The dynamics of SME growth processes and the role of enabling constraints: an evidence-based theoretical framework

Abstract

PurposeThis paper aims to explain the dynamics of entrepreneurial decisions and actions (D&As) in the small and medium-sized enterprise (SME) growth process. The study focuses on the changing portfolio and relationship governance and captures these dynamics by using the concept of “enabling constraints” (ECs).Design/methodology/approachIn-depth, long-term and multiple-case study method was adopted based on six high-growth SMEs. Pattern-matching and alternative template approach formed a basis for developing a research framework, further corroborated and advanced in the empirical study.FindingsThe research provides empirical evidence of ECs as entrepreneurial perceptions that both limit (constrain) the range of accessible options and facilitate (enable) new opportunities. This study’s results point to how owner-managers' judgments about growth motives and rationales constrain their choices and how they enable new directions, acknowledging the changing context.Originality/valueThis work contributes to the research on SME growth processes by specifying their dynamics in terms of a creative mutual causality. Here, D&As stem from entrepreneurs' perceptions that are affected by the context, with the latter also shaped by prior decisions and actions. This theoretical contribution has been synthesized in the form of a framework of ECs in the SME growth process with related propositions.

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“…This research aims to contribute to the conceptual development of a special view of DL as a barrier to and enabler of innovation by explaining how DL is related to organizational transformation and to shaping managerial decision-making, especially under time pressure and causal ambiguity (March, 1991). This balanced view of DL ties in with most recent discourses on hybrid phenomena like 'enabling constraints' (Selden & Fletcher, 2015;Gancarczyk et al, 2021).…”

Characteristics of growth management in healthcare business: applying and developing the stages of growth service framework

“…It is critical to study how company manages its growth process (Gupta, Guha & Krishnaswami, 2013), but the related research is scattered and only limited number of studies have the process approach (e.g. Davidsson & Wiklund, 2006;Gancarczyk, Freiling & Gancarczyk, 2021;Headd & Kirchhoff, 2009;Shim, Eastlick, & Lotz, 2000). There are numerous, general stages of growth models (see Levie & Lichtenstein, 2010;Phelps, Adams & Bessant, 2007), but only vague understanding on the context-specific characteristics such as in healthcare business.…”

“…This is in line with the pre-understanding that healthcare entrepreneurs are professionally oriented rather than business growth oriented: entrepreneurs' managerial focus is on care-taking their customers rather than on growth ambitions. The study of Delmar and Wiklund (2008) on small Swedish firms suggested an impact of motivation on employment growth, and a recent study by Gancarczyk et al (2021) pointed out that SME owner-managers' judgments about growth motives and rationales constrain their choices and how they enable new directions. In the present empirical data, the opposing roles of healthcare professional and entrepreneur (Numerato, Salvatore and Fattore, 2012;von Knorring, Alexanderson & Eliasson, 2014) were clearly apparent in most interviews, and it had impact on the managerial role the healthcare professional was willing to take as entrepreneur.…”