Showing papers in "International Journal of Entrepreneurial Behaviour & Research in 2004"

Rural entrepreneurship in Europe: A research framework and agenda

Abstract: The present work provides an integrated view of rural entrepreneurship and sets the agenda for future research in the area. Rurality defines a territorially specific entrepreneurial milieu with distinct physical, social and economic characteristics. Location, natural resources and the landscape, social capital, rural governance, business and social networks, as well as information and communication technologies, exert dynamic and complex influences on entrepreneurial activity in rural areas. Rurality is viewed as a dynamic entrepreneurial resource that shapes both opportunities and constraints. Rural entrepreneurship is depicted as a three‐stage sequential process highly influenced by specific territorial characteristics. The proposed research agenda addresses issues related to theoretical studies concerning entrepreneurial processes in rural areas and more applied issues concerning the formulation of integrated and competent policies supporting entrepreneurship in such areas.

Factors impacting on e‐business adoption and development in the smaller firm

Abstract: Globalisation and technology effects appear to have spurred smaller firms around the world to embrace e‐business practices. However, there is considerable variability in adoption and usage from country to country. Drawing on existing research on e‐business and conventional business and marketing in the smaller firm, this paper formulates a conceptual framework of reasons behind adoption and non‐adoption in the smaller firm. Macro dimensions, industry sector and firm‐level factors are analysed, together with owner/manager motivations and attitudes towards e‐business adoption. A conceptual framework is constructed and research propositions are then developed in order to focus attention on sets of internal and external factors which impact on smaller firm e‐business usage. Recommendations for future theory development are presented, together with implications for industry bodies involved in supporting the SME sector.

Barriers to innovation within small firms in a peripheral location

Abstract: Designated peripheral regions within the European Union (EU) have economies and standards of living which are below average. One of the primary reasons recognised by local government for this poor economic standing has been low levels of innovation within indigenous small to medium‐sized enterprises (SMEs). These SMEs have difficulties in growing and exporting or being part of successful supply chains. The aim of this paper is to explore how innovation is successfully incorporated or hindered in SMEs within an EU peripheral region. An innovation model was applied in a multiple case study methodology involving 41 SMEs. Both quantitative and qualitative data were gathered and analysed. The paper concludes that SMEs must strategically plan for innovation and move beyond continuous improvement, or “kaizen”, and states that such plans must avoid quick fixes and address the underlying cultural barriers to innovation, such as organisational structure, owner‐manager leadership issues, a lack of empowerment and lack of use of employees' ideas and suggestions for innovation.

Entrepreneurial Aspirations Among Family Business Owners: An Analysis of Ethnic Business Owners in the UK

Abstract: This paper contributes to our understanding of the intersection between entrepreneurship and family businesses by examining the business aspirations of immigrant entrepreneurs from five different ethnic minority communities in the UK. It explores differences in the entrepreneurs' antecedents that might explain differences in their aspirations and examines the interaction between aspirations and business behaviour and outcomes. It finds that despite the importance of the family in their businesses, ethnic minority entrepreneurs have diverse aspirations. It is possible to distinguish between those with business‐first, family‐first, money‐first and lifestyle‐first aspirations. Their educational and family background affects entrepreneurs' aspirations, as does their stage on the family life cycle. Differences in aspirations are related to the nature of business, the way in which it is managed, the recruitment of professional managers and entrepreneurial performance. Our findings highlight the diversity in aspirations among family business owners and the complexity of the interaction between ethnicity, culture, class and entrepreneurship.

Small tourist firms in rural areas: agility, vulnerability and survival in the face of crisis

Abstract: This paper reports on the quintessential rural small firm, the tourist service provider and explores the impact of the recent foot and mouth outbreak. A theoretical framework is employed which proposes that many rural small firms capture and commodify the values that are inherent in the countryside. Part of this process is the portrayal of image and is an essential element of the new economy of signs and symbols. This image was critically challenged during the outbreak and thus affords us a unique opportunity to examine what happens, the impacts and effects, on small rural business when the image is tarnished. The findings show that small firms in rural areas suffered badly, even in areas where there was no disease. This leads one to argue that the effects of the disease were generated, less by fact, and more by the production of image. However, it was also found that rural small firms were extremely flexible in their responses to the crisis. In turn this seems to suggest that many small rural businesses may have a particular resilience which augurs well for sustainability.

