Showing papers in "Journal of Small Business and Enterprise Development in 2004"

Entrepreneurship, small business and economic growth

Abstract: Looks at the relationship between small business and entrepreneurship and also the differences between the two. Stresses that both are important separately and, in addition, notes where they overlap. Posits that in the early part of the last century small businesses were both vehicles for entrepreneurship and sources of employment and income but, although still important in the post‐war years, large firms made great inroads in the 1960s and 1970s. Concludes that government’s central role in entrepreneurialism for the economy is, by its very nature, enabling. Furthermore, entrepreneurship is acknowledged as a driver for economic growth, competitiveness and job creation.

SMEs and e‐business

Abstract: This paper explores a range of issues surrounding the adoption of ICT and e‐business technologies and techniques by small and medium‐sized enterprises (SMEs). The paper reviews the nature and extent of the take‐up of these technologies by small firms, and the digital divides that have emerged. Models of e‐business adoption by SMEs are examined, the linear model being contrasted with the more realistic “PIT” model. Barriers to the adoption of e‐business technologies and techniques are discussed, together with factors that promote successful adoption, and the major role played by human capital. It is concluded that the take‐up of e‐business by SMEs needs to be seen as a means to an end and not an end in itself. Government preoccupation with the take‐up of the technology of e‐commerce needs to be tempered with a more realistic view of how small firms operate.

E‐commerce adoption support and advice for UK SMEs

Abstract: The small business sector of the UK economy is extremely important and the government expends considerable resources in providing support services for this sector. This paper investigated the reasons why SMEs move from traditional commerce to e‐commerce, the efficacy of the support services and the barriers encountered by SMEs adopting e‐commerce. The research methodology involved literature review and interviews with SMEs’ owner‐managers and a UK Online business adviser. It was found that at least two “e‐commerce stars” used by the government to promote its support services had in fact not used those services. The historical relationship problems between Business Link and SMEs were still causing problems. Cost was not seen as an inhibitor to adopting e‐commerce. Some evidence was emerging that e‐commerce may be able to save failing or struggling businesses. Other unexpected outcomes were that e‐commerce had social benefits for SMEs’ owners in reducing working hours yet still increased sales.

Entrepreneurial learning: a process of co‐participation

Abstract: Applying social concepts to the social relations that the entrepreneur maintains, this research seeks to identify the impact of these relationships, and the learning that might result from them, on the decision‐making process. A social and conversational model of experiential learning is put forward, where learning and influence are seen to emerge as part of an ongoing negotiated process. This argument complements Kolb's “fundamentally cognitive” theory of experiential learning, by challenging the view that the learner should be viewed as an “intellectual Robinson Crusoe”, and stating that even when an individual reflects and theorises their thoughts have a social character. Data were collected using critical incident technique through one‐to‐one in‐depth interviews over several weeks. The paper goes some way to confirm the importance of networks in the business development process, helping further to define how networks exist. The learning identified, is understood therefore as part of an ongoing negotiated process within a complex network of domestic, voluntary, commercial and professional relations.

Family business and corporate social responsibility in a sample of Dutch firms

Abstract: This paper explores corporate social responsibility in family businesses. In particular, the research investigates family businesses in relation to a wide variety of constituent or stakeholder groups. It reports the preliminary results of focused interviews with 42 small and medium‐sized Dutch family businesses. The data obtained from content analysis suggest that a mix of corporate social responsibility perspectives, help to explain the nature of relationships with, and behaviors toward, various constituency groups. The family character of the business most frequently impacts employee, client, and supplier relationships. Statistically significant interaction effects are reported for the following moderator variables: generation of the owner; company tenure in the community; community size; company size; and inclusion of the family surname in the business name. Interaction effects were also tested for industry type and gender. The paper also outlines some practical implications of the findings and suggests directions for future research.

