To be independent or balance interdependence? Policy implications for micro and small enterprises

The purpose of this paper is to identify in what way micro and small firms from low-technology industries which are dependent on foreign companies can ensure that they derive benefits from these relationships and what is more, in what way government policy should support this.

A longitudinal study of a furniture company has been used. The company’s relationship with its large foreign customer is analysed from the perspective of the market-oriented power dependence and the IMP interdependence concept. Additionally the secondary sources of information about Polish furniture industry have been used in order to present its international specificity.

The analysis shows that micro and small firms may derive benefits from their relationships with foreign entities due to their flexibility and the creation of heavy resources based on the standards of cooperation. Policies supporting exports and internationalisation cannot be isolated activities which end with the creation of foreign contacts and initiating transactions. Policy makers should concentrate on the support of the knowledge and experience exchange in terms of maintaining contacts with foreign entities as well as creation of a favourable framework of conditions for companies.

The recommendations may be applied to design a policy supporting micro and small enterprises representing low-technology industries from economies with a limited internal market.

The paper compares the perspective of a market-orientated power-dependency concept with the IMP interdependency approach. This sheds a light by adding an analysis of how to best utilise interdependencies on both sides of the supplier-customer interface. Both opportunities and hindrances resulting from the relationship between small firms and larger foreign companies are highlighted. Thanks to this approach a discussion is conducted in order to illustrate the policy implications of supporting micro and small enterprises from low-technology industries.