Carter, S., 8c Jones-Evans, D. (Eds.). (2000). Enterprise and small business: Principles, practice, and policy. Harlow, UK: Pearson Education. Recently, we completed teaching a very successful course focusing on the small firm and entrepreneurial behavior. We elected to use for the first time a core text and selected Enterprise and small business: Principles, practice, and policy, edited by S. Carter and D. Jones-Evans. While the context of the course is very specific (we teach American students in the undergraduate division of an accredited American college in Jerusalem), We believe that our experience, and in particular our experience with the core text, might be of use to our colleagues. First, we would like to examine some of the challenges and possibilities that present themselves to those who teach undergraduate courses in small business ventures, challenges and possibilities that we contend are relevant to the selection of a course text. The first is that the probability of a student in an undergraduate business class starting or entering a small business is considerable. In spite of the high profile and textbook dominance that Fortune 500 companies have, small businesses are still the largest employer. This suggests that a small business venture course is best understood as a forum for addressing possible future involvement rather than an exploration of the unusual, remote, and vaguely exotic. The second factor that is relevant is that an elaboration of the characteristics and contexts of entrepreneurial behavior is inseparable for any discussion of the small firm, even although entrepreneurial activity is neither exclusive to the small firm nor correlated to the size of the firm. This suggests that the course examines the nature, antecedents, and structural context of entrepreneurship. Finally, the small business course has traditionally sought to review the functional areas (marketing, financing, etc.) that are to be found in all business enterprises. While this approach seems to have dubious face validity and potential utility, it becomes clear that any examination of these functional areas must consider and reflect the quite different dynamics in the firm that compromise only an individual or small group of employees. These three challenges presented by the small business course are manifestations and responses to a more pervasive problem. All to often the small business has been presented as a scaled-down version of a Fortune 500 company. While having a significant impact on our economies, the large corporation is numerically rare among all the business ventures that operate within those economies. And yet, we have come to see the large corporation as not simply a very effective way to do business but as a normative way to do business. The large corporation dominates our undergraduate courses in management, marketing, and finance. We deal with these experiences, their challenges, their solutions, and their strategies. While these courses might not be designated large business ventures as such, it is clear the focus of the presentation is overshadowed by a consideration of large enterprises and that the content is selectively shaped by the agenda of the largescale firm. The challenge in designing the small business course is to consider the unique issues that such enterprises raise rather than to portray the small firm as a colorful, exotic mutation of a Fortune 500 company. Attempts to downsize large corporations do not result in small firms any more than microsizing their functional areas result in solutions for operating them. Such exercises in reductionism inevitably fail to capture the unique emergent dynamics that characterize the small firm (Starr-Glass, 1996). Enterprise and small business: Principles, practice, andpolicy is an exciting and provocative book that provides and excellent framework for exploring the richness of the small business and entrepreneurial activity. …

Enterprise and Small Business: Principles, Practice, and Policy

The purpose of this paper is to examine the relational capabilities developed by small and medium-sized suppliers in relationships with larger customers and to explore the influences of these relational capabilities on value co-creation and innovation. The paper presents a framework to evaluate the types of relational capabilities developed by small and medium-sized suppliers that enable them to manage in relationships with larger customers in the context of changing relationship requirements in the organic food sector. The methodology employed involves in-depth case studies of small and medium-sized UK organic food suppliers working in relationships with large retail supermarket customers. The findings suggest that the identified set of relational capabilities may be employed by small and medium-sized suppliers to enable them to inform and support innovation and the implementation of initiatives to create value in the eyes of their current and potential customers and concomitantly enhance their position as preferred suppliers. The findings were based on a small number of case studies of small UK organic food suppliers. Therefore, there is scope for future studies to explore the issues addressed in the paper in wider relationship, network and country settings. The research is among the first to offer a conceptual framework and an empirical contribution linking relational capabilities, value co-creation and innovation in small and medium-sized suppliers.

Relational capabilities for value co-creation and innovation in SMEs

The coronavirus outbreak has become a global issue with significant effects on capital markets, and the global economy; its impacts are estimated to be even more than the previous global recessions...