Small business performance: a UK tourism sector focus

Abstract: Discussion and analysis of small businesses tends to work on generalised, popularised understanding and knowledge of what their motivations are and how they behave in a business environment. The need to explore below these generalisations into the submerged variables and relationships is argued in this paper if academics and policy makers seriously want to interpret and induct theory and practice from the key actors within their natural habitat. Thus, this paper provides a conceptual framework relative to small, urban tourism business performance, which is used as an analytical framework to guide the interpretation of qualitative research undertaken with small businesses in the City of Glasgow. Specifically, discussion and conclusions focus on the complexity and multi‐dimensional nature of small tourism business performance, aspects pertaining to competitive advantages, and the enterprise development issues arising from the prioritisation of lifestyle objectives over those of a more explicit economic natu...

Management, strategy and policy in the UK small business sector: a critical review

Abstract: This paper first considers the role and characteristics of the small firm and its collective, the small business sector. A brief examination of the small firm discourse and research agenda is provided. The following section undertakes a critical examination of the small firm management context. A critical appraisal of the strategic management approach suggests that strategic activity in the small firm sector is much more informal, intuitive and invisible than has been previously suggested by design school advocates. The final part of the paper considers the role and development of policy and its effects on the survival, growth and performance of small firms.

Practical theories from entrepreneurs' stories: discursive approaches to entrepreneurial learning

Abstract: This study develops the use of “practical theory”, as a resource in entrepreneurial learning. Practical theory emerges from the implicit, intuitive, tacit and situated resource of practice, whereas academic theory is abstract, generalised, explicit and seeks to be provable. The study develops practical theories from the life story accounts provided by interviewing entrepreneurs. The study demonstrates a framework and example for interpreting entrepreneurial learning and developing practical theory from these accounts. Thirty practising entrepreneurs were interviewed, in a wide range of industries and at different stages of life and career experience, from first venture to experienced serial entrepreneur. Practical theories of entrepreneurial working have been developed, using the framework of “what, how, why, who and in what conditions” the practices identified are effective. The practical theories arising from the study are presented using this structured framework, based on a sense making perspective. Discourse material is used to support and illustrate the practical theories, which relate to personal learning and development; identifying and developing innovative opportunities; creating new ventures; and managing growing businesses.

Changing HRM practices with firm growth

Abstract: Despite common perceptions about the informality of human resource management (HRM) practices within small firms, few studies have considered how HRM practices change with firm size. This paper explores how HRM practices of small firms change as the size of the firm increases. Using data from micro, small and medium firms in Queensland, Australia, the paper reviews the recruitment and selection practices, training methods, performance appraisal and the maintenance of HR records and policies in these firms. The findings indicate a move towards hierarchical structures, increased documentation and more administrative processes as the number of employees increases. The increase is rapid initially and then occurs at a slower pace thereafter. Such changes have implications for the management of the employment relationship. The paper concludes that HRM practices in small firms cannot be portrayed by a standardised description and that management training and advice for small firms must recognise the diversity associated with this important sector of the Australian economy.

Farmers online: drivers and impediments in adoption of Internet in UK agricultural businesses

Abstract: Farm businesses appear to have much to gain from the use of Internet technology, particularly given their spatial dispersion and typically small scale (in terms of employment and turnover), but available statistics show a lower rate of adoption than small to medium‐sized enterprises (SMEs) in general, with less than one‐third of UK farmers using the Internet for business purposes. This article reports on an investigation by the University of Plymouth of Internet adoption by farmers in two contrasting agricultural areas, with three iterations over six years. Insights will be of value to anyone interested in the adoption of information and communication technology in microbusiness, and/or in the development of e‐commerce in the farm sector. Identifies research and policy issues outstanding in the field of Internet adoption in agriculture, including the rollout of broadband infrastructure, the development of human capital, the key role of farm family members, and the understanding of the complexity underlying the adoption process.

