The Paradox of Growth and Failure: The Typology of SMEs Failure at the Organizational Growth Stage

Document Type : Research Article (with qualitative approaches)


1 Ph.D Student in Commercial policy making, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

2 Commercial Management Department, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

3 Commercial Management Department, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

4 Professor of Industrial Management, Department of Industrial Management, Faculty of Accounting and Management, Shahid Beheshti University, Tehran, Iran.


Objective: SMEs are the bloodstream of modern economies. These types of businesses are very important for governments because of their special nature and characteristics, and because they play an important role in providing the unemployment rate of countries and increasing the economic growth and development of societies. But despite the fact that failures occur in all businesses in different sizes, SMEs are exposed to greater threats. The purpose of this article is to typify the failure of small and medium-sized businesses in the growth phase of the organization, by examining the lived experiences of case studies.
Design / Methodology / Approach: In this research, phenomenological analysis of multiple case studies has been used.
Findings: The results of this typology show the role of organizational failure more than the other two types of individual and environmental failures and show that the predominant type of failure in SMEs located in the growth stage is organizational failure.
Limitations and Consequences: This model can be both a warning and a guide for SMEs and pave the way for crisis prevention and upgrading internal organizational capabilities to prevent organizational failure in the growth phase.
Practical Implications: The typology of failure in the growth phase of the organization can affect the policy direction of support institutions such as industrial estates and science and technology parks to support and properly guide these types of businesses.
Initiative or value of the article: The article adds to managerial research by simultaneously evaluating the types of failures and the life cycle of the organization.
Paper Type: Research Paper


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