The relationship between succession issues and business performance: evidence from UK family SMEs

Abstract: Researchers widely argue that the most significant difference between family controlled and non‐family business concerns the way in which executive succession occurs, and more specifically, unique aspects of the process of intergenerational family business transfer. The importance of this study is acknowledged by the fact that it offers researchers and practitioners empirical evidence that links succession issues and the state of performance in UK‐based small‐ and medium‐sized family businesses. The article commences with a review of the conceptual framework that relates to the critical factors influencing the succession process, followed by an introduction of the methodology. Then the article proceeds with a detailed statistical analysis based on a stratified randomly selected sample (169 small‐ and medium‐sized family controlled businesses). In summary, the article concludes with a set of tentative recommendations. It is anticipated that this study will enable a deep debate of the issues surrounding the succession practice and raise a wide awareness of the critical factors shaping the ownership transition.

Cyberentrepreneurship:A multiple case study

Abstract: New information technologies have become the source of a new form of entrepreneurship known as cyberentrepreneurship. The cyberentrepreneur creates a firm that is essentially founded upon electronic commerce (e‐business start‐up), and whose main activities are based on exploiting networks using Internet technologies. So far, researchers have tended to study entrepreneurship as it is expressed in more traditional business models, even though there is recent interest in technology‐based entrepreneurs. Given that cyberentrepreneurship is still in its emergent phase, further research is needed on the subject. The study described in this paper, an in‐depth exploratory study of five cyberentrepreneurs, was designed to throw more light on cyberentrepreneurial processes and on the competitive elements applied by cyberentrepreneurs in starting up their business.

Patterns in strategy formation in a family firm

Abstract: Despite the fact that about 90 percent of all the businesses in the US and Canada are family‐owned and operated, very little research has been undertaken on how strategy is shaped in family businesses. This paper tracks strategy in two family firms since their inception to their present third generation management, to investigate the unique factors influencing strategy in family businesses. The paper accentuates issues relating to the intensive grooming process and the involvement of the different family and non‐family members in the strategic decision making processes of the family business.

Ownership Structure, Board Composition and Entrepreneurship : Evidence from Family Firms and Venture-Capital Backed Firms

Abstract: The purpose of this article is to investigate how ownership structure, especially family and/or venture‐capital involvement, as well as entrepreneurial activities, defined as strategic change and renewal, help explain the involvement of independent members on boards of directors. The CEOs of 2,455 small and medium‐sized, private enterprises from practically all industries were contacted in a telephone survey, resulting in an exceptionally high response rate. The findings reveal that family firms are more reluctant to involve independent directors on their boards than non‐family firms, that presence of venture capitalists increases the frequency of independent board members and that ownership has an impact on board roles. The results do not support the hypothesised relationship that independent directors enhance entrepreneurial activities. One implication of our study is that the often‐argued‐for strategic contribution of outsiders to the boards in family firms may be overemphasised. Another implication is that family firms that choose to acquire additional capital should be aware that this could result in a change in the board composition and the loss of control of the business. However, new and external owners' inclusion on the board seems to be negotiable since there are also venture capitalists that do not insist on board representation.

Governance in Spanish family business

Abstract: This explorative research paper illuminates the governance systems in Spanish family businesses, and evaluates the extent to which they pursue good governance practise both in the business and family areas. Empirical evidence is drawn from a database of 112 sizeable Spanish firms, and the results show the absolute dominance of the leading family in the ownership, control and management of sample firms. Approximately half of the members of the board tend to be insiders and more than two‐thirds are family members. It emerges that generational firms (with third generation and beyond owner‐managers) exhibit greater similarity in their governance structures to first generation firms than second generation ones; this might be due to the so‐called “pruning” which is used as a survival mechanism. Overall, it emerges that family firms have a very low degree of board regulation by formal rules and family governance systems are hardly developed.

ICT‐enabled collectivity as a positive rural business strategy

Abstract: This paper examines the development of Internet‐based, virtual business forums and their potential for overcoming some of the difficulties faced by business owners in rural areas. Rural environments provide challenges for business owners due to limited local markets and limited access to resources. The paper examines the success of collective action by business owners in rural environments in Scotland to establish Internet‐based business forums that seek to meet such challenges. Using case study methodology, the paper finds variable experiences and proposes a model of the process of collective action.

Women creating wealth through rural enterprise

Abstract: Rural enterprise needs to be encouraged to preserve the countryside – not just economically but socially and culturally. The logic for policy measures to be introduced that encourage enterprise growth to constitute some reversal of economic decline in rural areas is clear. Business enterprises have been targeted as one vehicle to bring about rural regeneration. Research in Shropshire, UK, has, however, found that most “non‐farm but on‐farm” enterprises are started and run by women, but that little formal support exists to encourage and sustain their growth. This paper looks at some of the characteristics of rural female entrepreneurs and highlights one project (Women in Rural Enterprise – WiRE). WiRE has been formed specifically for rural female entrepreneurs in Shropshire/West Midlands and briefly considers why this specifically targeted kind of policy focus is vital not only to economic development but to social and cultural sustainability in rural areas.