Networks in small manufacturing firms

Abstract: The theories of networks have become more popular in recent years when discussing business structures. It can be said that co‐operation is seen as a theory that plays an important role in the survival of many small and medium sized businesses. Co‐operative and networking strategies amongst business in Mid Wales has brought them many benefits and a competitive advantage that they would not be able to afford on their own. These issues were investigated in this research into the practical value of networks in small manufacturing companies. The aim of this study is to look at the provision for small business by analysing their value, by noting the implications, and providing recommendations for the future of networking amongst small and medium sized enterprises. The small manufacturing businesses in this study saw that networking was a very cost‐effective way compared to other strategies to improve their performance. The businesses co‐operate in order to share information and resources and to undertake joint projects. By exchanging information and know‐how, networks can be an important tool for small business entrepreneurs to improve their businesses.

The environment for female entrepreneurship in Germany

Abstract: The German government only recently started paying attention to the topic of female entrepreneurship as an important means to raise the overall level of entrepreneurship. Most relevant support policies concentrate on extending and stabilising the financial base of new female‐owned ventures. Relevant consultancy appears to play a less important role, although there has been a shift towards integrated packages in recent years. However, access to mainstream support is implicitly gender biased. Moreover, an integrated strategy for fostering female entrepreneurship also needs to consider that there are shortcomings in the institutional (political and societal) environment, possibly restricting women's interest in entrepreneurship and thus determining the extent of female entrepreneurship.

The effects of regional capital subsidies on firm performance: an empirical study

Abstract: Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the total factor productivity of recipient sectors and firms, and have provided strong evidence of neutral or even negative effects. The present study examines the effect of capital subsidization on four dimensions of the financial performance of firms, that is efficiency, profitability, capital structure, and growth, and provides evidence that capital subsidization affects solely firm growth.

Factors associated with formal networking in regional small business: some findings from a study of Swedish SMEs

Abstract: A number of recent studies have suggested that, for small businesses to compete with their larger counterparts in the electronic commerce environment, many are collaborating in a network arrangement. This study examines whether factors such as business size, business age, business sector or market focus are associated with decisions to collaborate in a network or remain outside such arrangements. The study showed that small businesses, with fewer than ten employees, were more likely to be part of a formal network of small businesses. The results also showed that the age of the business, the number of suppliers, the existence of a marketing strategy and the educational level of the CEO were significantly associated with decisions to become part of a formal networking arrangement.

A study of procurement behaviour in small firms

Abstract: This paper analyses buyer‐supplier relationships from the perspective of small and medium‐sized enterprises (SMEs). Preliminary results show that actors within a supply chain are not homogeneous in terms of their size, resources and business motives, and this brings into question the validity and relevance of the purchasing literature when examining smaller firms. This paper outlines the usefulness and importance of purchasing behaviour in SMEs in relation to the size and nature of the firm. The research draws principally from a series of in‐depth interviews undertaken with owner‐managers within plastic moulding companies in Lancashire, UK.

Contemporary training initiatives in Britain: a small business perspective

Abstract: This article focuses upon six recent training initiatives in Britain, all of which included a small business training remit. It evaluates the training impact of these initiatives on a sample of 6,000 small businesses and measures their effectiveness in terms of awareness, understanding, interest and actual implementation rates. The research highlights a number of common trends pertinent to the training initiatives reviewed in this study, suggesting that there may be a considerable mismatch between specific small business training needs and the services on offer.

Identifying the adoption of e‐business and knowledge management within SMEs

Abstract: This paper presents results on the extent to which e‐business and knowledge management approaches are being used by SMEs in the UK. The questionnaire survey and interview results identify the main issues that should concern SMEs if they want to prevail in the emerging business environment and knowledge economy. The main finding is that SMEs have increasingly applied e‐business for B2B and B2C activities, but SMEs are not generally aware of how knowledge can be created through the use of e‐business applications and daily operations. It is envisaged that the findings from this study will provide the main step forward in developing a reference framework and a management model for SMEs to assess, manage and make use of the existing and new e‐business tools and knowledge reflecting the e‐business and knowledge management era.

