Showing papers in "Journal of Small Business and Enterprise Development in 2009"

Women‐owned small and medium enterprises in England: Analysis of factors influencing the growth process

Abstract: Purpose - This study attempts to understand the nature and activities of growth-oriented women-owned businesses in the East of England by highlighting the problems faced by women entrepreneurs during the growth process. Design/methodology/approach - The approach analysed the main growth factors and their influence on the adoption of different growth strategies. An online questionnaire was designed using Snap survey software™, with results exported to SPSS™ for analysis. Both quantitative and qualitative data were collected via a variety of scaled, open-ended, rank order, dichotomous, multiple choice and open questions. Findings - The research indicates that most do not opt to develop growth-oriented businesses, choosing instead small, non-scalable, locally focused businesses providing services or operating in low-tech industries. Women who are growth-oriented appear to be inhibited due to a lack of access to, and control over such resources as, capital, business premises, information and technology, production inputs, appropriate childcare, qualifications, experience, training facilities and appropriate assistance from business development agencies. Non-effective accumulation and use of social capital hinders access to appropriate decision-making circles, and limits the probability of accessing critical management and financing resources, especially through the venture capital industry. Practical implications - This research has implications for government or other business development agencies seeking to understand the growth patterns and problems of women-owned enterprises in the East of England. Originality/value - There are few British studies that have focussed on growth oriented women-owned businesses. This study contributes to the body of knowledge by attempting to understand the nature and activities of such business, by analysing the main growth factors and their influence on different growth strategies.

A resource‐based view of micro‐firm management practice

Abstract: Purpose – The purpose of this paper is to discuss a resource‐based approach for exploring micro‐firm management practice, as informed by the relevant literature. Specifically, the paper analyses available literature and catalogues micro‐firm and managerial competence criteria in pursuit of managerial insights in this environment.Design/methodology/approach – A comprehensive literature review precedes the conceptualisation of micro‐firm management practice.Findings – Literary findings suggest that, considering micro‐firms' internal resource constraints, minimal environmental power, and owner‐centred culture, it is vital for these organisations to embed their valuable resource in their core business strategy, to ensure survival in the longer term. Furthermore, there is an assumption that knowledge must be used optimally within the micro‐firm by developing the analytical and critical skills of individuals, groups and the entire organisation so as to sustain and grow these firms' competitive advantage. Having...

Adoption of internet in Malaysian SMEs

Abstract: Purpose – This paper aims to investigate empirically the decision of small to medium‐sized enterprises (SMEs) to adopt the internet in their businesses.Design/methodology/approach – Using a survey of 465 sampled SMEs from Klan valley area in Malaysia, this study tests seven hypotheses about the factors that influence internet adoption.Findings – The findings show that manager's characteristics, perceived benefits, organisational culture, technological competency and cost of adoption have significant relationships with internet adoption. The results of the study of highly educated managers of SMEs also revealed a non‐significant relationship between language, growth of web and internet adoption.Originality/value – The study provides more understanding of managers' perceptions about internet adoption in their businesses. Those interested in promoting the web may find these results helpful in guiding their efforts.

The role of the marketing function in small and medium sized enterprises

Abstract: Purpose – The purpose of this paper is to examine marketing in small and medium‐sized enterprises (SMEs), its role as a driver of competitive advantage, and, therefore, its importance to the firm.Design/methodology/approach – The study is conducted with 100 SMEs located in the mid‐Atlantic region of the United States.Findings – The marketing function is not as well developed or influential in SMEs as it is in large corporations. Two environmental factors, type of market (consumer) and firm orientation (hierarchal), facilitate marketing's influence within a firm.Research limitations/implications – Analyses conducted and conclusions reached in this research are based on a very limited sample of SMEs located in one region of one country. Broader sampling would help in generalization of the findings.Practical implications – The results of this study are particularly troubling because marketing resources are one driver of competitive advantage. For marketing to increase in influence, individuals trained in mar...

A comparison of the motivations of small business owners in Africa

Abstract: Purpose – This paper sets out to examine the reasons why 599 entrepreneurs in Kenya, Ghana and Nigeria started their small businesses. It aims to compares ten motivations across three countries and by gender.Design/methodology/approach – Ten Likert‐style questions were used to determine start‐up motivations. The mean scores were calculated and compared to test for significant differences. A factor analysis was conducted to see whether the ten items could be synthesized into distinct factors. Then, the factors were compared across countries and by gender.Findings – The strongest motivator across countries was the opportunity to increase income. A factor analysis found three motivation factors: a family factor, an external validation factor, and a self‐betterment factor. The three countries showed significant differences with Ghanaian entrepreneurs rating the family factor as more important. The item analysis showed that female entrepreneurs were less motivated to create a business as a legacy or for extern...

