The Importance Of Managerial Growth

Finally, regarding the impact of managerial capacities on firm growth we find that firms that have brought in professional managers (divorcing management from ownership functions) are more likely to experience growth and show a greater magnitude of growth (H10 supported). These findings are in line with other organizational theory studies which posit that organizations evolve through their life cycle stages. In their initial phase, firms are limited in their managerial capabilities and also may not grow or wish to grow. In later stages as organizations grow more rapidly, firms need to increase the common set of managerial capabilities to overcome growth challenges in performing organizational tasks in complex external interfaces (Boeker and Wiltbank, 2005). Accordingly, a founder’s involvement in general management activities may be decreasingly useful or even detrimental to a firm’s success as the firm grow. Findings suggest that the transfer of decision-making power from owners to managers is crucial for the growth of the firm because it enhances managerial capabilities by bringing professional managers into the firm and creating conditions for …show more content…
This section aim to extend current understanding of small business growth in a transitional economy by concentrating on the sub-group of growing firms in the same dataset. We investigate the impact of the same determinants of growth in the sample of growing firms and also by conducting separate regressions for three main sectors (manufacturing, services and trade) and two size categories (micro and small and medium firms). Testing the impact of the same factors on small growing businesses and controlling for size and sector will enable us to overcome some of the empirical shortcomings baised towards small size of other studies and have more insights on growth determinants. Our large pooled data set enables to perform this analysis because of large number of