A qualitative investigation of smaller firm e-business development

Abstract: A previous paper by the authors drew on existing research on e‐business and the smaller firm, developed a conceptual model and a set of research propositions. This paper analyses a series of qualitative, in‐depth interviews of owner/managers of smaller firms in central Scotland in order to test the research propositions. Results indicate that industry and sectoral factors play an important role in the level of e‐business development achieved. In many cases the customer determines the need for e‐business adoption, rather than any internally planned programme of adoption. Other important factors include the degree of entrepreneurial orientation of the key decision maker and the ability to exploit appropriate competencies. Recommendations for encouragement of e‐business development are made and suggestions for future research are included.

The role of boards of directors in small and medium‐sized firms

Abstract: The size, characteristics and structure of boards of directors have been claimed to be an important influence on the performance of large firms, but have been less examined in small firms. For larger firms the role of boards acts more as a substitute for the development of internal staff and management skills, indicating that for large firms directors chiefly support the control role of CEOs. The importance of seeing boards, external consultants and internal management skills as substitutes is demonstrated, and is shown to have a non‐linear relation with firm size. However, a key finding of the paper is that there is little evidence of a strong association of board size, board qualifications, or board structure with firm performance, measured by profitability, employment growth or propensity to innovate.

Job satisfaction survey among employees in small businesses

Abstract: This study applied Job Descriptive Index (JDI) to measure job attitudes among approximately 80 employees of four different small businesses. Through a standardized procedure, each employee filled out the survey form, responded to a structured interview, and then completed the survey form again. Employees showed significant difference in job satisfaction before and after the structured interview. Medians from four dimensions – work, supervision, promotion, and co‐worker – were found to besimilar to norms but the medians of pay were much lower than the norm. Nevertheless, pay did not represent the lowest correlation with job satisfaction. Satisfaction at supervision did. Also employees reported work to have the highest correlation with job satisfaction. Demographic factors, such as age, work status, gender, and seniority did not show significant impact over job satisfaction.

Electronic commerce strategy, operations, and performance in small and medium‐sized enterprises

Abstract: Explores the electronic commerce (e‐commerce) involvement of small and medium‐sized enterprises (SMEs) in terms of the strategic, operational, and performance aspects. Findings are reported from a survey of SMEs in northern California. The results show that SMEs tend to pursue e‐commerce strategies associated with customer base expansion and customer service consistent with their bricks‐and‐mortar competitive strategies and build e‐commerce operations consistent with their e‐commerce strategies. These e‐commerce strategies also contribute to the SMEs’ sales growth and profitability. However, e‐commerce strategy associated with purchasing management is the least favored alternative and does not affect profitability. The implication of the findings for managers and future research are discussed.

E‐entrepreneurship and small e‐business development: towards a comparative research agenda

Abstract: This article employs a holistic overview of the existing specialist literature in an attempt to define, clarify and discriminate between the important aspects of the ongoing electronic revolution (ER). Based upon a critical review of empirically rigorous publications, it aims to identify and explore the fundamental aspects of e‐commerce and e‐business. It also proposes a tentative framework for a critical research agenda in e‐entrepreneurship and small e‐business development.

Employer characteristics and employee training outcomes in UK SMEs: a multivariate analysis

Abstract: Workforce development is becoming a higher priority for government, both as a means of addressing social exclusion and raising competitiveness. However there is limited evidence of the contribution of training to the success of individual firms and even less evidence of the impact of such training activity on small to medium‐sized enterprise (SME) employees. This paper draws on a survey of 1,000 employees to investigate the impact of a training intervention on employees in SME workplaces. It explores issues associated with the equity of provision of training in the workplace and the impact of training on the employability of SME employees in the labour market. The results suggest that training interventions lead to positive outcomes for the majority of SME employees, particularly those working in organisations with relatively formalised training practices. It concludes by suggesting that there should be a greater focus on the employee dimension in research and policy regarding training in SMEs.

