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.
Access provided by Autonomous University of Puebla. Download to read the full chapter text
Chapter PDF
Similar content being viewed by others
References
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)
Davidsson, P., Achtenhagen, L., Naldi, L.: Research on Small Firm Growth: A Review. Paper Presented at the 35th EISB Conference, Barcelona, Spain (2005)
Storey, D.J.: Understanding the Small Business Sector. Routledge, London (1994)
Deschryvere, M.: High growth firms and job creation in Finland. The research Institute of the Finnish Economy, Helsinki (2008)
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)
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)
Birley, S., Westhead, P.: Growth and Performance Contrasts between ‘Types’ of Small Firms. Strategic Management Journal 11(7), 535–557 (1990)
Churchill, N.C., Lewis, V.L.: The five stages of small business growth. Harvard Business Review 61(3), 30–50 (1983)
Scott, M., Bruce, R.: Five Stages of Growth in Small Business. Long Range Planning 20(3), 45–52 (1987)
Moreno, A.M., Casillas, J.C.: Entrepreneurial Orientation and Growth of SMEs: A Causal Model. Entrepreneurship: Theory & Practice 32(3), 507–528 (2008)
Terpstra, D.E., Olson, P.D.: Entrepreneurial Start-up and Growth: A Classification of Problems. Entrepreneurship: Theory & Practice 17(3), 5–19 (1993)
Wiklund, J.: Small Firm Growth and Performance: Entrepreneurship and Beyond. Doctoral Dissertation. Jönköping International Business School, Jönköping (1998)
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)
Richardson, I., Wangenheim, C.G.V.: Guest Editors’ Introduction: Why are Small Software Organizations Different? IEEE Software 24(1), 18–22 (2007)
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)
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)
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)
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)
Laukkanen, S.: Uuden teknologiayrityksen kasvu: toimintatutkimus (The growth of a new technology-based venture: An action-research). TTKK, Tampere (2000)
Salonen, A.: International growth of young technology-based Finnish companies. Finnish Academy of Technology, Helsinki (1995)
Nambisan, S.: Software firm evolution and innovation-orientation. Journal of Engineering and Technology Management 19(2), 141–165 (2002)
Delmar, F., Davidsson, P., Gartner, W.B.: Arriving at the high-growth firm. Journal of Business Venturing 18(2), 189–216 (2003)
Autio, E., Miikkulainen, K., Sihvola, I.: Innovatiiviset kasvuyritykset (Innovative growth ventures) (2007), http://www.tekes.fi/julkaisut/innovatiiviset_kasvuyritykset.pdf
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)
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)
Rönkkö, M., Mutanen, O.: National Software Industry Survey 2008: The Finnish Software Industry in 2007. Helsinki University of Technology, Espoo (2008)
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)
O’Gorman, C.: The sustainability of growth in small- and medium-sized enterprises. International Journal of Entrepreneurial Behaviour & Research 7(2), 60–75 (2001)
Galbraith, J.: The Stages of Growth. Journal of Business Strategy 3(1), 70–79 (1982)
McHugh, P.: Making it Big in Software: A guide to success for software vendors with growth ambitions. Rubic, Tiverton (1999)
Penrose, E.T.: The Theory of the Growth of the Firm. Oxford University Press, Oxford (1959)
Gilbert, B.A., McDougall, P.P., Audretsch, D.B.: New Venture Growth: A Review and Extension. Journal of Management 32(6), 926–950 (2006)
Nambisan, S.: Why Service Businesses Are Not Product Businesses. MIT Sloan Management Review 42(4), 72–80 (2001)
Truffle Capital: Ranking of the top 100 European software vendors (2008)
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)
Ali-Yrkkö, J., Martikainen, O.: The software industry in Finland. The Research Institute of Finnish Economy (2008)
Harju, P.: Kilpailukyvyn tekijät pienissä suomalaisissa ohjelmistoyrityksissä (2008) (The determinants of competitiveness in small Finnish software firms), http://www.tekes.fi/julkaisut/KIBS.pdf
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)
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)
Hirsjärvi, S., Hurme, H.: Tutkimushaastattelu: teemahaastattelun teoria ja käytäntö (The research interview: Theory and practice of thematic interview). Yliopistopaino, Helsinki (2000)
Aronson, J.: A Pragmatic View of Thematic Analysis. The Qualitative Report 2(1) (1994)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2010 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Miettinen, O., Mazhelis, O., Luoma, E. (2010). Managerial Growth Challenges in Small Software Firms: A Multiple-Case Study of Growth-Oriented Enterprises. In: Tyrväinen, P., Jansen, S., Cusumano, M.A. (eds) Software Business. ICSOB 2010. Lecture Notes in Business Information Processing, vol 51. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-13633-7_3
Download citation
DOI: https://doi.org/10.1007/978-3-642-13633-7_3
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-13632-0
Online ISBN: 978-3-642-13633-7
eBook Packages: Computer ScienceComputer Science (R0)