Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm / Edition 3

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From start-up enterprise to mature corporation, this latest edition of the best-selling original explores the seven predictable stages of organizational growth
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Editorial Reviews

From the Publisher
"...whose clear analysis, audit tools and real life case studies make it an invaluable complement [to The Essential Guide to Managing a Small Business]..." (Financial Times, 18 September 2003)
Shows entrepreneurs how to make the transition from a humble start-up to a professionally managed firm without sacrificing the unique spirit that inspired the company in the first place. Provides a framework to evaluate a firm's growth objectively, anticipate problems, and plan strategies, and outlines seven stages of organizational growth, identifying what must be accomplished in each stage to ensure the company's healthy development. Flamholtz teaches management at the University of California-Los Angeles' Anderson Graduate School of Management. Randle is vice president of a consulting firm. Annotation c. Book News, Inc., Portland, OR (
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Product Details

  • ISBN-13: 9780787946944
  • Publisher: Wiley, John & Sons, Incorporated
  • Publication date: 4/28/2000
  • Series: Management Series
  • Edition description: REVISED
  • Edition number: 3
  • Pages: 416
  • Product dimensions: 7.38 (w) x 9.57 (h) x 1.52 (d)

Read an Excerpt


The Transitions Needed to Keep a Growing Firm Successful This introduction presents a case study of an entrepreneurship-a printing company with approximately $10 million in annual revenue-that needed to make a transition to a new stage of growth. The issues that the entrepreneur and the firm faced here are similar to those faced by managers in diverse organizations with revenue ranging from approximately $1 million to substantially more than $1 billion. It has been selected as a prototype of a widespread phenomenon, not one that is limited to certain companies or industries.


Joe McBride began working at Custom Printing Corporation while he was still in high school. He worked hard to learn all that he could about the printing business, since he had decided he wanted a career in this industry. Two years after Joe's graduation from high school, when the original owner of the print shop retired, Joe borrowed money from his parents and bought Custom Printing for $10,000. At that time, the shop employed two persons besides Joe.


It was at about this time, in the early 1990s, that Custom Printing began to experience the typical symptoms of organizational growing pains. Some of these symptoms were more severe than others, but nearly all warranted attention. These symptoms will be discussed in order of severity, ranging from most to least severe.


Joe McBride realized that despite the company's growth in sales, it was in trouble. He had to make changes in the way the company was operating as well as in his own style of running the business. He knew that both he and the firm had to make a transition from the present entrepreneurial style of operation to a more professional style of management.

Phase I: Assess the company's current state of development as an organization and its future development needs.
Phase II: Design a program for the development of the organization as a whole.
Phase III: Implement the organizational development program.
Phase IV: Monitor the program and make changes as needed.

Making the Transition: Phase I

In order to assess the company's current state of development and future needs, an organizational audit was performed by collecting information from the company's employees about their perceptions of Custom Printing and its operations. One tool used in this process was the Organizational Growing Pains Questionnaire described in Chapter Three. The score that was calculated from responses to this questionnaire revealed the severity of the company's organizational growing pains and indicated that it was time to make some changes. Specifically, the audit revealed that the company needed to do the following:

Making the Transition: Phases II and III

Having identified its current needs, Custom Printing proceeded to the next steps in its organizational development program: designing and implementing a program that would meet these needs and help the company prepare for its next stage of development. Management decided that the program should have three parts: organization design, strategic planning, and management development.

Making the Transition: Phase IV

Joe McBride wanted to be sure that the changes brought about by the organizational development program would have a positive impact on his company's performance. He therefore established a system to monitor the program's progress in accomplishing its goals. By monitoring the program, Joe was able to change it whenever he determined that it was no longer successful at meeting its goals or whenever employee resistance to the changes being implemented became too great.


In order to make the transition from an entrepreneurship to a professionally managed firm, a company must first recognize that change is needed and then design and implement a program that will facilitate the required transition.

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Table of Contents

Tables, Figures and Exhibits.
The Authors.
Introduction: The Transitions Needed to Keep a Growing Firm Successful.
How to Build Successful Companies: The Pyramid Of Organizational Development.
Identifying And Surviving The First Four Stages Of Organizational Growth.
Recognizing Growing Pains And Assessing The Need For Change.
The New Venture And Expansion Stages.
The Professionalizing Stage: Developing Management Systems.
The Consolidation Stage: Managing The Corporate Culture.
Strategic Planning.
Organizational Structure.
Management Development.
Organizational Control Systems.
Effective Leadership.
Corporate Culture Management.
Managing The Advanced Stages Of Growth: A Preview Of Future Challenges.
The Transition Ceos Must Make To Survive Beyond The Entrepreneurial Stage.
References: Key Resources For Further Information.
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