Model Behavior and Future Refinement

The basic behavior of the model shows that when an entrepreneur tries to balance all sources of growth dynamics (opportunity tension, exploration-exploitation balance and resource accumulation/depletion), the firm’s growth stabilizes and achieves a certain plateau – and the firm may eventually shrink – due to the depletion of current untapped opportunities. To keep growing, the entrepreneur needs to create imbalance in the system, by acquiring resources and exploring untapped opportunities. Yet, imbalances also involve the risk of creating negative self-reinforcing dynamics, which could lead to firm decline.

Further revision and refinement of the model, as well as analysis of the critical threshold conditions based on the case data, will provide more insights in which combinations of actions and dynamics lead to growth, stability or decline.