Company Growth or Business Growth? Creating Business Groups as a Growth Strategy for Entrepreneurs
Keywords:
Company growth, business growth, entrepreneurial expansion, business groups, strategic management, competitive advantage, risk mitigation, diversification, synergy, entrepreneurshipAbstract
This study compares the advantages of business group expansion—a growth strategy that entails the formation of new organizational entities—to conventional firm growth. We claim that by developing a formal model, business group founders embrace a flexible expansion strategy that allows them to modularize the issue of managing a large organization. Business owners construct a number of autonomous but smaller business organizations by doing so. As a result, the lessened dependency among the units lessens the negative implications that a problem in one unit can have on the others. This organizational structure can help entrepreneurs gain access to outside resources while decreasing the risk of bringing partners into their business. As a result, these additional resources can help a company expand more swiftly. To test our hypothesis, we employ a unique longitudinal dataset with a sample size of over 3500 firms. The study's uniqueness stems from its emphasis on the individual entrepreneur, rather than the organization, as the key analytical unit for business success. This enables us to document and investigate the development and design of business groups for the aim of business expansion in entrepreneurial activities.
Keywords- Business Growth, Creating Business, Growth Strategy
