Considering the Impact of a Founder’s Own Characteristics on Business Growth Strategy.

Abstract

This paper reports on a research study that considers businesses transitioning through the Initial Public Offering (IPO) stage when share ownership changes from private to public. There are many important considerations that need to be managed at this stage in the development of a business, including ensuring the best leadership team is in place to reassure potential investors that it represents a good investment. Whereas it might be expected that a professional CEO would oversee decision making at this stage, it is often the case that the original entrepreneurial founder of the business retains control. Based upon a review of previous research undertaken, it is clear that the personal characteristics of the founder-CEO have the potential to influence strategic decision-making related to the development of an appropriate business growth strategy. The research also indicates that if the founder-CEO has an output functional background, and/or a high education level, then a research and development growth strategy is more likely, whereas a founder-CEO with a throughput functional background, a lower level of education, and/or well-developed external relationships, is more likely to support a lower-risk growth strategy based upon mergers and acquisitions.