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(1994) are particularly useful in this respect. Relevant findings of these and some other recent studies are reviewed in the following two sections of the paper. Much of this research has the added attraction of being well grounded in strategic management thought. Thus, strategic management perspectives on growth in SMEs are not entirely disregarded.

3. Stage Models of SME Growth

As indicated earlier, it has become very common amongst writers in the area to view SME growth as a series of phases or stages of development through which the business may pass in an enterprise life-cycle. Having its origins in the literature of economics (Marshall, 1890; Penrose, 1952, 1959; Rostow, 1960), reliance on this paradigm in the SME literature is most frequently claimed to date back to Steinmetz (1969). In an often cited book of readings on the organisational life-cycle, Kimberly & Miles (1980, p. ix) draw attention to:

. . . the cyclical quality of organizational existence. Organizations are born, grow, and decline. Sometimes they reawaken, and sometimes they disappear.

This quotation invokes a biological metaphor for business organisations which has been the source of much controversy in the literature of economics, business and sociology (Penrose, 1952; Kimberly & Miles, 1980).

A number of published reviews were found in the literature which focus specifically on explanations of SME growth based on life-cycle stages through which growing businesses might typically pass. These extend the coverage provided in the general reviews on business growth already identified. D’Amboise & Muldowney (1988) is a widely cited overview of management theory for SMEs which includes consideration of stage models of growth. In addition, there are reviews – some of which form introductions to reports on empirical research in the area – by Perry (1982), Quinn & Cameron (1983), Miller & Friesen (1984a), Smith et al. (1985), Kazanjian (1988), Kazanjian & Drazin (1989), Hanks (1990a, 1990b), Kazanjian & Drazin (1990), Hanks et al. (1991), Dodge & Robbins (1992), Hanks & Chandler (1992), Hanks et al. (1993), Terpstra & Olson (1993), Dodge et al. (1994) and Hanks & Chandler (1994). Together, these reviews consider all the best known attempts to develop, mostly inductively but sometimes deductively, life-cycle or stage models of SME growth. Not all of the reviews are fully supportive of this explanatory paradigm. Nevertheless, as already suggested, the growth and life-cycle stages framework has a substantial pedigree in the literature of economics and business generally, and in the literature focused specifically on SME development.

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