EXECUTIVE SUMMARY
In order to take advantage of growth opportunities and to avoid growth pains, SMEs must be equipped with necessary funds. An appropriate way to raise funds is represented by the public stock exchange.
The objective of the present paper is to elaborate success factors that might be of assistance for SMEs when going public in order to avoid growth pains. In particular, SMEs have an immense backlog regarding their financial controlling, strategy, management quality, transparency and internal structure in general related to the “standard” level that has to be considered as generic requirement for a publicly held company. Thus, the starting hypothesis of the present paper is: In case an SME does not deal with such challenges
in due time and appropriate manner, it will not be able to realize the growth intended with an IPO. Such discrepancies would rather lead to sustained destruction of value with the consequence of massive growth pains at the post-IPO stage.
Therefore the present paper aims to analyze the relevant differences between the aforementioned areas that, after all, could have a direct impact on the performance of the organizational development of the company, in order to deduce crucial success factors for a successful initial public offering (IPO) and to avoid growth pains.
This shall be achieved by analyzing the relevant literature through systematic research review, in order to capture information on the current state of research. Then, in a second step it will be aimed to conduct a theoretical analysis of different scientific concepts based on the captured discrepancies in oeder to identify parameters and measures that ought to be observed as success factors in the preparation of an SME for a forthcoming IPO.
As a last step, the identified success factors (“best practice”) will be assessed by a systematic analysis of recent IPOs within the last ten years, based on random samples, for the purpose of examining whether such factors gained from theoretical analysis are subsequently applied in practice. This analysis shall consider whether the performance with respect to profitability, growth and evaluation of the companies applying those success factors differ from the performance of companies evidently not applying the identified
success factors.
This work concludes that essential problems do not arise from asymmetric information flow but poor management quality. [...]
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Background and Problem Statement
- State of Research
- Aims and Objectives
- Scope of research and limitations
- Literature Review
- The Concept of Growth
- Introduction
- Organizational growth
- Organizational Life Cycle
- Healthy growth vs. unhealthy growth
- The Concept of the "New Institutional Economics"
- Introduction
- New Institutional Economics
- Property-Rights
- Principal Agent Theory
- The Concept of Value-orientation
- Introduction
- Value-based management
- Financial value-drivers
- Operational value-drivers
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master thesis aims to identify success factors that contribute to a healthy organizational development of young SMEs going public, focusing on mitigating the potential "growing pains" associated with this transition. The study investigates how SMEs can effectively leverage an initial public offering (IPO) to achieve growth while avoiding the pitfalls of a poorly managed expansion. Key themes addressed in this study include: * **Organizational Growth and Development**: Examining the stages of SME growth and identifying the challenges and opportunities associated with transitioning to a publicly held company. * **Value-based Management**: Assessing the importance of value orientation in the context of an IPO, focusing on both financial and operational value drivers. * **New Institutional Economics**: Applying insights from the New Institutional Economics to understand the role of property rights and agency theory in the context of SME going public. * **Management Quality and Success Factors**: Identifying key factors that contribute to a successful IPO and help mitigate "growing pains" including a robust management system and a clear strategy for growth. * **Empirical Analysis of IPOs**: Utilizing data from recent IPOs to assess the practical application of the identified success factors and their impact on post-IPO performance.Zusammenfassung der Kapitel (Chapter Summaries)
The introduction establishes the background and problem statement concerning the challenges faced by SMEs during the transition to a publicly held company. The state of research provides an overview of existing literature on the subject. The literature review delves into key theoretical concepts relevant to the study. This includes the concept of growth, focusing on organizational growth, the organizational life cycle, and the distinction between healthy and unhealthy growth. It also explores the New Institutional Economics, emphasizing the role of property rights and the principal-agent theory. Finally, the chapter examines the concept of value orientation in the context of value-based management, outlining both financial and operational value drivers.Schlüsselwörter (Keywords)
This study focuses on the organizational development of young SMEs going public, analyzing the success factors for avoiding "growing pains" associated with an initial public offering (IPO). Key terms include: organizational growth, value-based management, New Institutional Economics, financial value drivers, operational value drivers, management quality, post-IPO performance, and success factors for IPOs.- Quote paper
- Margaritis Stogiannidis (Author), 2013, The Avoidance of growing pains: Success factors for a healthy organizational development of young SME's going public., Munich, GRIN Verlag, https://www.grin.com/document/263386