Rural rogues: a case story on the “smokies” trade

Abstract: Research into rural entrepreneurship continues to expand, albeit slowly. A common theme in the literature is the creation of value and its extraction from the environment. Rural entrepreneurship potentially covers a wide gamut of activity including the illegal. Also studies into agricultural entrepreneurship particularly traditional accounts of “rurality” tend to emphasise the rural idyll. Most studies tend to concentrate on the application of entrepreneurial theory to issues of rurality and as such exist on the margins of entrepreneurship research – being primarily studies into rurality and not entrepreneurship per se. Rarely do such studies impinge on issues of illegal enterprise that shatter this rural idyll. As a consequence, rural and farming rogues have been neglected as subjects of research. Yet, in the present perceived climate of economic decline in agricultural income, extracting value from the environment can be difficult and can give rise to illegal enterprise in the countryside as well as an increase in the prevalence of farming rogues. The case story, presented in this paper relates to one such illegal enterprise, namely the illegal slaughter of sheep for the Muslim “halal” market, known to those in the know as the smokies trade. Using the case story methodology this paper explores an issue of contemporary illegal enterprise in the countryside telling an important story that is otherwise difficult to evidence empirically.

Immigrant transnational entrepreneurs in New York

Abstract: The structuration model linking macro‐ and micro‐level societal structures and individual actions in a reciprocal causality is applied to the analysis of the relationship between immigrants' transnational entrepreneurship and their assimilation to the host society. Depending on immigrants' economic and sociocultural resources and their location in the economic and political structures of the host city/country where they reside and the home‐country/region they originate from, their transnational business engagements may combine with assimilation and ethnic entrepreneurship may not lead to integration into the host society. This argument is empirically illustrated by comparing three kinds of entrepreneurship and the (trans)national/ethnic commitments they generate. These three types are represented by New York Chinese global traders, Jamaican ethnic entrepreneurs, and Dominican small‐scale investors in home‐country businesses. Although these entrepreneurial activities do not exhaust the types of business pursued by these immigrants (there are also in New York local Chinese and Dominican entrepreneurs, and Jamaicans involved in business in their home‐country), they have been recognized and investigated in each group.

Guest editorial A commentary on family business entrepreneurial developments

Abstract: Introduces the special issue which focuses on family business entrepreneurial developments. Outlines the articles in the issue which not only increase our repository of family business research, but also provide useful insights for new research addressing topics such as family business centred ethnic entrepreneurship, “interpreneurship” and “intrapreneurship”, succession planning, financial philosophies; governance‐boards, consultation‐communication practices, and strategy formulation.

“Interpreneurship” Organisational (re)emergence and entrepreneurial development in a second‐generation family firm

Abstract: Although there has been some attention to how notions of entrepreneurship and family intersect in the life of family businesses, analysis of these issues in relation to inter‐generational and organisational emergence in small family firms is underdeveloped. In order to redress this imbalance, it is important to undertake analysis of entrepreneurial issues alongside those of family, ownership, management and inter‐generational emergence. A fourth entrepreneurial axis is added to Gersick's developmental life cycle framework to facilitate this. This is then applied to aid interpretive analysis of two second generation owner‐managers and sons‐in‐law of the original founders of a small manufacturing company in the UK. Working with his younger brother‐in‐law, the two family members are responsible for taking a small steeplejack company into its third generation and a new electrical engineering market. As the younger brother‐in‐law takes on an entrepreneurial role within the company and endeavours to develop new opportunities, the chairman gives an account of the struggles involved in achieving a balance between ownership, management and family tensions. The notion of “interpreneurship” whereby family members are interacting and creating new possibilities for themselves, their lives, their organizations whilst drawing upon past events, happenings, experiences and conversations that have gone before, is also considered.

Employee involvement in family and non‐family‐owned businesses in Great Britain

Abstract: Nationally representative data on family businesses is available in the 1998 Workplace Employee Relations Survey, alongside comparable information for other types of firms. We use this data to compare differences in the use of different consultation and communication procedures. We cover such practices as the use of direct communication schemes (e.g. briefings, the provision of information on financial performance to the workforce) as opposed to indirect methods such as the use of joint consultative committees. There is an a priori expectation in the literature that family‐owned businesses are either more likely to use direct forms of communication (vis‐a‐vis indirect forms) or that they will not be involved in direct communication or consultation with their employees, and we test this using multivariate techniques. Finally, we consider whether the type of consultation/communication structure matters in terms of establishment performance, and what differences exist with respect to family‐owned businesses. In particular this short paper reports the outcome of testing if those firms that consult directly with staff, as apposed to those that consult through joint consultative committees or trade unions, have higher productivity and/or other measures of performance.

