“MANAGING THE GROWING FIRM” : LINKAGES FOR MARKET STRATEGY

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JP-pic 2Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, Distinguished Visiting Fellow at the Institute of Advanced Studies in the Humanities, University of Edinburgh, Scotland, publisher of www.GavdosPress.com.  Founder and former CEO, JPIndusries, Inc., a Fortune 500 industrial corporation

The linkages listed in this segment and following segments on this topic to be posted in separate categories are based on my experience as senior executive as well as an entrepreneur on managing growth businesses. Because statistical techniques test for probabilities but not certainties, the wordings are stated in terms of likelihoods. Discussions of these linkages are to be presented in future articles. Other executives and entrepreneurs could come to different conclusions compared to those listed in the segments posted. Therefore, those that read my views should take them as the experience of one person and use their judgment as to whether these linkages are to be taken as stated in their case.

LINKAGES FOR MARKET STRATEGY

Linkage -1:  More effective work assignments and work coordination links to growth rates, steadier growth, and a more effective direction-setting strategy.

Linkage -2:  Neither relative- or absolute-sales size links to work flow effectiveness.

Linkage -3:  The firm’s ability to obtain managers and capital links to greater sales.

Linkage -4:  The better a firm is able to obtain supplies, the smaller sales are likely to be.

Linkage -6:  The better able a firm is to recruit and to obtain capital, the faster the rate of growth and the more effective the direction-setting strategy are likely to be.

Linkage -6:  Steadier sales growth and a common sense of mission link to effective value-sharing strategy.

Linkage -7:  Faster growth is linked to a more effective value-sharing strategy.

Linkage -8:  Faster growth links to employee goal integration (lagged).

Linkage -9:  Steadier growth, faster growth, and a more effective direction-setting strategy link to better community image and reputation.

Linkage -10:  Steadier growth links to quality of product or service, better productivity, and a better skill level.

Linkage -11:  Faster growth links to better product or service quality and better employee technical skills.

Linkage -12:  Firms whose primary mission is to expand market share are likely to be more profitable.

Linkage -13:  Firms whose primary mission is quality are likely to be more profitable.

Linkage -14:  Firms whose CEOs emphasize product or service uniqueness are likely to report higher profits.

Linkage -15:  Among “mini-firms” (10-20 employees), those offering a full range of services are likely to be less profitable.

Linkage -16:  Among “medium-sized firms” (20-80 employees), those with diversification as a primary goal tend to be less profitable.  But in the largest firms (above 80 employees), the pattern is reversed.

Linkage -17:  Intense competition, with respect to both customers and technical know-how, links to a poor rating of direction-setting strategy.

Linkage -18:  Firms that serve customers demanding quality tend to rate their direction-setting strategy more highly.

Linkage -19:  In “micro-firms” (10-20 employees), the more customers expect discount prices– even if it means lower quality–the slower the growth rate is also likely to be and the less profitable the firm is likely to be.

Linkage -20:  In firms of 80 to 500 employees, the more customers expect discount prices–even if it means lower quality

–the more profitable the firm is likely to be.

Linkage -21:  Companies that select or design products and services and/or set direction anticipatively tend to report less steady growth, a poorer rating of direction-setting strategy, and lower profits.

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