Hitting the "wall" : the role of leadership and organizational process in the successful growth of SMEs

Abstract

Rapidly growing companies often start out well, but hit a "wall" as they continue to expand. This wall is partly due to a lack of structure within the organization, but is also due to a lack of leadership and training to build new initiatives or to implement change. This thesis examines two components of the company: the organizational behavior at the company level and the leadership development at the level of individual stakeholders within the company. By examining the organizational structures and leadership teams of successful and failed rapidly-growing companies, this thesis proposes a new organizational developmental model to better understand and predict what makes a growing company successful in getting over the "wall" and to its next phase of development. The first part of the study examines the leadership and organizational needs of small- and mid-sized enterprises (SMEs) at early and midlife stages of development. This thesis then examines leadership and organizational process theory before drawing on developmental psychology to propose a new model to address the stages of growth through which a company passes. Using the proposed developmental model as an analytic framework, two case studies are examined. The model provides insights into the kinds of leadership and organizational structure that are predictive of successful - or unsuccessful - growth in the SME. Lessons for SMEs are suggested, including what a company can do early in its life cycle to prevent it from hitting the wall.