Journal of Small Business and Enterprise Development

Education, mobility and rural business development : Table of Contents

Gary Bosworth — Sat Nov 07 08:00:18 GMT 2009

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 qualifications than their local business-owning counterparts. It also indicates that those with higher levels of education are most likely to engage with networking groups and business advice providers. This leads to the conclusion that as well as bringing higher levels of human capital, the integration of in-migrants into local economies is indirectly increasing the potential levels of human and social capital across the rural economy. Originality/value – The research highlights important data concerning the levels of education among in-migrants and local business owners. It continues by developing theoretical explanations about the way that a business owner's background can influence their business activity. This raises awareness of the diversity of skills and networks among rural business owners that are enhancing the stocks of human and social capital in the rural economy.

The revenge of the gifted amateur … be afraid, be very afraid … : Table of Contents

Lisa Harris, Alan Rae — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of the paper is to demonstrate the characteristics and impact of “gifted amateurs” who are maximising the potential of Web 2.0 technologies to grow their businesses creatively and in a cost-effective manner. They are “punching above their weight” in their dealings with larger competitors who are less exposed to these new skills and more restricted in their structures. Design/methodology/approach – A total of 378 small businesses in the South East of England are surveyed and 30 detailed empirical case studies charting the activities of these “early adopters” of Web 2.0 tools are developed. Findings – Proactive “gifted amateurs” can systematically raise their profile through blogging, networking and judicious use of search engine optimisation techniques. They are competing effectively against larger organisations by applying network effects to their marketing activities, often circumventing the need for increasingly complex IT systems by continuing to rely upon cost-effective Web 2.0 tools and their own networking skills as the business grows. Practical implications – Technology has now developed to the point where the entry costs and barriers to remote and collaborative working have disappeared. “Gifted amateurs” can acquire new online marketing skills and secure IT systems, plus the ability to network and collaborate globally if necessary on knowledge projects, by creating virtual (and even disposable) organisations without having to commit themselves to a traditional IT infrastructure. Therefore they can avoid reliance on IT suppliers and grow their businesses in more flexible ways. Originality/value – By recording the characteristics and experiences of these early adopters, this paper is one of the first to document the significant changes in business growth patterns and priorities that these tools are starting to facilitate.

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

Michael F. Walsh, John Lipinski — Sat Nov 07 08:00:18 GMT 2009

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 marketing must gain a seat at the management table. Although marketing departments are responsible for marketing the firm's products and services, the job of marketers themselves internally remains unclear. Marketing departments must do more to ensure that marketing's voice is heard when key decisions are made. Originality/value – This research fills a gap in the literature relating to the influence of marketing in SMEs. More importantly, the findings differ from conclusions raised by a similar study conducted for larger firms.

The relationship between the manager and growth in small firms : Table of Contents

Svante Andersson, Joakim Tell — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – 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. Design/methodology/approach – 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? Findings – 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. Research limitations/implications – 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. Practical Implications – 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. Originality/value – 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.

Training in Thai SMEs : Table of Contents

Kitiya Thassanabanjong, Peter Miller, Teresa Marchant — Sat Nov 07 08:00:18 GMT 2009

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 investment in training was relatively low. Originality/value – This is the first systematic study, to the best of the authors' knowledge, dealing with training in Thai SMEs. This paper encourages debate on the presumed universality of training and argues that academics need to “go back to basics” to understand training in family run SMEs, particularly in developing nations such as Thailand, and to recognise the utility of OTJ training in this context.

The determinants of equity needs: size, youth or innovation? : Table of Contents

Valeria Venturelli, Elisabetta Gualandri — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to set out to critically review the approaches developed for the assessment of the equity gap, extending the quantitative approaches to the equity gap and developing a demand-side model that allows accurate prediction of the future demand for equity. Design/methodology/approach – The first part of the paper deals with financial constraints for innovative SMEs and the possible existence of an equity gap. The next step concentrates on calculating the additional amount of equity needed in order to finance the expected growth in sales. Findings – With regard to the approaches developed to estimate the scale of the equity gap, our main finding is that demand-side analysis is the least well developed. Through the application of an original model to a sample of Italian firms, we find that the degree of innovation cannot be considered the main discriminating factor when it comes to the differences in equity requirement per unit of marginal sale; the analysis reveals the pivotal role played by the enterprise's year of foundation. Research limitations/implications – The empirical data considered in this paper are from a large database that does not cover the period before the company starts to sell its goods on the market; moreover, the estimation of the amount of equity needed cannot be considered explicit evidence of an equity gap problem, since the gap itself implies an unfulfilled demand for additional sources of finance, only measurable in qualitative terms. Practical implications – The research will be of interest to policy makers and practitioners in defining appropriate mechanisms for bridging the equity gap for SMEs. Originality/value – The attempts to quantify the scale of the equity gap at the international level have been limited by the availability of data. As a result, they have tended to be largely qualitative, and their conclusions anecdotal. The model presented here allows precise prediction of the future demand for equity: the results could indirectly confirm that there is indeed a gap in the availability of risk capital for SMEs.

