Entrepreneurial Obstacles to Growth

A motivating feature for a founding entrepreneur is to establish a
hierarchy based on his own valuations and ideas regarding the business model
and what management is and how it should be realised. Quite often the entrepreneur’s background and experience has a determining function in this process concerning the initial business strategy. Subsequently there are organisational forces which make the chosen strategy difficult to change. At the same time the structure and processes of a hierarchy are products of the surrounding environment in the form of general cultural as well as business-specific institutions at the time of establishment. Academic and practical ambiguousness concerning the possibilities of changing the strategy in a hierarchy to encompass external changes has caused an ongoing debate about organisational inertia. In case of increasing global involvement, however, the entity has to adapt to environmental changes and variation, and the imprinting effects of the founder’s experience fade. In this paper the importance of learning and organisational participation are presented as part of a solution to the challenge of organisational inertia in case of increased international involvement. According to this argument, firms in a volatile environment develop their own experience, which then diminishes the effect of congenital learning stemming from the founder’s background. Entrepreneurs with comprehensive international experience are aware of this and thus able to identify more opportunities in international markets than those without their level of experience.