Week 45: Barringer and Jones: Achieving Rapid growth Flashcards
What is managerial capacity?
The ability of leadership to manage resources, coordinate activities, and respond to growth demands.
Why is managerial expertise critical for growth?
It is firm-specific, accumulates over time, and enables effective coordination and execution of growth opportunities.
What is the managerial capacity problem?
A bottleneck where a firm’s managerial resources are insufficient to implement new growth opportunities.
What are motivational limits in the context of managerial capacity?
Managers feeling overworked or resisting change, reducing their drive and effectiveness during growth.
What is the Penrose Effect?
The constraint on firm growth caused by the slow development of firm-specific managerial expertise.
What is adverse selection in managerial capacity?
The difficulty of hiring suitable employees quickly during rapid growth, leading to poor hiring decisions.
What is moral hazard in the managerial capacity problem?
New hires lacking ownership incentives, leading to reduced accountability and increased supervision costs.
What is socialization in the managerial capacity problems?
New managers need time to adapt to the firm’s culture and processes
What is the role of entrepreneurial services in growth?
To identify and pursue new growth opportunities.
What is the role of managerial services in growth?
A: To execute strategies, coordinate resources, and sustain operational efficiency.
Q: What happens when growth opportunities exceed managerial resources?
A: The firm faces inefficiencies, poor execution, or failure to capitalize on opportunities.
How can motivational limits among managers be addressed?
A: By offering incentives, support, and training to boost their effectiveness.
What is the solution to adverse selection in rapid hiring?
Using financial incentives and thorough hiring processes to attract and retain suitable employees.
How can firms reduce moral hazard among new hires?
By introducing managerial supervision and aligning incentives with accountability.
What is the key to solving the managerial capacity problem?
Expanding managerial capacity through strategic alliances, investments, and empowerment practices.
