An Empirical Study Of Key Factors Affecting IT Firms' Growth

The issue of sustainability and growth of business enterprises has been regarded as fundamental concerns by academic circles and business communities. In recent years in particular, with the rapid development of information industries, IT enterprises have played an increasingly important role in the economy. As a result, how IT enterprises are started and grow up has drawn a higher degree of attention from both academic and practical perspectives. The key issue of concern is how IT companies can grow stronger and operate in a sustainable manner in a context in which fierce market competition and fast rate of technology innovation are taking place constantly. Based on the understanding and analysis of sufficient research literature and drawn upon the research achievements on IT enterprise growth in China, this paper summarizes the merits of enterprise theories and further develops the framework of enterprise life-cycle theories. It focuses its research effort on the resource-based theories of enterprise development which is the most representative of the contemporary theoretical analysis on business enterprise growth.The paper also highlights the main findings of research on resource-based analysis of the enterprise competencies. Conventional resource-based theory views the enterprise growth as determined by factors within the enterprises themselves, which apparently is an important progress. However, it shows limitation in not taking into account the varying external factors. Enterprise life-cycle theory believes that enterprises in different stages of growth should be studied with a different focus. This view has been widely accepted. Its weakness, though, lies in the fact that its approach is mostly qualitative, lacking sufficient support from quantitative analysis of the empirical data. This research has based its study on the existing theoretical framework and practical data collected from field interviews, by which a system composed of key factors on enterprise growth is developed. A variety of key factors affecting enterprise growth in different phases and scales are examined. These factors include personal charisma of entrepreneurs, strategic management competence, human resources management capability, marketing skills, capabilities for corporate culture, technology innovative capability and external relations management. A system of empirical data measurement for key factor analysis is developed on the basis of previous research literature and consultation with IT business professionals and senior industry experts. A comprehensive survey questionnaire is also designed within this measurement system.Referring to the existing theories of enterprise life cycle, this paper interprets Chinese IT enterprises by four development phases: startup, high-speed growth, stabilized development and re-innovation. The research focuses on the growth patterns of the IT enterprises in their first three development phases.Applying SPSS statistical software program to the analysis of the data collected, the reliability and validity of the questionnaire are tested and verified. The research explores and finds the degree of influence by the above-mentioned seven key factors to China's IT enterprises in their different development stages. These key factors are also ranked in terms of the sequence of their importance.The findings of this research adds value to the empirical studies on China's IT enterprises'growth. It may help advance the management practices of the IT enterprises in China.