Entrepreneurship education in the UK: A critical analysis of stakeholder involvement and expectations

Abstract: Purpose – This paper aims to explore stakeholder involvement in, and expectation of, entrepreneurship education in UK higher education institutions (HEIs).Design/methodology/approach – Longitudinal telephone surveys were conducted annually over an eight‐year period (2000 to 2007) to document and analyse 336 respondents' involvement in, and expectation of, entrepreneurship education in UK HEIs.Findings – The results indicate that stakeholder involvement in entrepreneurship education is explicit, widespread and linked to ongoing educational developments that have radically transformed management structures and accountability at all levels of the UK educational system. Stakeholders' expectations are equally complex and varied, reflecting a heterogeneous range of individual, group and community needs.Practical implications – The findings provide valuable insights into entrepreneurship education for students, university staff, policy makers and other stakeholders. Government could use the results of this resea...

UK small owner‐managed businesses: accounting and financial reporting needs

Abstract: Purpose – In recent years there has been a growing interest in the provision of financial information by small business entities. In the UK, regulation has taken the form of the Financial Reporting Standard for Small Enterprises (FRSSE) and internationally UNCTAD has issued its own reporting guidelines for small enterprises ahead of the International Accounting Standards Board's (IASB's) standard on the subject. Despite this international interest, academic research investigating the accounting and financial reporting needs of small enterprises remains relatively scarce. This UK‐based study aims to assess the potential demand for and usefulness of reporting guidelines specifically designed for small owner‐managed enterprises (SoMEs).Design/methodology/approach – Using postal questionnaires, data were gathered from accountants providing services to SoMEs and the owners of such enterprises.Findings – It was found that most SoMEs produce accounting records, often based on computerised packages. However, fina...

Public and private sector entrepreneurship: similarities, differences or a combination?

Abstract: Purpose – While the term “entrepreneurship” is not exclusively a private sector phenomenon, it is usually associated with private sector business activity and more specifically with small to medium enterprises. However, over the last two decades it has appeared in the public administration literature with increasing frequency. The recent research in public sector entrepreneurial activity makes an exploratory comparative analysis of the key components that are applicable from private sector entrepreneurship timely as the topic is emerging as an area of academic inquiry and research. The purpose of this paper is to provide a comparative analysis of private and public sector entrepreneurship using an analytical model from private and public sector entrepreneurship.Design/methodology/approach – A clear understanding of the research issues involved requires an appreciation of the nexus between private sector entrepreneurship and the more limited research field of public sector entrepreneurship. The paper ident...

An investigation into the initial barriers to internationalization: Evidence from small UK retailers

Abstract: Purpose – This paper is the result of empirical research funded by The British Academy. The overall purpose of the study is to investigate the initial barriers to internationalization experienced and perceived by small retailers based in the UK and the role of government support in addressing such obstacles.Design/methodology/approach – A qualitative, multiple case research design is adopted. This involves semi‐structured in‐depth interviews with the senior manager/decision‐maker in six retail SMEs based in the UK and the analysis of company documentation and information from a range of secondary sources.Findings – The findings from the case study data highlight internal and external barriers to internationalization relating to management: lack of vision, fear of losing control, lack of knowledge; the company: transfer of retail concept overseas, lack of resources, lack of consolidation in domestic market; and the external environment: legislation, currency, cultural differences and logistics. The finding...

The relationship between the manager and growth in small firms

Abstract: – The purpose of this paper is to improve the understanding of the relationship between the manager and growth in small firms, through a review of earlier research., – A review of articles published during the last 25 years is carried out in order to answer the question: How does the top manager influence growth in small firms?, – Three key relationships are identified: between growth and, respectively, managerial traits and characteristics, managerial intentions, and managerial behavior or roles. The diverse findings in the literature are contradictory and give a paradoxical picture of the impact of the manager. A deeper analysis of the results from the review, supplemented with leadership theory, yields a better understanding of small‐firm growth with a special focus on the behavior of the manager., – This paper problematizes the complexity in managing small‐firm growth, and can be further empirically validated by using multiple methods including qualitative ones such as observational studies., – The findings have a bearing on education and policy implications. If a behavior can be identified that promotes small firms' growth, education and policy implications can be developed in line with these results., – In small firms there seems to be a general consensus that managers do influence the performance of small firms, but so far there has not been a systematic review of earlier empirical research, that is done in this paper. From this review, a more complete picture of how managers influence growth in small firms is presented.

