Advertisement

Managerial Growth Challenges in Small Software Firms: A Multiple-Case Study of Growth-Oriented Enterprises

  • Oskari Miettinen
  • Oleksiy Mazhelis
  • Eetu Luoma
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 51)

Abstract

Notwithstanding the importance of small software firms, research focusing on understanding the growth challenges faced by their management is close to non-existent. By taking a life-cycle approach and focusing on managerial challenges, the aim of this paper is to analyze the growth process of small software firms. After forming a synthesis of possible growth challenges from relevant literature, the results are reflected upon case software firms using thematic interviews and questionnaires. According to the analysis of four software firms, managing human resources represents the greatest challenge for software services firms. Additionally, other challenges stem from competition and sales-related activities. Comparative analysis of the literature and the cases leads toward a theoretical conceptualization of growth challenges from small software firm’s perspective.

Keywords

small firms software business growth of a firm life-cycle model growth challenges 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Hoch, D.J., Roeding, C.R., Purkert, G., Kindert, S.K., Muller, R.: Secrets of Software Success: Management Insights from 100 Software Firms Around the World. Harvard Business School Press, Boston (2000)Google Scholar
  2. 2.
    Davidsson, P., Achtenhagen, L., Naldi, L.: Research on Small Firm Growth: A Review. Paper Presented at the 35th EISB Conference, Barcelona, Spain (2005)Google Scholar
  3. 3.
    Storey, D.J.: Understanding the Small Business Sector. Routledge, London (1994)Google Scholar
  4. 4.
    Deschryvere, M.: High growth firms and job creation in Finland. The research Institute of the Finnish Economy, Helsinki (2008)Google Scholar
  5. 5.
    Tyrväinen, P., Warsta, J., Seppänen, V.: Evolution of Secondary Software Businesses: Understanding Industry Dynamics. In: León, G., Bernardos, A.M., Casar, J.R., Kautz, K., DeGross, J.I. (eds.) Open IT-Based Innovation: Moving Towards Cooperative IT Transfer and Knowledge Diffusion. International Federation for Information Processing, pp. 381–401. Springer, Boston (2008)Google Scholar
  6. 6.
    Cusumano, M.A.: The Business of Software: What Every Manager, Programmer and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad. Free Press, New York (2004)Google Scholar
  7. 7.
    Birley, S., Westhead, P.: Growth and Performance Contrasts between ‘Types’ of Small Firms. Strategic Management Journal 11(7), 535–557 (1990)CrossRefGoogle Scholar
  8. 8.
    Churchill, N.C., Lewis, V.L.: The five stages of small business growth. Harvard Business Review 61(3), 30–50 (1983)Google Scholar
  9. 9.
    Scott, M., Bruce, R.: Five Stages of Growth in Small Business. Long Range Planning 20(3), 45–52 (1987)CrossRefGoogle Scholar
  10. 10.
    Moreno, A.M., Casillas, J.C.: Entrepreneurial Orientation and Growth of SMEs: A Causal Model. Entrepreneurship: Theory & Practice 32(3), 507–528 (2008)CrossRefGoogle Scholar
  11. 11.
    Terpstra, D.E., Olson, P.D.: Entrepreneurial Start-up and Growth: A Classification of Problems. Entrepreneurship: Theory & Practice 17(3), 5–19 (1993)Google Scholar
  12. 12.
    Wiklund, J.: Small Firm Growth and Performance: Entrepreneurship and Beyond. Doctoral Dissertation. Jönköping International Business School, Jönköping (1998)Google Scholar
  13. 13.
    Wiklund, J., Shepherd, D.: Knowledge-based resources, entrepreneurial orientation and the performance of small and medium-sized businesses. Strategic Management Journal 24(13), 1307–1314 (2003)CrossRefGoogle Scholar
  14. 14.
    Richardson, I., Wangenheim, C.G.V.: Guest Editors’ Introduction: Why are Small Software Organizations Different? IEEE Software 24(1), 18–22 (2007)CrossRefGoogle Scholar
  15. 15.
    Yli-Renko, H., Autio, E.: The Network Embeddedness of New, Technology-Based Firms: Developing A Systemic Evolution Model. Small Business Economics 11(3), 253–267 (1998)CrossRefGoogle Scholar
  16. 16.
    Hanks, S.H., Watson, C.J., Jansen, E., Chandler, G.N.: Tightening the Life-Cycle Construct: A Taxonomic Study of Growth Stage Configurations in High-Technology Organizations. Entrepreneurship: Theory & Practice 18(2), 5–30 (1993)Google Scholar
  17. 17.
    Kazanjian, R.K., Drazin, R.: A stage-contingent model of design and growth for technology based new ventures. Journal of Business Venturing 5(3), 137–150 (1990)CrossRefGoogle Scholar
