Generalising Theories Explaining the Different Modes of SME Development and the Associated Growth Trajectories

Abstract

Previous research has identified two forms of “abnormal” growth – styled as business dwarfism and gigantism - which can both lead to missed opportunities for owners/entrepreneurs and local economies, and even to business crisis and collapse. It has also shown that stunted and inflated growth phenomena, rather than being characterised by completely different rules and rationales, are closely related and that certain fundamental structures and processes underpin both those forms of ab-normal company growth behaviour. This paper reports an examination of a further SME phenomenon – what we have chosen to call "micro-giants". These are companies that would be categorised as rela-tively small firms but are actually competing successfully in non-niche markets with much larger firms, or even multinational giants. As such, these firms have grown their sales to significant levels by what might be considered a normal growth trajectory. Three detailed case studies of micro-giant firms are described. Detailed structures inter-relating the firms‟ strategic assets are examined and found to be similar in many respects to those identified for firms experiencing abnormal growth. It is contended that viewing the management of strategic assets as part of the normal business management process, while reflecting that both normal and abnormal growth behaviours can ensue, is a physiological approach. This is distinct from the “where things went wrong” or pathological approach of the earlier work. This reinforces the validity of the strategic asset management models as tools for understanding small firm growth dynamics.