Entrepreneurship: an organisational learning approach

Abstract: Purpose – The purpose of this paper is to shed new light on the interface between learning and entrepreneurship, i.e. to show how entrepreneurship can be studied as a never‐ending, dynamic learning process.Design/methodology/approach – By applying the typology of learning concepts at different organisational levels, the paper will elucidate how the entrepreneur's learning process is fundamental in his quest for new business opportunities and describe learning as a crucial factor for entrepreneurial activity.Findings – From observations, a new definition of the entrepreneur is derived (entrepreneur as a learner) and a conceptual model of entrepreneurial learning theory is synthesized.Research limitations/implications – The newly developed conceptual model has not been empirically validated. In terms of the guidelines for future research, this topic should be addressed by collecting information to expand the conceptual model presented here.Originality/value – Key entrepreneurial learning components are iden...

Performance of microenterprises in Ghana: a resource‐based view

Abstract: Purpose – The purpose of this paper is to assess the financial performance of microenterprises in Ghana by applying the resource‐based theory of the firm. Specifically, it is tested that if firm‐specific resources dominate sector and market‐wide effects in explaining microenterprise performance, as suggested by the resource‐based theory.Design/methodology/approach – The relevant literature for both microenterprise performance and the resource‐based theory is reviewed. Data from the 1998/1999 Ghana Living Standards Survey are analysed using ordinary least squares, followed by robustness checks.Findings – Factors embodied in firm‐specific resources jointly impact enterprise performance. However, sector/market factors also play a role, suggesting that the interaction between microenterprise, sector, and market factors helps explain enterprise performance.Research limitations/implications – All the constructs of the resource‐based theory cannot be tested due to data limitations.Originality/value – Small enter...

Investigating the e‐CRM activities of Irish SMEs

Abstract: Purpose – Relationship marketing principles have seldom been applied to the small‐ and medium‐sized enterprise (SME). The purpose of this paper is to develop what is a striking link by presenting empirical evidence on the role of internet technologies in the customer relationship management activities of Irish SMEs. More specifically, this is a comparative study investigating electronic‐customer relationship management (e‐CRM) in international and domestic firms. The nature and role of e‐CRM is assessed, the strategies behind e‐CRM delineated, and the ensuing benefits and challenges revealed.Design/methodology/approach – The paper has an exploratory outlook and a quantitative approach to data collection is adopted to facilitate broad classification in an under researched area. A self‐completion questionnaire is distributed to a sample of 1,445 SMEs. A response rate of 20 per cent is obtained, providing 286 usable responses. Univariate and bivariate analyses were performed using SPSS.Findings – The finding...

Does the firm size matter on firm entrepreneurship and performance?: US apparel import intermediary case

Abstract: Purpose – The purpose of this paper is to investigate whether the relationship between firm entrepreneurship and performance is dependent on firm size within a small and medium‐size enterprise (SME) population, using non‐manufacturing, industry‐specific empirical data.Design/methodology/approach – Survey methodology was employed, using a national sample of US apparel import intermediary (AII) SMEs. Regression analysis was performed to determine the type of the moderator variable, firm size, and to test statistical significance of the firm size effect on the relationship between firm entrepreneurship and performance measures.Findings – The paper's results suggested that the firm size effect was present on the relationship between firm entrepreneurship and SMEs' longevity performance; however, there was no statistical significance of the firm size effect on the relationship between firm entrepreneurship and SMEs' creative contribution or profitability performance.Research limitations/implications – Although...

Challenges facing W. Midlands ICT‐oriented SMEs

Abstract: Purpose – The purpose of this paper is to highlight the challenges faced by West Midlands (UK) information communications technology (ICT)‐oriented small to medium‐sized enterprises (SMEs) in adopting and coping with the speed of fast‐changing technologies.Design/methodology/approach – A total of 73 company managers (most of them are owners) were interviewed in various sub‐regions of West Midlands. Among the companies, 81 per cent of SMEs opted for face‐to‐face interview, while 19 per cent opted for a telephone interview.Findings – Several factors that affect the speed of adopting new technology were identified, ranging from SME owner or manager level of education, lack of strategy and perceived benefits in adopting new technologies, to ICT investment, involvement in research, innovation and research and development.Research limitations/implications – The study focused on the ICT‐oriented businesses in general. ICT is a wide area and so there is a need to test each type of ICT and see how other factors li...

