Explain the four types of entrepreneurs and firm growth.

Question

What will be an ideal response?

Answer 1

Actual Growth of the Firm Entrepreneurs in the upper-right quadrant possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses. These are the entrepreneurs who are the most likely to achieve firm growth.

Unused Potential for Growth Entrepreneurs in the upper-left quadrant possess the necessary abilities for transition but do not aspire to do so. These are the entrepreneurs of firms that have unused potential. A relatively large proportion of all lifestyle firms are represented by this classification.

Constrained Growth Entrepreneurs in the lower-right quadrant aspire to grow their businesses but do not possess sufficient abilities to successfully satisfy this aspiration. These entrepreneurs are most likely to be frustrated by the firm's lack of growth and are in the most danger of failure because the firm may be pushed toward the pursuit of growth opportunities and beyond the entrepreneur's ability to cope.

Little Potential for Firm Growth Entrepreneurs in the lower-left quadrant possess neither the necessary abilities to make the transition to a more professional management approach nor the aspirations to grow their businesses. These businesses have little potential for growth, and due to the limited abilities of the entrepreneur to manage growth, these firms may actually perform better if they remain at a smaller scale.