Growing Pains and Dynamic Capability : A Pilot Study on Entrepreneurial Firms in China

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Abstract

Although an entrepreneurial boom has spread all over the world, the survival rate for new startups remains low and few of them experience growth. What limits firm growth? In order to address the question, this paper explores the relationship between growth and dynamic capability from the perspectives of organizational lifecycle and dynamic capability theory. A three-year investigation of an entrepreneurial firm identifies three main dilemmas that have hindered growth in the company. Referring to Adizes' (1990) model, this paper argues that the mix of dynamic capabilities should evolve through the organization lifecycle in order to sustain growth. It is also important for a firm to transform individual capabilities into organizational ones in its early stages. Implications for further research are discussed briefly in the conclusion

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