How to organize companies to prepare for growth while maintaining the ability to be innovative

Abstract: It is important for organizations to enforce corporate entrepreneurship in order to enable innovation and growth which can lead to more job opportunities and economic growth. Enforcing corporate entrepreneurship during growth is difficult and much of the current research contradicts each other by saying that growth is handled by formalizing and structuring while corporate entrepreneurship is enforced by having a simple and loose organization. This research aims to explore how a company can organize to prepare for growth while maintaining the ability to be innovative. An illustrative case study is conducted where a small company which is expecting growth in a rapidly changing industry is examined through interviews. The theory was thoroughly investigated and five central factors of entrepreneurial orientation (autonomy, proactiveness, innovativeness, risk-taking, competitive aggressiveness) were cross examined with five central challenges that appear during growth (differentiation, heterogeneity, external complexity, internal change, internal turmoil). A framework is proposed which contains identified dilemmas of remaining entrepreneurial during growth and suggested guidelines of how to organize a firm to meet these challenges. The organizational structure is identified as one of the most important aspects which influence the entrepreneurial abilities of a firm and therefore the proposed guidelines are based on the central factors of organizational structure from the theory (formalization, centralization, complexity). The results point to formalizing rules and procedures, decentralizing some of the decision making and enforcing good integration in a low complexity (internal) environment in order to enable autonomy and proactiveness which allows the company to be innovative, even as internal and external changes are taking place. Future research is suggested for exploring the impact of the suggested guidelines and there is a possibility in elaborating the guidelines for other aspects of an organization than the structure.