Entrepreneurial Growth and Ownership under Market Socialism in China: A Longitudinal Case Study of Small Business Growth

Abstract

How firms grow is still a mystery and a definitive explanation remains elusive. This is especially the case for emerging economies, where the development of research into business growth has been notably slow whilst emerging business ventures are developing at hyper speed. Since most empirical studies have focused on the quantitative differences in growth across firms, this paper adopts a longitudinal case study approach to explore the qualitative differences in terms of how various types of firm achieve their growth outcomes in the organisational development process over a prolonged period of time. Through a theoretical lens which focuses on growth process approaches, this study not only demonstrates that entrepreneurial processes take different forms and dimensions in different contexts, but it also provides insight into the interactions of various organisational factors underpinning the strategies and changes that lead to contrasting growth outcomes. Case study findings assert that the ownership factor is a key contingent factor that shapes management structure and resources which, in turn, affect particular entrepreneurial outcomes. Furthermore, a combination of leadership style and the approach to knowledge management also play critical roles in the learning process which tends to determine the strategy choice of either high or low value added product strategy. The findings of this research are that small firms with a low value product strategy can improve their survival chances and growth through the vertical broadening of a product portfolio in synchrony with increasing production and technology advancement. The case study companies show a tendency to reinforce their industry position by adopting contrasting choices for growth. The paper addresses the challenges and managerial implications for Western company managers in different growth contexts.