Growth Strategy in Entrepreneur Managed Small Organisations in Auto Component Sector

Abstract

Entrepreneurs of small organisations describe growth differently. Growth strategy of these organisations is a function of industry structure and performance, entrepreneurial motivation, attitude, and competence of the entrepreneurs in strategy planning. Typical characteristics of small organisations which make these organisations different are flexibility and short term orientation, and long term entrepreneurial vision and strategic growth planning. The paper aims to fill up literature gap in the area of strategic management and strategic decision making process in entrepreneur managed small organisations. The paper presents two theoretical frameworks on growth strategy planning in small entrepreneurial organisations based on a study of small auto component manufacturers of central India. Grounded Theory approach was adopted for data collection and analysis to arrive at the strategic frameworks. Indian auto component sector represents the competitive business environment. Two major strategic frameworks have emerged from the study. In 'focused customer based growth strategy' entrepreneurial vision towards a single customer is the basis for growth planning. Customer relations, low cost automation, and agility to match demand uncertainty are the important dimensions. In 'multiple opportunity based growth strategy' the entrepreneurs choose data based approach to search for new opportunities, value addition and cost efficiency with technological support. They develop investment capability to establish supply chain collaboration among manufacturing bases established at various locations. The paper adds to theory building on entrepreneurial growth strategy in small business organisations