a firm as it grows. (SFL)

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