Flamholtz and Randle (2007) divide the six areas of organizational transition into four stages from entrepreneurial orientation to professional orientation: the new venture stage embracing the layers of markets and products and services, the expansion stage embracing the layers of resource management and operational systems, the professionalization stage embracing the layer of management systems, and the consolidation stage embracing the layer of corporate culture.
New venture: The first stage is described very much about a birth firm which has to encounter the decision of an original market location (Freeman & Hannan, 1983) and correspondingly concentrate on products and services it provides to customers (Midgley, 1981). This is a period of pure entrepreneurial management is common with regard to direct control from the entrepreneur(s) on firm activities.
Expansion: In the second stage, a firm commonly experience organizational growth to a certain extent. Simple and direct management from the entrepreneur(s) seems to be a little weak to control a firm. On the other hand, more new problems to encounter would come up, and they make entrepreneurs act more like firefighters within their firms. In this stage, resource management (Caroll & Yangchung, 1986) and operational systems (Manzini & Bindi, 2009) to guide daily work of employees should be pointed out as two significant aspects to be considered by entrepreneurial management.
Professionalization: From the beginning of this stage, a firm would be deemed a professionally managed one. Strategic thinking is core guidance of the management in this stage. To support it then achieve long-term goals, a firm is expected to pay most of the efforts to various management systems (Child & Keiser, 1981), such as construction or reconstruction of an organizational structure, management and leadership development, performance measurement, and reward systems (Flamholtz & Aksehirli, 2000).
Consolidation: The fourth stage which concentrates on the nurture and development of organizational cultures (Flamholtz & Aksehirli, 2000) is a developing form of the former. In other words, the professional management systems established in the third stage provide strong foundations to nurture organizational culture.
The most notable transition between these four stages at an organizational level is the one from the second to the third, described as the milestone transition from entrepreneurial orientation to professional orientation. In other words, the professionally managed period is approaching in the transition process.
As a birth firm, it puts efforts on short-term revenues to make itself survive and then grows rapidly. Similarly, once the firm is in a stage of professional management, consequently, encountering new issues much different from ones at the earlier stages, more ought to be done from a higher level rather than resorting to short-term measures with which a firm probably concentrates on functions towards markets and products (Flamholtz and Randle, 2007).