Training in Thai SMEs

Abstract: Purpose – The purpose of this paper is to profile Thai small‐medium enterprises (SMEs) and fill a research gap about their investment in training and approaches to training.Design/method/approach – The paper uses a quantitative, descriptive design with a drop‐off survey among 438 SMEs in Thailand.Findings – The study reveals a relatively young, highly‐educated cohort of SME owner/managers, with greater business longevity than other countries. They do not invest a great deal of time or money in training and prefer informal, unstructured on‐the‐job (OTJ) training. Most SMEs train a few or none of their members for two hours a week and thus are “low” or “tactical” trainers. However there are some “strategic” trainers particularly in contemporary industries such as IT and services as well as larger and higher‐earning SMEs.Research limitations – The study focuses on urban Thai SMEs and thus may not represent rural or regional areas, or SMEs in other countries. The quantitative approach does not explain why inv...

Personal, household and business environmental determinants of entrepreneurship

Abstract: Purpose – The purpose of this paper is to explore personal, household and business environmental influences on entrepreneurship in Kosova.Design/methodology/approach – The approach takes the form of a econometric investigation using a binary choice model based on a nationally representative labour force and household survey conducted by Riinvest Institute at the end of 2002.Findings – The results suggest that males, those who live in urban areas, belonging to a larger family/household, have a higher likelihood of being involved in entrepreneurial activities, while a weak positive effect of age and no significant effect of marital status are found. Self‐employed were more likely to be found in sectors where start‐up and sunk costs are expected to be lower (such as services and trade), those sectors that experienced high growth (construction) and in the regions in which entrepreneurship is more developed. In contrast with previous studies, it is found that education received household remittances and the pr...

Knowledge capability flows in buyer‐supplier relationships: Challenges for small domestic suppliers in international contexts

Abstract: Purpose – The purpose of this paper is to understand how suppliers have managed to accumulate knowledge in their relationship with large multinational clients.Design/methodology/approach – The methodology was based on four case studies' qualitative data, collected from semi‐structured, in‐depth interviews. The buyers were selected among the largest MNEs of the electronics, automotive and footwear industries and the suppliers were selected among the set of SMEs supplying to those MNEs. The objective was to assess the supplier's knowledge transfer‐oriented capabilities and the buyer's interaction‐oriented capabilities in the SBR.Findings – The paper highlights the important leading role of the client in the buyer‐supplier relationship involving SMEs as well as the knowledge‐sharing atmosphere of successful cooperative relationships. Although it confirms the advantages of alliances for SMEs, knowledge transfer‐oriented capabilities, are used by SMEs in order to sustain client satisfaction and to strengthen t...

Financing preferences of micro and small enterprise owners in Tigray: does POH hold?

Abstract: Purpose – This paper aims to investigate the determinants of financing preferences of micro and small enterprises (MSEs) owners in Tigray regional state of Ethiopia in light of the Pecking Order Hypothesis (POH).Design/methodology/approach – Structured questionnaires were used to collect data from 120 MSEs in six zonal towns of Tigray regional state. Logistic regression model was used to empirically test the literature‐driven hypotheses.Findings – Key findings include that POH holds true for MSE owners in Tigray regional state as the educational level of owners decreases and there is less intrusion in the form of ownership. On the other hand, MSE owners with a higher degree of entrepreneurial skills are found to conform with the predictions of POH. Furthermore, factors such as ownership type, acquisition type, level of education of the owner/s and reason for business startups are found to be major determinants of MSE owners' financing preferences.Research limitations/implications – There are of course ele...

