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Economic Analysis: Theory and Practice
 

Analyzing causes of failures and long-term development strategies of start-ups

Vol. 13, Iss. 46, DECEMBER 2014

Available online: 7 December 2014

Subject Heading: CORPORATE GOVERNANCE

JEL Classification: 

Pages: 38-49

Korshunov I.A. Ministry of Education of Nizhny Novgorod region, Nizhny Novgorod, Russian Federation
ik@nnic.nnov.ru

Gaponova O.S. National Research University Higher School of Economics - Nizhny Novgorod, Nizhny Novgorod, Russian Federation
nta11@mail.ru

Importance The characteristic feature of the current stage of the Russian economy development is active processes of system-related changes. One of the tools of such changes is the formation of a stable layer of young companies of early development phase. In this regard, important issues in this area are factors and conditions under which such companies will survive, grow and manage their business effectively. At the same time, the key role belongs to building an adequate response system of a startup to internal and external disturbances.
     Objectives The purpose of this study is to analyze and substantiate theoretically and empirically a startup's survival dependence on external factors and on its system of management of key functional areas.
     Methods In this paper, using sociological methods of research, we have analyzed the main problem areas arising at early stages of a startup development.
     Results The article describes possible adverse sequence of events and distinguishes external and internal threats for a startup. Within the existing concepts of systemic crises, we have analyzed typical crises as applied to the Russian reality, typical errors of founders in major functional areas. The paper provides our recommendations aimed at effective preventive actions.
     Conclusions and Relevance We conclude that a startup development is a process, which depends on a large number of factors. The founders and young directors should apply competent measures of organizational management to react to all the factors. In this paper, we have systematized these circumstances so that young chief executive officers could quickly take advantage of available solutions and experience gained so far.

Keywords: Keywords: innovation, early phase, startup, life cycle, organizational structure, management, long-term development

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