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THE MANAGEMENT OF GROWTH IN SMALL INNOVATIVE COMPANIES: THE CASE OF THE SOFTWARE

Mario Raffa
Giuseppe Zollo
Renata Caponi

ODISSEO-DIS, University of Naples "Federico II"
Via Diocleziano 328
80124 Naples (Italy)

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+39-81-5704498

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Principal Topics
Evidence concerning the management of the growth of small software firms are presented. Software firms are knowledge intensive firms and face a competition based on technological innovation. In order to sustain the growth the firms should change their products and update their knowledge. Prevalent growth strategies of a sample of small firms are examined in detail.

Methodology
The study is based on the analysis of a sample of Italian software firms. In the years 1983-87 the authors investigated about 200 software firms located in different areas of Italy. In 1990 a new research was started in order to analyze the software firms' development trajectories and the organization and technology changes experienced by them during the '80s. Fifty firms were investigated as case studies in order to collect both the most accessible quantitative information and to understand, the complex organization problems faced by a small firm introducing innovations. The present paper presents the results of 27 firms' cases developed in the years '93-?4

Major Findings
Ten basic growth strategies are found, leading to different growth paths. The best performers display an oscillating path in the resource allocation between innovative project and market development.

Implications
Usually the small software firms are unable to meet both technological and market needs. How successful firms manage those needs in order to sustain the firm's growth offer several implications on their organizational aspects

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