Strategic alignment of HRM practices in manufacturing SMEs: a Gestalts perspective

Abstract: Purpose – This paper seeks to take a Gestalts perspective to analyze the alignment between the HRM practices and strategic capabilities of SMEs.Design/methodology/approach – Based on Miles and Snow's adaptive cycle, this study examines the coherence of HRM practices with the strategic capabilities of manufacturing SMEs (n=176) in terms of products, markets, and networks. A principal component factor analysis was first made to reduce the HRM practices into a lesser number of factors. A clustering algorithm was then used to determine three groups of SMEs or Gestalts. Finally, an a posteriori examination of the performance of each group was made.Findings – SMEs align their HRM practices with their realized strategy within three configurations, namely local, international, and world‐class SMEs. Regardless of their strategic choices, these SMEs achieve comparable levels of performance.Research limitations/implications – The Gestalts perspective seems effective in its capacity to describe the role of the HRM fu...

Education, mobility and rural business development

Abstract: Purpose – In a period of rural economic change, knowledge and skills transfers and the generation of new economic opportunities are seen as essential for promoting rural development. The purpose of this paper is to provide evidence of the impact of educated in‐migrants establishing new business activity in rural areas.Design/methodology/approach – The research employs qualitative interviews with rural business owners informed by an earlier postal survey of rural microbusinesses in the North East of England. The interview data are used to explore the implications of owners' past education and work experience for the development of their businesses. The attitudes and networking behaviour of business owners are also explored in order to assess the extent to which social capital facilitates the exchange of valuable knowledge and opportunities between rural businesses.Findings – Data indicate that rural in‐migrants, defined as having moved at least 30 miles as adults, arrive with significantly higher education...

How do not‐for‐profit SMEs attempt to develop a strong brand in an increasingly saturated market?

Abstract: Purpose – The motivation behind this research is to remedy a gap in the literature on the role of branding within small to medium‐sized not‐for‐profit organisations that are not part of the charity or voluntary sector.Design/methodology/approach – To understand the role precisely, a qualitative study based on in‐depth interviews with not‐for‐profit small to medium‐sized enterprises (SMEs) was undertaken. The study identifies how these organisations develop their brands and the role that branding plays within such organisations. Two new models are presented to visually demonstrate the processes – a brand development matrix as a guide to the brand development decision process, and a focal model for the role of branding within not‐for‐profit SMEs.Findings – Significantly, the study finds that employees play an important role as “ambassadors” of the brand. Forging links and working in partnerships were found to be exceptionally valuable in helping the organisations establish “a name” as well as raising awaren...

Schumpeterian versus Kirznerian Entrepreneurship : a comparison of academic and non-academic new venturing

Abstract: – The purpose of this paper is to identify how different modes of resource configuration, entry strategy and product/market characteristics affect new ventures' start‐up processes as well as outcomes in terms of firm growth and revenues., – Case studies of three academic spin‐offs and three non‐academic new ventures are employed as a base for analytical generalisation., – Non‐academic ventures and academic spin‐offs have different bases for their venture creation and follow different strategies to enter their specific markets. Academic spin‐offs are to a larger extent innovative, product‐oriented and enter their target markets employing a technology/science‐push strategy, which requires considerable resources and partner cooperation to manage. The non‐academic ventures, on the contrary, exploit emerging opportunities on the market through a market‐pull strategy relying mainly on offerings already known to the market and building on their own, in‐house resources., – Future research should benefit from investigating factors and conditions affecting different ventures' start‐up process by utilizing qualitative, in‐depth approaches as well as quantitative approaches and a more robust database., – Venture creation processes are not uniform but dependent on situational and contextual factors. Overall, academic spin‐offs come forward as examples of Schumpeterian entrepreneurship characterised by exploration and innovation, while the more “Kirznerian” and non‐academic start‐ups primarily recognise and exploit upcoming market opportunities based on resources they control. The results highlight challenges for nascent entrepreneurs as well as for policy makers supporting new venture creation., – A comparison highlighting critical events, resource configurations and environmental conditions of different start‐up processes depending on the new ventures' origin.

The dyadic bank-SME relationship: Customer adaptation in interaction, role and organisation

Abstract: Purpose – This paper aims to emphasise the theory of adaptation in the analysis of banks’ ability to meet the needs of their SME customers. This analysis involves examining the interaction process ...

To grow or not? Growing small service firms

Abstract: Purpose – The purpose of this paper is to investigate whether entrepreneurs realised their growth aspirations for their service sector businesses after five years. Growth in sales turnover and employee numbers is explored, as well as entrepreneurs' perspectives of how they achieved growth (or why they did not). There have been few examples of longitudinal research which compares entrepreneurs' growth aspirations with actual growth, and fewer still that focus on service businesses.Design/methodology/approach – Twenty‐six entrepreneurs are interviewed in New Zealand in 2001 and re‐interviewed in 2006. Face‐to‐face interviews are used in the first instance, and the follow‐up interview is conducted by telephone.Findings – Twenty‐one entrepreneurs aspired growth in terms of either sales or employees (most aspired growth in both). The majority achieved growth in sales through having a good reputation, attention to customer service, diversification and employing good staff. Fewer entrepreneurs achieved their asp...