Entrepreneurship: an organisational learning approach : Table of Contents

Mário Franco, Heiko Haase — Sat Nov 07 08:00:18 GMT 2009

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 identified and included in the model: intuiting and interpreting, external motivation, alertness and creativeness. The paper concludes with some theoretical ideas on what may influence the entrepreneur's learning and which entrepreneurship educators are suitable for empirical evaluation in future research.

What do UK small and medium sized enterprises think about employing graduates? : Table of Contents

Adrian Woods, Charles Dennis — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The UK government is committed to increasing the proportion of young people entering higher education. This means that graduates will make up a greater proportion of the labour market. To some extent, this applies to all businesses, but will particularly affect small and medium sized enterprises (SMEs), that have traditionally employed a lower proportion of graduates. Accordingly, the purpose of this paper is to help universities understand better what they could do to both prepare their graduates for jobs in small firms and to help them communicate better with small firms. Design/methodology/approach – The empirical findings are based on a telephone questionnaire survey of SMEs (n=396), drawn from a range of sectors. Findings – The findings indicate that, dependent on: the size of the firm, the proportion of graduates currently employed, the sector that the firm is in, its location and the role played in the organisation by the respondent, the firm's attitude towards employing graduates can be explained reasonably well. Overall, while nearly 60 per cent of respondents reported that their firm needed graduates, only 22 per cent felt that the graduates they had seen were well prepared for the world of work. Research limitations/implications – The study is limited on account of the difficulty of obtaining a representative sample of SMEs across all sectors and geographical areas. The main implication is that universities need to work much harder in convincing smaller firms with a low percentage of graduates already working to take on graduates, especially when the owner-manager is the key decision maker with respect to the employment decision. Further, universities in the London area have a much more difficult job in building relations with firms than those in other locations. Originality/value – The main value of the paper is in opening a window on what SME employers think about employing graduates.

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

Lars Silver, Fatima Vegholm — Sat Nov 07 08:00:18 GMT 2009

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 between the two parties, determining how the role of bankers is perceived and studying how banks as organisations function. Design/methodology/approach – In the study a total of 60 interviews are conducted, of which 45 are conducted with SME owners. For this specific study, data drawn from in depth interviews conducted with SME owners and with bankers are presented. Findings – The following main factors affect the adaptation process and can help explain the difficulties of banks to adapt to their SME customers: the lack of communication and contact in the interaction process, the lack of knowledge and competence of individual bankers as regards their customers' specific businesses and the centralised and standardised system that prevails within the banking organisation. Also, in this study it is found that the organisational structure influences how individual bankers perceive themselves and their ability to adapt to the needs of SMEs, which in turn affects the individual bankers' adaptability when interacting with their SME customers. Originality/value – To the best of the authors' knowledge, adaptation has not been examined in relation to the concepts of interaction, role and organisation, or within the banking industry.

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

Karise Hutchinson, Emma Fleck, Lester Lloyd-Reason — Sat Nov 07 08:00:18 GMT 2009

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 findings also highlight an overall negative experience and perception of government support in assisting smaller retailers to overcome these barriers and aid expansion outside the UK. Originality/value – The findings of this study provide important insight into the perceived and actual barriers encountered by retail SMEs. On one hand, the focus on SMEs provides fresh evidence to the retail internationalization literature, which has focused primarily on the barriers faced by large multinational retailers. On the other hand, the context of this study, yields new insight into research conducted in the field of SME internationalization, which has to date ignored smaller firms in the retail industry. The findings of this study also allow for recommendations to be made to both owner-managers and government organizations.