External Factors in the Organizational Life Cycle

When considering the OLC we cannot ignore the factors external to the organization which will assist or impede its growth and development prospects. This is particularly so in biotechnology given that the majority of companies are quite small and therefore have very little control over the environment in which they operate. We will go into more depth on the external environment in future chapters, however those external factors, which influence the OLC, will be explored briefly here. Some of the major findings in terms of the OLC are provided in the chronological list below:

• Churchill and Lewis (1983, pp. 40-2) provide a model which describes the stages as well as the factors 'which change in importance as the business grows and develops'. The model has five stages - existence, survival, success, take-offand resource maturity. The success stage has two sub-stages, disengagement and growth. There is no necessary precondition of growth-or-fail. They found eight general factors that change in importance through the life cycle, four of which 'relate to the enterprise, and four to the owner'. Enterprise factors include: financial resources, personnel resources, systems resources, business resources. Owner factors include: owner's goals, owner's operational abilities, owner's managerial ability, owner's strategic abilities.

• For Chell (1996), external environment for small enterprise consists of 'situations' which provide 'rules' that guide behaviour.

• Bird (1989, p. 138) also proposes general environmental factor categories (societal context variables) which include: '(1) economic, (2) political, and (3) technical "givens" of any moment of time in any location, (4) the Zeitgeist or spirit of the times, and (5) the cultural milieu'.

• Jeffress (1991, p. 13) describes entrepreneurship (the entrepreneur is defined as an initiator and agent of change) as a scarce resource that can be frustrated by social, economic and political factors. Love and Ashcroft (1999) similarly suggests a number of general categories of factors, cultural, social, political, administrative, legal, and economic, that predispose an individual towards entrepreneurship, or if absent can reduce/eliminate the possibility of entry into entrepreneurship.

• Dodge and Robbins (1992, p. 33) confirmed 'that the owner-manager has to contend with different problems in the various stages of the organisation's life cycle. Seemingly, external environmental problems are more important early in the life cycle, with internal problems becoming more critical as the business grows and develops'. They propose four stages by which to categorize small enterprise owner-managers in the context of OLC theory: formation, early growth, later growth, and stability.

• Specht (1993) suggests general categories of factors, namely, social, economic, political, infrastructure development and market emergence, by which specific factors can be grouped. For example, the economic category includes capital availability, aggregate economic indicators, recession and unemployment.

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