Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm / Edition 3 available in Hardcover
- Pub. Date:
About the Author
Eric G. Flamholtz is a professor of management at the Anderson Graduate School of Management, University of California at Los Angeles. He is president and cofounder of Management Systems Consulting Corporation.
Yvonne Randle is vice president of Management Systems Consulting Corporation, where she has been a consultant since 1983.
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.
CUSTOM PRINTING CORPORATION: AN INTRODUCTION
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.
THE ONSET OF GROWING PAINS
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.
Table of ContentsTables, Figures and Exhibits.
Introduction: The Transitions Needed to Keep a Growing Firm Successful.
A FRAMEWORK FOR DEVELOPING SUCCESSFUL ORGANIZATIONS.
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.
MANAGEMENT STRATEGIES FOR EACH STAGE OF ORGANIZATIONAL GROWTH.
The New Venture And Expansion Stages.
The Professionalizing Stage: Developing Management Systems.
The Consolidation Stage: Managing The Corporate Culture.
MASTERING THE TOOLS OF PROFESSIONAL MANAGEMENT.
Organizational Control Systems.
Corporate Culture Management.
ROLE OF THE ENTREPRENEUR IN A GROWING AND CHANGING COMPANY.
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.
What People are Saying About This
"This book provides a proven framework and a practical approach for dealing with what matters most for the success of any growing organization. I found it comprehensive and compelling."Madhavan Nayar, founder and company leader, Infogix
“Although we already had a culture of pursuing continuous improvement, we lacked a framework for planning to restructure Pardee Homes to take advantage of our talented people, resources, and systems to expand our business into new markets. Utilizing ‘the pyramid’ we have developed a disciplined approach to truly strategic planning (and planning for contingencies), excellence in execution and objective measurement of goals and objectives in every department and in every division.”Michael McGee, CEO, Pardee Homes
“Growing Pains documents the proven system utilized by Flamholtz and Randle to guide numerous companies through the start-up phases to national-level growth. This is not a book of academic platitudes or untested abstractions, but is a practical guide book based on hands-on experiences and demonstrable successes. Because Flamholtz and Randle have developed their perspectives from having worked closely with many companies and management teams, their judgments are solid and their principles can be followed with confidence.”
Henry Cisneros, executive chairman, CityView
“I have had the great fortune to personally witness a multitude of small business owners and nonprofit executives successfully apply the principles taught in this book to transition their organizations toward enduring success. The concepts in this book provide the critical tools and knowledge for any entrepreneur to channel their passion into a concrete strategy that enables them to take their business to the next level. Flamholtz and Randle’s Growing Pains is worth the investment of the most precious of our commoditiestime and intellectual energy!”Helen Han, CEO, National Association of Women Business Owners-LA