Free Accounting Dissertations - Education, Experience And Environmental Dynamism Appear To Magnify The Effect Education, experience and environmental dynamism appear to magnify the effect that growth aspirations have on growth.
When examining the suitable strategy planning for a small firm we have to bear in mind that usually in a firm of this size, the manager is also the owner. Woods and Joyce (2003) made a comparison between the owner-managers and other managers in terms of the growth record of their businesses suggested that the use of tools did confer advantages to businesses. The evidence for this is as follows. First, respondents were asked to describe the current health of their business. They could identify it as ranging from growing rapidly, through healthy and growing, stable, and finally declining. Out of the 41 firms that described themselves as rapidly growing only three respondents were owner-managers. Of the 28 declining firms 15 respondents were owner-managers. There was a statistically significant association between firm performance and respondent. It seems that 188 owner-managers were more likely to be in firms that were declining and less likely than other managers to be able to report a growth record. Second, the use of strategic tools was correlated with the performance of the business. On average, rapid growers used 3.75 tools compared with only 1.00 for the decliners. Interestingly the healthy and growing group used 2.36 and the stable group 1.75. This was significant (F = 3.490, at 0.017 level of significance). Third, owner-managers used typically 1.38 tools as against 2.34 for the other managers (F = 6.294, 0.013 level of significance). The result of the above research could be summarized as follows: A) the use of strategic management tools causes growth. Hence, owner-managers are less likely to be in firms that are growing because they do not make use of strategic management tools. B) owner-managers are more prone to be in firms that are declining and are thus not under the same pressure from their environments to use strategic management tools needed to cope with more dynamic growth issues. C) as the firm grows the owner-manager starts to recruit managers who have had previous exposure to strategic management tools and naturally use them in managing the firm’s strategy. D) As the firm begins to acquire the tools its managers become increasingly aware of their own lack of expertise, consequently identifying this as a barrier to future growth. Exposure to some of the tools has made them much more critical of their own expertise.
b. Re-structure of the marketing strategy
One of the basic elements for the successful operation of an enterprise no matter its size, is the marketing strategy, in other words the method that is going to be used in order to inform the public for the existence and the areas of operation of a company which is activated either in the products or in the services area.