The coronavirus (COVID-19) pandemic: challenges among Iranian startups

Role of the knowledge-based resources in promoting sustainability in small and medium enterprises (SMEs) is currently a topic of debate. Financial literacy has been identified as a vital knowledge resource for financial decision making, but insufficient attention has been given to how SMEs’ financial literacy affects their sustainability. Drawing upon a knowledge-based perspective, peaking order theory and dual process theory, we constructed an integrated model to examine the impact of financial literacy, access to finance and financial risk attitude on SMEs’ sustainability. The sample included 291 chief financial officers (CFOs) of SMEs in Sri Lanka. The output of structural equation modelling revealed direct positive effects of financial literacy, access to finance and financial risk attitude on sustainability. Financial literacy also emerged as a predictor of access to finance and financial risk attitude. Moreover, access to finance and financial risk attitude were found to be partial mediators of the relationship between financial literacy and SMEs’ sustainability. Theoretical implications and practical implications for policymakers, industry practitioners and academics interested in promoting sustainability amongst SMEs are discussed.

How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

The answer to the challenging question, “Should one either invest in tangible resources or intangible resources/capabilities?” is still fragmented. In prior studies, more emphasis is given to tangible resources, while intangible resources have comparatively received minor attention, despite their significant role in the success of small and medium enterprises (SMEs). Particularly the role of the intangible skills; intellectual capital, financial literacy (FL), and business experience (BE) in resource acquisition and sustainable competitive performance has missed in prior studies. Grounded on the resource-based view and upper echelon theory, this study examines the role of intellectual capital in sustainable competitive performance with a mediating role of resource acquisition. This research also assesses the moderating role of financial literacy and business experience between intellectual capital and resource acquisition. Data are collected through structured questionnaires from 384 owners/managers of Pakistani SMEs. After analyzing the data through structural equation modeling (SEM), the results indicate that intellectual capital helps managers in acquiring valuable resources, which in turn enhance sustainable competitive performance. Resource acquisition partially mediates the relation between intellectual capital and sustainable competitive performance. Financial literacy is a significant predictor of resource acquisition, but it does not significantly moderate the relation between intellectual capital and sustainable competitive performance. Business experience significantly boosts the acquisition of resources and strengthens the path between intellectual capital and resource acquisition. SMEs should encourage their managers to acquire unique, rare, and immutable external resources in the turbulent markets.

https://www.mdpi.com/2071-1050/11/2/527/pdf

The Role of a Manager’s Intangible Capabilities in Resource Acquisition and Sustainable Competitive Performance

The purpose of this paper is to examine the relationship between financial literacy, access to finance and growth among small- and medium-sized enterprises (SMEs) within the Midlands region of the UK. It assesses whether financial literacy assists SMEs to overcome information asymmetry, mitigates the need for collateral, optimizes capital structure and improves access to finance.,To gain a deeper insight into the complex relationship between financial literacy, access to finance and growth, a qualitative research is carried out among SMEs that have operated for over five years or longer. Using the purposive sampling technique, 37 firms were selected based on size, location and characteristics, mainly from the city of Birmingham and the joining conurbations. Open-ended and a combination of dichotomous questions were used for the survey. Interviews were recorded, transcribed and thematically analyzed.,Financial literacy is an interconnecting resource that mitigates information asymmetry and collateral deficit when evaluating loan applications, therefore financial literacy should be part of school curriculum. The analysis suggests enhanced financial literacy, reduces monitoring cost and serves to optimize firms’ capital structure that positively impacts on SMEs growth. Financial management knowledge is recognized as the core resource that aids an effective decision making by owners of SMEs.,The limitation of this research is the small sample that limits its generalization. Its findings could be enhanced by a larger sample and by conducting comparative studies in other regions or economies. SMEs growth is seen as a strategic policy to stimulate enterprise but the finance gap tends to constrain that objective. The UK Government’s effort to improve access to finance and to mitigate excessive collateral demands by lenders has proved elusive. This empirical research provides evidence that financial literacy enhances access to finance and, in turn, promotes growth potentials.,The results of this study advocate the provision of financial literacy at schools and target support for SMEs to acquire financial management skills in order to mitigate information asymmetry between lenders and borrowers.,Findings suggest that financial literacy mediates access to finance, enables enterprises to use optimal financial structure to mitigate business failure, creates employment and reduces public sector support for social benefits.,This study is novel in that it examines financial literacy and its implications for access to finance and firm growth in the UK. The study is an effort to highlight the role of financial information in mitigating barriers to finance for SMEs.

