The necessity of transition for small entrepreneurial management firms

The ambition of any entrepreneur is to expand his or her business as bigger as possible. In the early stage of the business, the size normally small with few capital, and entrepreneur does his or her best to make the business become bigger and move to prosper. It is necessary for small sized firms do management transition from entrepreneurial to managerial.

In the process of development, the entrepreneurs development are normally neglected, because the decision making process is centralized by the entrepreneur individually. But it is impossible to centralize all decision making in any firm. If the entrepreneur involves in all the level of decision making, he or she has no time to create general strategy. Entrepreneur can decentralize his duties to capable employees and let them have right to make decisions in the business. And it is not necessary for entrepreneur to be involved in low level of decision and personal problems of subordinates. Thus, entrepreneur needs an over-dependence on one or two key individuals for its survival and growth. With regarding to the entrepreneurs’ managerial skill and training, it varies entirely depending on their competence. But entrepreneur is not a versatile person that he or she is insufficient in certain fields and needs help from the others. What’s more, the final key characteristic of entrepreneurial firms is their highly paternalistic climate. Because they are small and have a relatively stable group of “core” employees, these firms develop a high sense of family among their members.

When the firm grows rapidly fast, a small problem can terminate its progress. Those characteristic mentioned above should be noted and they are essential to the success of the small, entrepreneurial managed firms at least up to a point. Beyond that point, however, they can become barriers to the firm in its efforts to capitalize on further market opportunities. As an entrepeneur, when these characteristics start turing into barriersk, he/she must realize that the mode of managing his/her business require a change from entrepreneurial to professional management.

Reference:

Hofer, C.W.,&Charan, R. (1984). The transition to professional mangement: Mission impossible. American Journal of Small Business, 9(1).