Problem solving in small firms: an interpretive study

Abstract: Purpose – The purpose of this research is to present the results of a recent interpretive study of 11 small Central Vancouver Island firms in British Columbia, Canada, which yield new interpretations of the nature of problem‐solving processes within the wider context of managerial capability as a critical contributor to small business survival.Design/methodology/approach – The methodological approach taken is positioned within an emergent body of research in the field of small business and entrepreneurship that applies an interpretive paradigm to uncover the complex facets of how individuals develop their capabilities and management practices with a particular emphasis on the small business owner‐manager. More specifically, the critical incident technique method, along with an approach to data analysis and coding that draws from grounded theory, is combined and applied as a qualitative research strategy to yield new understandings of problem solving in small firms.Findings – Research findings reveal the i...

Growth ambitions and succession solutions in family businesses

Abstract: Purpose – The purpose of this paper is to establish whether succession problems in family businesses contribute to more modest growth aspirations compared to family businesses where succession solutions are gained. It aims to focus especially on transition countries, where studies on this topic are very rare.Design/methodology/approach – The main data source for the study was a telephone survey of 350 small to medium‐sized enterprises (SMEs) in Slovenia. To obtain population estimates, 95 percent confidence intervals were calculated. To test the differences in the case of two independent samples, the t‐test and χ2‐test were used. The general criterion for accepting the hypothesis that differences exist was the statistical signification at the 5 percent level (p< 0.05; two‐tailed).Findings – The research shows that a high proportion of family enterprises in Slovenia are going to face the problem of succession in the near future. Research results also suggest that anticipation of an increase in the number o...

Innovation ecology as a precursor to entrepreneurial growth: A cross‐country empirical investigation

Abstract: Purpose – The purpose of this paper is to examine the governmental, economic, and technological factors contributing to a country's innovation ecology that have an impact on sustainable economic growth.Design/methodology/approach – This paper investigates governmental, economic, and technological supports that comprise the innovation ecology of 34 nations using ordinary least squares, discriminant analysis, and mediated regression. It is proposed that the strength of a country's innovation ecology is associated with greater sustainable entrepreneurial growth opportunities. Innovation indicators and trend analyses were collected from Eurostat Yearbook 2007, Science and Technology, and Global Financial Data over the 1995‐2005 period.Findings – The results reveal that while the influence of government and the economic environment encourage innovation ecology, having resources at the research and development levels, human capital, and early seed funding were key indicators of innovation. The greater the degre...

Incentives to export for Australian export market ventures

Abstract: Purpose – The purpose of this paper is to examine the impact that various incentives to export have on the export marketing performance of Australian export market ventures.Design/methodology/approach – The paper is based on an empirical investigation of firms involved in exporting to foreign countries from Australia. The sample of firms came from a wide cross section of industries. The list of firms comprising the sample is provided by a state government department.Findings – The paper indicates that the export marketing performance of Australian export market ventures is positively influenced by the export incentive of the chance to diversify into new markets.Research limitations/implications – From a methodological perspective, a potential concern may be that the measures are all self‐reported. Consequently, the relationships tested may be susceptible to the influence of common method variance.Practical implications – The importance of diversifying into new markets is identified. Management should cons...

Small enterprise relations with banks and accountants

Abstract: Purpose – Through the dual analysis of small business‐owner relations with their banks and accountants, this paper aims to address conflicting interpretations of how small business owners may optimise their banking relationships.Design/methodology/approach – Site visits were made to 49 small firms which had been recruited from a random sample of 500 New Zealand firms that employed up to 50 full‐time equivalent staff. An interview was then carried out with the owner‐manager of the firm.Findings – The study identifies four bank relationship types: serial switching, independence, relationship chasing, and switched off. Consistent with previous research, dissatisfaction with existing relations is frequent but switching is infrequent. Rather than switch bank, the predominant reaction is to reduce the use of bank services. The disadvantage this creates is offset by the development of a closer relationship with business's accountant.Research limitations/implications – The findings are limited in their ability to...