ORGANIZING FOR DEVELOPMENT IN THE SMALL BUSINESS

Small business development is analysed in terms of transition phases that link phases of comparative stability. Enterprises founded as owner-operated businesses may evolve into a functionally organized entity; if so, they move through two distinct transition phases. These transitional phases lie between the owner-operated and an owner-managed organization, and between the owner-managed and a more complex organization guided by functional managers. Each of the five phases is marked by particular characteristics, and calls for a phase-specific blend of entrepreneurial and management activities. The framework recognizes that not all small enterprises pass through all five phases; there are firms that start in a more evolved phase, and there are many that remain within a particular phase, either by design or by virtue of barriers to further development.