Barriers to growth for potential high growth organizations Essay

Barriers to growth for potential high growth organizations - Essay Example Recklies (2001) enlists several indicators of growth in an organization that include a substantial increase in revenue, subsidiaries, employees, and the organization’s assets. He further adds that growth should be gauged in terms of sustainability, improved value of shares held in the organization, and profitability. There are several barriers and drivers to growth of organizations alike. The following discussion focuses on some of the major growth drivers and the main barriers to growth in relation to high growth enterprises. Drivers to Growth To begin with, drivers to growth are those factors that enhance rapid growth in organizations. They may include the following: Proper Financing A high growth organization is boosted a lot by good finances. This can be in terms of availability, sufficiency, and the rate of interest; otherwise referred to as the costs of financing. When there are cheaper sources of financing that are available to the organization, the organization is able to invest in ventures easily and with speed to be able to take advantage of any opportunity that brings more return to the organization. ... For instance, the government may decide to restrict importation of commodities related to a particular industry to help growth in that industry. The result is that a first growing organization in that industry will have a favorable environment of expansion in terms of capacity because of the ready market for its product and reduced completion from substitute products. This will in turn add onto its revenue, which can then also be ploughed back to certain agreed proportions despite increasing the value of shares held by its owners. A Larger Unexploited Market Segment or Market Share A larger market indicates a larger proportion of potential customers to the organization. In cases where the organization still has some sort of a large catchment area of customers that have the potential of being the company’s buyers, growth is favored than in a closed market where every consumer has already identified with a brand. The motivation of reaching to the untapped market is massive and, therefore, leads to growth because as the organization reaches out to more and more consumers, and there is an additional turnover or growth in sales that ensures that revenue is boosted. Arrival of new customers in a totally new segment adds onto the profits eventually; hence, it provokes a rapid growth to the organization. Good Information Management Structure Information flow is very essential to any organization. An organization with an effective and efficient management system for information flow; therefore, it is likely to grow at a faster rate (Stalk et al 1992). This is because organizations are likely to have complex structures at every level that also involves