Storey's Three Comopnent Model

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Moving on to the second part of the question looking at Storey’s , “Three Component Model” and how useful it is in identifying the key characteristics of successful growth businesses. Most of the small businesses do not grow beyond their classification as a micro firm, very few of the small firms rise to become a medium-size enterprise, and even fewer rise to become large companies in the future. Storey (1994) has identified three key components in the analysis of the growth of the small firms, they are influenced by the characteristics of the entrepreneur, the characteristics of the organization; and the types of strategy associated. Various different characteristics of each component can lead to a different type of growth within the SME. The characteristics of the entrepreneur are widely accepted as the vital ingredient that influences growth. For example, the personal goals of an entrepreneur are likely to influence why a business was started in the first place, as well as the strength of the firm’s growth orientation once it was established. Storey’s places less emphasis on personality per se and more on the personal characteristics which influence access to resources. These include * Motivation: This is likely to be the most indispensable and essential action or a commitment by the entrepreneur which makes a considerable difference in the growth of the enterprise. * Previous management experience: Earlier knowhow of organizing people and processes is important in maintaining growth. * Demographics of the entrepreneur: This is essentially with regard to the personality traits of the entrepreneur viz. Age and Education. These two traits can influence the growth of the firm, Entrepreneurs with higher educational qualifications are more likely to find high-tech and knowledge-based firms which in turn can be linked with higher growth rate of the firm. * Team management over individual management: Access to a wide range of resources, skills,...
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