An American Entrepreneur Manages across the Life Cycle

By Lester, Donald L. | Journal of Business and Entrepreneurship, March 2004 | Go to article overview

An American Entrepreneur Manages across the Life Cycle


Lester, Donald L., Journal of Business and Entrepreneurship


ABSTRACT

Entrepreneurship research points to the need for professional mangers as organizations move into a more mature stage of the business life cycle. This paper explores the successful navigation of all phases of the life cycle, excluding decline, by a famous American entrepreneur, Fred Smith. The life cycle history of his company, FedEx, is chronicled, with particular attention given to Smith's personal influence on the organization's transition from one stage to the next. His ability to strategically manage FedEx through a fast-paced, competitive, and turbulent thirty years provides valuable insight for today's entrepreneurs.

INTRODUCTION

The literature on entrepreneurship demonstrates that many founders have management skills that are suitable only for the start-up stage of the organizational life cycle (Boeker & Karichalil, 2002). As firms grow and develop, the founding entrepreneur either loses interest or feels unqualified to administer the larger, more mature organization. The need to focus more closely on managerial tasks, rather than the more exciting quest to make something new a reality, sometimes leads firms to replace founding entrepreneurs with seasoned, professional managers (Hambrick & Crazier, 1985; Willard, Krueger, & Feeser, 1992).

The life cycle literature supports this notion that as organizations move through the progressive stages of the organizational life cycle, different management approaches are necessary for optimal success (Adizes, 1999; Cetro, Covin, Daily, & Dalton, 1992; Greiner, 1972; Hanks, 1990). Research demonstrates that strategically managing the life cycle (Lester & Parnell, 1999; Miller & Friesen, 1984) requires well-rounded managers who can understand the changes an organization needs to enable it to stay competitive at each stage of its development. Examples abound of companies whose entrepreneurial founders left to be replaced by managers who took the firms forward and who were better suited to the management of the firm after startup (Auletta, 1998).

Yet, all evidence to the contrary, some entrepreneurs [true entrepreneurs who create new markets and new customers through new products and services (Drucker, 1985), not people who merely start another new enterprise], manage to remain viable, respected leaders of their companies, long after the start-up stage has passed. This study examines one such American entrepreneur, Fred Smith, whose company, FedEx, created a new business, indeed a new industry, in 1972 with the advent of the overnight air express package delivery concept.

LITERATURE REVIEW

Researchers have posited the concept of an organizational life cycle for decades (Downs, 1967; Greiner, 1972; Miller & Friesen, 1984; Penrose, 1952; Quinn & Cameron, 1983). Organizations progress through various stages of growth and development over the course of their 'lives' (Dodge, Fullerton, & Robbins, 1994; Mintzberg, 1984; Torbert, 1974). Yet, research has demonstrated that this progression need not be evolutionary nor deterministic (Kimberly & Miles, 1980; Lester & Parnell, 1999; Lohdal & Mitchell, 1980; Miller & Friesen, 1984). It is not inevitable that all firms will follow a natural progression from birth to growth to maturity to decline.

A more realistic perspective is that large firms do eventually reach a mature stage of development (Miller & Friesen, 1984), yet smaller organizations that may be decades old never leave the first or second stage of the life cycle (Churchill & Lewis, 1983). This perspective reveals a somewhat more strategic view of the life cycle (Lester & Parnell, 1999) indicating that strategic choice (Child, 1972) plays an important role in organizational development. The life cycle is actually a collective interpretation of the organization's environment based on an assessment by top management. As noted in the literature (Drazin & Kazanjian, 1990; Miller & Friesen, 1984) through proactive strategic choice, organizations can revert back to an earlier stage, remain in one particular stage for a very long time (Miller & Friesen, 1984), or fail to progress past an early stage, regressing to decline or death without experiencing a maturity stage (Churchill & Lewis, 1983). …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

An American Entrepreneur Manages across the Life Cycle
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.