/pdf/is-knowledge-that-powerful-financial-literacy-and-access-to-2a00t6h2xn.pdf

Is Knowledge that powerful? Financial literacy and Access to Finance: An analysis of Enterprises in the UK

Purpose: Against the background of growing concerns that development interventions can sometimes be a zero-sum game, this paper examines the unintended consequences of microfinance for women empowerment in Ghana. Design/methodology/approach: The study employs a participatory mixed-method approach including household questionnaire surveys, focus group discussions and key informant interviews to investigate the dynamics of microfinance effects on women in communities of different vulnerability status in Ghana. Findings: The results of hierarchical regression, triadic closure and thematic analyses demonstrate that the economic benefits of microfinance for women is also directly associated with conflicts amongst spouses, girl child labour, polygyny and the neglect of perceived female-domestic responsibilities due to women’s devotion to their enterprises. Originality/value: In the light of limited empirical evidence on potentially negative impacts of women empowerment interventions in Africa, this paper fills a critical gap in knowledge that will enable NGOs, policy makers and other stakeholders to design and implement more effective interventions that mitigate undesirable consequences.

/pdf/is-women-empowerment-a-zero-sum-game-unintended-consequences-30yrku7h0v.pdf

Is women empowerment a zero sum game? Unintended consequences of microfinance for women’s empowerment in Ghana

© 2018, Emerald Publishing Limited. Purpose: Manufacturing and services SMEs in Africa face challenges and constraints exacerbated by ineffectual government policies, environmental turbulence and the near absence of institutional support. The purpose of this paper is to investigate if informal linkages and formal cooperation are helping firms to overcome constraints to uptake of technological innovations in Nigeria. Design/methodology/approach: The paper is based on quantitative data obtained from structured interviews of 631 Nigerian firms. These firms were selected using stratified random sampling from a total population of 18,906 manufacturing and services companies in the national database obtained from the National Bureau of Statistics. Findings: The result of the binary logistic regression indicates that while informal linkages appear to be insignificant, formal inter-firm cooperation is an effective moderator of barriers to technological innovations. Research limitations/implications: The paper focusses only on technological, rather than non-technological, innovations. Practical implications: The paper recommends that, in addition to other interventions to promote diffusion of technological innovations, governments should give priority to interventions that support formal cooperation among SMEs. Originality/value: Previous studies have generally looked at the impact of cooperative networks on firms’ innovation uptake. This paper provides original insights into the “how” of cooperative impact, specifically with respect to helping SMEs to overcome constraints. The paper also delineates formal cooperation from informal linkages.

/pdf/technological-constraints-to-firm-performance-the-moderating-39i0reh13w.pdf

Technological constraints to firm performance: The moderating effects of firm linkages and cooperation

In recent years there is increasing appetite for regulation of financial institutions after the 2008 financial crisis. Policy questions such as whether competitive micro finance institution (MFI) requires strong regulation to reduce, for example credit risk or competition and regulation operate in the opposite direction, which each tends to dampen the effect of the other, is an empirical issue that this paper provide answers based on data on Sub-Saharan Africa (SSA) for the period 1995 to 2015, utilizing panel data approaches. Finding from the study indicates that competition increases credit risk among MFIs in SSA, which regulation helps reduce such behaviour. The effect of regulation on credit risk is conditional on the level of competition, at the first percentile of competition; regulation does not reduce credit risk behaviour of MFIs, but does at competition level above the 25th percentile. Regulation on the other hand does not affect operational risk at any level of competition.

Samuel Salia

Papers

Is Knowledge that powerful? Financial literacy and Access to Finance: An analysis of Enterprises in the UK

Is women empowerment a zero sum game? Unintended consequences of microfinance for women’s empowerment in Ghana

Technological constraints to firm performance: The moderating effects of firm linkages and cooperation

Are competitive microfinance services worth regulating? Evidence from microfinance institutions in Sub-Saharan Africa.

Is microfinance for women empowerment a zero sum game