Management Simulation as an Instrument to Aid Turning Stunted Growth Round in Family Businesses

This paper is the fourth in a series which has described the role and construction of simulation models and a Management Flight Simulator that could aid the entrepreneur-owners of so-called dwarf or stunted growth small firms to break out from the constraints holding them back. While the research presented to date has highlighted the issues in such companies, and has suggested that in many situations relatively simple changes only might be needed to unleash the growth potential of such firms, effecting such changes is not likely to be that simple in real life. It has to be possible for affected owner-entrepreneurs to understand a number of factors: that there is a problem (or opportunity), that there are real constraints on growth and how they have arisen, that simple changes might offer solutions, and that real benefits might ensue.

This paper describes first field trials with the simulator. It describes interviews and trials with small firm owner-entrepreneurs to confirm that the simulator concept is generally acceptable, and that the simulations are life-like enough for entrepreneurs to be influenced by their outcomes. Early results suggest that the simulator does give a realistic picture of the possible transition between a presently constricted firm and one able to fulfil its growth potential. In this role it aids understanding of the reasons for business dwarfism and the kinds of change owner-entrepreneurs might have to make, and presents enlightening outlooks with the possible timepaths, or trajectories, of key performance measures. By demonstrating that growth objectives might be feasible, the simulator should stimulate and encourage an owner-manager, perhaps alongside other family/company stakeholders, to take a more detailed look at the practical options in their own firms case.

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