  18. 18.
    Kazanjian, R.K.: Relation of Dominant Problems to Stages of Growth in Technology-Based New Ventures. The Academy of Management Journal 31(2), 257–279 (1988)CrossRefGoogle Scholar
  19. 19.
    Laukkanen, S.: Uuden teknologiayrityksen kasvu: toimintatutkimus (The growth of a new technology-based venture: An action-research). TTKK, Tampere (2000)Google Scholar
  20. 20.
    Salonen, A.: International growth of young technology-based Finnish companies. Finnish Academy of Technology, Helsinki (1995)Google Scholar
  21. 21.
    Nambisan, S.: Software firm evolution and innovation-orientation. Journal of Engineering and Technology Management 19(2), 141–165 (2002)CrossRefGoogle Scholar
  22. 22.
    Delmar, F., Davidsson, P., Gartner, W.B.: Arriving at the high-growth firm. Journal of Business Venturing 18(2), 189–216 (2003)CrossRefGoogle Scholar
  23. 23.
    Autio, E., Miikkulainen, K., Sihvola, I.: Innovatiiviset kasvuyritykset (Innovative growth ventures) (2007), http://www.tekes.fi/julkaisut/innovatiiviset_kasvuyritykset.pdf
  24. 24.
    Davidsson, P., Wiklund, J.: Levels of Analysis in Entrepreneurship Research: Current Research Practice and Suggestions for the Future. Entrepreneurship: Theory & Practice 25(4), 81–100 (2001)Google Scholar
  25. 25.
    Mutanen, O., Rönkkö, M.: Growth Challenges of Small Finnish Software Firms - Comparing Theory and Practice. Paper Presented at the EBRF Conference, Helsinki and Stockholm, Finland and Sweden (2008)Google Scholar
  26. 26.
    Rönkkö, M., Mutanen, O.: National Software Industry Survey 2008: The Finnish Software Industry in 2007. Helsinki University of Technology, Espoo (2008)Google Scholar
  27. 27.
    O’Farrell, P.N., Hitchens, D.M.W.N.: Alternative theories of small-firm growth: a critical review. Environment and Planning A 20(10), 1365–1383 (1988)CrossRefGoogle Scholar
  28. 28.
    O’Gorman, C.: The sustainability of growth in small- and medium-sized enterprises. International Journal of Entrepreneurial Behaviour & Research 7(2), 60–75 (2001)CrossRefGoogle Scholar
  29. 29.
    Galbraith, J.: The Stages of Growth. Journal of Business Strategy 3(1), 70–79 (1982)CrossRefMathSciNetGoogle Scholar
  30. 30.
    McHugh, P.: Making it Big in Software: A guide to success for software vendors with growth ambitions. Rubic, Tiverton (1999)Google Scholar
  31. 31.
    Penrose, E.T.: The Theory of the Growth of the Firm. Oxford University Press, Oxford (1959)Google Scholar
  32. 32.
    Gilbert, B.A., McDougall, P.P., Audretsch, D.B.: New Venture Growth: A Review and Extension. Journal of Management 32(6), 926–950 (2006)CrossRefGoogle Scholar
  33. 33.
    Nambisan, S.: Why Service Businesses Are Not Product Businesses. MIT Sloan Management Review 42(4), 72–80 (2001)MathSciNetGoogle Scholar
  34. 34.
    Truffle Capital: Ranking of the top 100 European software vendors (2008)Google Scholar
  35. 35.
    Kontio, R.M., Mutanen, O., Ahokas, M., Junna, O., Ali-Yrkkö, J., Touru, A.: Kasvufoorumi 08 loppuraportti (Growth Forum 08 Final Report). The Finnish Software Entrepreneurs Association and Microsoft (2008)Google Scholar
  36. 36.
    Ali-Yrkkö, J., Martikainen, O.: The software industry in Finland. The Research Institute of Finnish Economy (2008)Google Scholar
  37. 37.
    Harju, P.: Kilpailukyvyn tekijät pienissä suomalaisissa ohjelmistoyrityksissä (2008) (The determinants of competitiveness in small Finnish software firms), http://www.tekes.fi/julkaisut/KIBS.pdf
  38. 38.
    Alajoutsijärvi, K., Mannermaa, K., Tikkanen, H.: Customer relationships and the small software firm: A framework for understanding challenges faced in marketing. Information & Management 37(3), 153–159 (2000)CrossRefGoogle Scholar
  39. 39.
    Wiklund, J., Davidsson, P., Delmar, F.: What Do They Think and Feel about Growth? An Expectancy-Value Approach to Small Business Managers’ Attitudes Toward Growth. Entrepreneurship Theory and Practice 27(3), 247–270 (2003)CrossRefGoogle Scholar
  40. 40.
    Hirsjärvi, S., Hurme, H.: Tutkimushaastattelu: teemahaastattelun teoria ja käytäntö (The research interview: Theory and practice of thematic interview). Yliopistopaino, Helsinki (2000)Google Scholar
  41. 41.
    Aronson, J.: A Pragmatic View of Thematic Analysis. The Qualitative Report 2(1) (1994)Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2010

Authors and Affiliations

  • Oskari Miettinen
    • 1
  • Oleksiy Mazhelis
    • 1
  • Eetu Luoma
    • 1
  1. 1.Department of CS and ISUniversity of JyväskyläJyväskyläFinland

Personalised recommendations