Stunted Growth’ in Small Firms: How to Turn Them Round and Unleash Their Potential

The phenomenon of ‘dwarf’ or ‘stunted’ small and micro firms (in Italian nanismo aziendale) is recognised in the small business literature. These are firms that have survived through many years, maybe many generations, providing their owners with acceptable returns and lifestyles, but have remained very small. They might therefore represent potential lost opportunities for owners and, given the importance of the SME sector, local employment and economies. A system dynamics model replicating the basic no-growth, cyclical behaviour attributed to “stunted” SMEs is firstly analysed. Alternative policies arising from different entrepreneurial views and aimed at changing behaviour to one of stability or steady growth, are then tested and analysed. In this relatively simple form, the model does link behaviours to system structure and could support individual entrepreneurs in understanding the reasons for dwarfism in their firm and the potential for unleashing growth. It could also form the basis for a more detailed model to support the identification and evaluation of strategic alternatives in individual firms.

Paper presentato: International System Dynamics Conference 2005 – July 17 – 21, 2005 – Boston


2005_ISDC_Bianchi Winch