Characterising High Growth Firms: Perspectives from the Asia-Pacific Region
Degree GrantorUniversity of Canterbury
Degree NameDoctor of Philosophy
This study advances understanding of the complexity of high growth in technology-based businesses. The study builds on conceptual and applied insights on business growth from the entrepreneurship and strategic management literatures. This thesis uses both qualitative and quantitative methods to develop and then test a model of the performance of high-growth firms. The qualitative study involved case studies of high-growth firms in Malaysia and New Zealand and led to a conceptual model of their performance. This model was then estimated using original data gathered from a questionnaire survey of a cross-section of high-growth and non-high-growth firms. The model was estimated separately on samples of high-growth and non-high-growth firms and, as expected, it proved a much stronger explanation of the performance of the high-growth sample. Hence the thesis provides important new insights into this small but important group of firms. Sixteen high-growth firms, selected in equal number from Malaysia and New Zealand, agreed to be case studies in the initial phase of the research. Interviews with the CEO/owners and other evidence from these firms led to a conceptual framework of their high-growth experience. This framework highlighted the importance of supportive government policies; internal human resources; external relationships/networks; and the ability of management to dynamically manipulate these resources. Further, the high-growth strategies: product innovation, market expansion, remaining-in-private-ownership and strategy flexibility were underpinned by five main capabilities: innovation, financial, human, marketing and organisational. Challenges from both internal and external environments also influenced growth performance. This conceptual framework was the source of a number of hypotheses that were then tested using a statistically valid sample of firms. A survey was conducted on technology-based firms in the two countries. A total of 163 responses were collected from key decision makers in these firms. The empirical results showed different impacts of the dimensions mentioned in performance in the two countries. Due to limited responses in Malaysia (n=53), conclusions could only be made based on the New Zealand context (n=110). Product innovation was found to be a major strategy for ix all technology-based firms regardless of their performance. However, the results suggest that growth challenges have greater influence on high-growth firms than on firms with lower growth. The model has significantly higher statistical power when applied to a sample of high-growth firms, confirming differences between the two groups. This thesis has significant theoretical and practical implications. From a theoretical viewpoint, this study provides detailed evaluation on the growth determinants from a process perspective. All the resources identified in the qualitative study influenced some of the capabilities, and the innovation, marketing and human capabilities each had significant relationships with the growth strategies implemented. The performance of technology-based firms was influenced by three major strategies: market expansion, product innovation and remaining-in-private-ownership, and also by two growth challenges: financial barriers and external environment effects. The results also indicate that success of the market expansion strategy is tied to product innovation strategy, while remaining-in-private-ownership is positively related to performance. As such, technology-based firms should give priority to product innovation strategy in pursuing better performance. From a practical viewpoint, these findings indicate that the competitiveness of technology-based firms can be enhanced by working closely with key stakeholders who provide growth resources, and developing critical capabilities to assist the right strategies for better performance.