Investigating the applicability of the firm life-cycle model to SMEs in the Hungarian ICT sector

This paper investigates the applicability of firm life-cycle theory on SMEs. Companies in the Hungarian ICT sector were surveyed using an established quantitative survey instrument assessing organisational characteristics of firms. Four major points of criticism identified regarding the application of firm life-cycle theory are reflected upon, and the results of the study are cross-referenced with findings of qualitative research investigating the firm lifecycle phenomenon in Hungary. Findings approve of the applicability of life-cycle stages, and show that transitions between stages tend to follow a progressive sequence. Results also indicate stagnation in SMEs, while their decline remains hidden.