Adding or subtracting value?: Constructions of rurality and Scottish quality food promotion

Abstract: Attempts to diversify and regenerate the rural economy often embrace a particular representation of the local culture and society. The quality food product industry in particular has secured its status as a key player in the future of rural Scotland, Analysed here is the development of the cluster and enterprise strategies which seek to add value to advance competitive advantage in both domestic and global markets. Based in a consideration of the policy frameworks for rural Scotland, and of the food and tourism sectors especially (both prioritised by Scottish Enterprise and Highlands & Islands Enterprise as key sectors), this paper presents a critical evaluation of how value is construed through an examination of current case studies of Scottish quality food production and promotion. The paper considers how the promotion of particular signifiers of “added value” has implications for how regionality, rurality, quality and Scottishness are all defined.

The Lexus and the Olive Tree: a rising mode of internationalisation

Abstract: The paper discusses networking through brand affiliation/endorsement as an increasing mode of internationalisation. Brand affiliation or brand endorsement involves a form of franchising, whereby local services take on a global reach. Whereas conventional theories on the internationalisation process explicitly or implicitly assume that internationalisation is a matter of tapping a new geographical market, mired with risk and uncertainty due to its “foreignness”, brand affiliation means that the offerings of a local business take on the global features associated with the global brand. The global brand endorses or vouches for the locally bound business, thereby providing it with a global recognition and reach. In spite of the global explosion in the practice of affiliation and franchising, there has been little concern with this form of internationalisation, or with the issues and the challenges posed for the franchisees, which are most often SMEs, in managing two brands, two identities and two cultures. The present paper seeks to explore this business relationship and its inherent contradictions, mainly from the franchisee's perspective, and asks whether the dictates of global requirements for efficiency, functionality and consistency can be reconciled with social and cultural values associated with localisation, and what the theoretical and practical implications of this internationalisation process are.

The nurturing and harvesting of a rural Greek network

Abstract: This paper considers the role and process of the formation and development of a social network in the furtherance of rural small business. The paper's contribution is in enhancing our knowledge about the social aspects of rural networking. The study uses a qualitative approach of data collection involving participant observation and interviews to build a full picture of the networking activities of two competing olive oil producers based in a small village in Greece. The data were analysed by comparative analysis to show that for both cases networking is primarily a social activity. Networking practices involved becoming embedded in the community, building a reputation for usefulness and establishing trust. It was noted that the entrepreneurs both focused on linking activities by using their position within the rural network to establish useful further external linkages.

The views of UK family business owners on flotation

Abstract: This empirical research paper draws evidence from a database of UK independent private companies (n=250) and reports on the financial aspirations of owner‐managers of family firms with respect to the flotation route. Following a brief review of the literature, the paper proceeds with an introduction of the UK survey into the financial development of private SMEs. Then evidence is presented on the perceived factors that influence the decision of owner/directors of family companies to consider the flotation option. Phase A employs univariate statistical analysis to contrast financial philosophies of the owner‐managing directors (OMDs) of family firms against those of their mainstream private counterparts. Phase B employs cluster analysis to categorise sample family companies into four generic groups that evidently highlight that the PLC route is not always tailored to financial issues. The empirical results demonstrate that the financial strategies of family companies are more or less in line with the behavioural issues shaping all private companies irrespective of family control. Finally, the paper concludes with a set of tentative policy implications. To encourage the public equity development of smaller privately held companies, particularly family firms, there is scope for more policy initiatives that are tuned to the “socio‐behavioural‐cultural” ethos of private‐OMDs as they master their corporate and entrepreneurial odyssey.

Local interpretation of national micro‐enterprise policy: To what extent has it impacted on local enterprise development?

Abstract: Small businesses and micro‐enterprises provide more than 75 per cent of all private sector employment in most countries. In today's environment where large urban areas are more attractive to young people and multinational employers, micro‐enterprise support has become a very important element of both industrial and regional policy, especially in Ireland. However the development of support policies for small businesses is not new and has been evolving over the last 30 years, but up to the early 1990s no support structure policies existed for micro‐enterprises. This research involves an assessment of Ireland's current government micro‐enterprise policies and their effects on entrepreneurs and the growth of their businesses at a local level. The research endeavours to establish if government policy in the micro‐business sector is meeting the objectives of government, if it is satisfying the requirements of the entrepreneurs, i.e. promoters of micro‐enterprises at local level, and to understand what are the effects of local interpretation of government policy on entrepreneurs and their businesses.