Risk taking is a key ingredient in a high performing innovative private firm. Such firms focus on motivating employees to make product innovations, quality improvements, and take risk by employing trial and error approaches. High performing firms assess marketing initiatives and strategic branding to highlight the benefits of innovations and improvements to existing products.
Employee welfare and a commitment to organizational objectives are essential to growth. A tight-knit cultural development within the firm allows employees the autonomy to create and take the necessary risk fueling the firm’s growth. Much of the recent growth in China’s economy came from firms with characteristics. These types of firms are more flexible and able to adapt to changing settings needed to develop their products. A growth orientation enables these firms to deal more effectively with early-stage risks.
Large public companies rely more on stability and avoiding liability from taking on new risks. The aim of the large public company is to preserve existing wealth. The small private firm looks not to preserve existing wealth, but to grow new wealth.
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