The Emergence and Survival of High-Technology Ventures in Europe
Edited by Jan Ulijn, Dominique Drillon and Frank Lasch
Chapter 10: Making the Transition from Entrepreneurial to Professional Management in Small and Medium-sized ICT Businesses in Slovenia and Germany
Janez Pras nikar, Karl-Heinz Rau, ˇ Marko Pahor and Monika Klinar INTRODUCTION Organizational growth and development models oﬀer a useful framework for assessing and analysing the growth of a company and the connected management imperatives. Several models have been postulated, ranging from three to 10 stages (Churchill and Lewis, 1983: 31; Scott and Bruce, 1987: 47; Greiner, 1998: 58; Adizes, 1999: 88), with most models identifying ﬁve stages. While the models are distinct in the number of phases and their clariﬁcation, most of them propose that in the life cycle of organizations the transition from an entrepreneurially to a professionally managed organization may be necessary. There are many reasons for this. As Olson and Terpstraand (1992: 27) and Flamholtz and Randle (2000: 10) explained, when an organization reaches a certain size, its resources become stretched and an insatiable need for more funding arises, while operating systems are overwhelmed by the sudden surge of activity. The same applies to the entrepreneur, who will spend more and more time on administrative work and everyday activities, which has implications for the time spent on strategic issues (Barth and Hörte, 1999: 3). Roberts (1999: 389) noticed that, due to the increasing size of the organization, the entrepreneur will be unable to supervise the eﬀorts of the workers. Finally, circumstances such as when the management is not developing, and the founder maintains close relationships with key customers, suppliers and loyal personnel instead of transferring skills to other people, create bottlenecks in operations...
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