A Grounded Case of Enterprise Acquisition


  • David Douglas


grounded theory, small business, entrepreneurship


To gain ‘real world’ understanding of the managerial approach adopted in an established small business when taken over by another entrepreneur from that of it’s predecessor. The research highlights perceptual differences internal stakeholders (employees and the new owner) have regarding the business and the managing of it. Illustrated are the commercial consequences that can ensue from the change of ownership of an established enterprise through to the managerial style perceived appropriate by a new entrepreneur, and, subsequent employees’ cognitions and behaviours that ensue as reactions to changed managerial practices. Findings are reviewed against existing theories within the fields of entrepreneurship, decision theory and management. Design/Methodology/Approach: Situated within the qualitative paradigm, the unit of analysis being one small (nevertheless complex) organization affords the researcher opportunity to inquire deeply into case study phenomena. The unit of analysis soon develops, through the application of ‘original’ grounded theory methodology (utilizing depth interviews and observations), to being the human interactions of all actors within the organization. Discovering meanings and behaviours across a number of dimensions produces a rich textual account of actors’ perceptions of enterprise events and subsequent repercussions to the business. Findings: Emergent conceptual categories and supportive properties conveyed the new entrepreneur’s limited understanding of the business he had bought, along with his technical, managerial and decision‑making style seemed insurmountable management impediments. Substantive theory that captured the social processes and phenomenological contentions from the grounded theory analysis conclude. Not wholly proffering generalisable pronouncements, the research presents a robust framework for further small enterprise research and grounded approaches to data capture and analysis. Implications: Implications of the study will be of interest to entrepreneur and qualitative researchers, interested in the findings as a contribution to the field, and, the grounded theory methodology applied in establishing ontological ‘groundedness’ of inductively derived at theories. Originality/Value: There is a paucity of such research outside the big business spectrum. Contributes at a ‘substantive’ level by focusing on the entrepreneur’s ‘post take‑over’ management approach, and, at a more formal level through empirical ‘owner‑manager‑entrepreneurial’ research situated within the qualitative paradigm, where a deficiency of ‘depth’ cases remains. And especially for this forum, the findings are the result of meticulous attention to data gathering, analysis and emergent theory building, through the application of grounded theory methodology. Grounded theory has seen limited application to‑date in the small business and entrepreneurship field.



1 Dec 2010