Advantages and Disadvantages That Large Firms over Small Firms

1341 Words Dec 5th, 2011 6 Pages
Enterprise Essay
CB 613
Number of words: 1202

a) Explain the advantages and disadvantages that large firms have over smaller firms and vice-versa, in the pursuit of entrepreneurial activity.

As an enterprise can be defined as private business, it can thus be separated into two main categories which are small firms and large firms. Within many countries and many industries there are normally a large number of small firms and a smaller number of large firms as can be seen in the United Kingdom where there are only a few thousand large firms and over 4 500 000 small to medium sized firms according to the BERR. This essay will look at both of these categories of firms and will provide information on the factors which set them apart
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Entrepreneurial culture is a big part of any company as not only does it represent the company’s values along with the values of the founder, but it will also provide a framework as to how the company will be run in the future. This however can change over the course of time which can have very negative effects on the company such as decreased efficiency and performance along with a loss of customers. This essay will look at what is entrepreneurial culture and how it be retained or regained throughout a firm’s existence.

Enterprise can be defined as either a private business or the readiness to engage in undertakings of difficulty risk or danger. In other words, enterprise can represent the daring spirit of an individual (Abercrombie & Keat, 1999). Inevitably the culture of any venture is influenced, if not created, by this individual who imprints their value on to it. Hence, if founded by a true entrepreneur, the culture of a new venture might be expected to be entrepreneurial. However, the culture of any organization is also determined by the organization’s structure by the means through which the founder delegates authority and divides up responsibilities. It can be concluded that there are cultures that encourage and reward innovation and initiative, and those who discourage it. (Kirby, 2003)

At IBM, the culture of the firm not only led to the belief that mainframe
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