Organizational Growing Pains – The Drawback of Successfully Growing German SMEs? An Exploratory Study on the Emergence of Growth-Related Crises and Potential Mitigation Strategies

Abstract

Small and medium-sized enterprises (SMEs), associated with strong performance and prolonged growth, play a pivotal role for Germany’s economy. Yet, research found that organizational growth is accompanied by challenges, surfacing as organizational growing pains, that risk culminating in growth-related crisis-events. With our study we investigated these pains that constitute a potential drawback for successfully growing German SMEs, aiming at deriving mitigation strategies.
Built on a revised approach to grounded theory, with our exploratory study we followed a social constructionist epistemology. Accordingly, we crafted empirical data covering individual experiences and sensemaking processes by means of ten semi-structured interviews in five German SMEs.
Induced from this data, we developed a process model of growth-related crises. Aligning with previous research, we found that German SMEs face growth-related challenges evidenced by emerging organizational growing pains. We identified factors provoking and sustaining these pains, and derived corresponding mitigation strategies. Specifically, we advocate for a comprehensive crisis management, built on a crisis-as-process view. Hence, we encourage early pre-crisis management by enhancing attentiveness towards subtly emerging growing pains; and proactive post-crisis management by responding more effectively to crisis-events. We further urge for active organizational learning from past crises to facilitate the mitigation of growing pains.
By investigating the underdeveloped topics of growth-related challenges and crisis management in the German SME context, we contribute to organizational development theory, crisis management and SME research. Moreover, we provide practical implications to cope with growing pains by means of holistic crisis management.