Small-Business Group Formation as an Entrepreneurial Development Model

Based on case study research, we argue that the small-business group is both the outcome and the antecedent of growth. It enables, and helps to realize and manage the growth of entrepreneurial firms. The enabling function consists in increasing reputation, attracting complementary resources that facilitate the exploitation of new opportunities, overcoming overembeddedness, and dealing with coopetition (concurrent cooperative and competitive relationships with another company). The group is also the outcome of realized internationalization and related diversification. Interestingly, for the emergence of the small-business group, just as important as diversification is the integration of activities as well as the separation of closely linked activities. Finally, the small-business group corresponds to an entrepreneurial management style. The main contribution of this article is to link organizational structure to the management and growth of entrepreneurial firms.