Investigating sustainable strategies for turning around 'stunted growth' businesses

Within the range of small companies, and especially micro-firms, there is a group that have survived through many years, maybe many generations, providing their owners with acceptable returns and lifestyles, but have remained very small despite them having significant growth potential. This phenomenon is recognised in the literature as the 'dwarf ' or 'stunted' small firm (in Italian nanismo aziendale ). The ability of such firms to break out from this situation varies according to external opportunities, but especially with regard to internal strategic resources and the attributes of the owner-entrepreneurs. Previous work by the authors has used case study evidence to characterise different firms and has then presented qualitative analysis to provide some initial ideas in how such firms could break out from this condition. This earlier work lead to the conclusion that a business simulator could be of significant value in investigating the change process, and a preliminary model was posited. The work described in this paper builds from that earlier work by presenting a fully developed insight model. This model includes a more extensive representation of critical strategy assets, reflects the base dynamics (or 'reference behaviour mode') expected of stunted firms, and then examines a wide range of scenarios representing different constraints and opportunities for entrepreneurs to change their firms into ones that could achieve long-term sustainable growth.