Internationalization strategies selected by established rural and urban SMEs

Abstract: This study explores whether there are differences between established “rural” and “urban” SMEs with regard to the decision to sell goods or services abroad. Several hypotheses were formulated and tested. In 1990/1991, survey responses were gathered from 621 independent businesses located in the UK. In 1997, a follow‐on telephone survey was conducted with 150 surviving firms. Urban exporting SMEs reported superior performance to urban non‐exporting SMEs in 1997. Rural and urban SMEs, however, did not significantly differ from each other with regard to the reasons cited for not exporting, the reasons cited for exporting, and the modes of entry into the largest current foreign market selected by exporters. Nevertheless, some rural SMEs had circumvented local resource constraints and entered foreign markets by engaging in networking. Implications for policy‐makers, practitioners and researchers are highlighted.

Customer dependency in manufacturing SMEs: implications for R&D and performance

Abstract: In the now global business environment, SMEs are being subjected to increased pressures. In the manufacturing sector in particular, increased requirements for information and knowledge management, innovation, quality, and flexibility within new organisational forms such as the network enterprise entail organisational developments that can affect critical business processes, R&D in particular, and business performance. Hence, the customer dependency of manufacturing SMEs on certain important customers or the absence of diversification in their customer base can have significant impacts on the R&D activities, the productivity, and eventually the profitability of these organisations. Through an empirical study of 179 Canadian SMEs, it was found that more commercially dependent firms allocate more financial and human resources to product R&D. These firms are also less productive in that they have relatively fewer sales per employee. While customer dependency seems to negatively affect the SMEs’ profitability, firms whose product R&D activities are more intense report significantly higher gross margins. R&D activities could allow manufacturing SMEs to counter the influence of their major customers, by reversing the direction of commercial dependency, and thus to reduce their vulnerability.

Entrepreneurs' attitudes to training and support initiatives: evidence from Ireland and The Netherlands

Abstract: Increasingly, academics, practitioners and governments recognise the need to examine the role and effectiveness of entrepreneurship training and support. Studies to date have examined the importance of training and other skill development opportunities in promoting entrepreneurship in the context of different sectors, regions and countries. An important theme to emerge from the research is the failure of some programmes to take on board the cultural, educational and social background of the “entrepreneurs”, leading to ineffective training and support. This paper investigates the effectiveness of training and support initiatives for entrepreneurs in Ireland and The Netherlands, examining the experiences of 57 entrepreneurs from the services, manufacturing and high technology sectors in Ireland and The Netherlands. The results highlight the value of non‐formal support structures, such as mentoring and networking, and question the value of traditional formal business education and training strategies.

Small independent retail firms and locational decision-making: outdoor leisure retailing by the crags

Abstract: The importance of location to retail organisations has long been recognised in the geography and retail marketing literatures, with subjective and “gut feel” methods of evaluation emerging as highly significant factors in the decision‐making process. Through the application of existing frameworks we seek to highlight the importance of location to small independent retailers in the context of outdoor leisure retailing. The case of “UpFront”, a pseudonym for a retailer operating four outlets in Great Britain, is presented. It is shown that, although based largely on luck and opportunism, the firm's locational “strategy” has been crucial to its success as a leading player in the sector. Based on detailed interviews with the managing director and employees, the role and importance of location as a critical success factor to the organisation is presented. In conclusion, a call is made for greater engagement with the nuances of location to small retail organisations, given its impact on a large number of retail operations.

Internationalising high‐technology‐based UK firms’ information‐gathering activities

Abstract: Previous studies have shown that lack of information can provide an obstacle to firms’ endeavour to be competitive in oversea markets. This study provides empirical data that examine how managers of internationalising UK high‐technology firms perceive the usefulness of overseas market information, their levels of utilisation, plus perceptions of the types of data required. Findings are based on a postal survey of winners of the Queen’s Award for Technological Achievement; also reported are selected findings from a series of in‐depth interviews. This paper sets out to establish whether statistical differences exist between two sub‐samples identified by their overseas market expansion strategies: those that concentrate on key markets as opposed to those that spread sales over a number of markets. Results from follow‐up interviews provide in‐depth data to support the quantitative findings.