Emerald | Journal of Small Business and Enterprise Development

The hologram effect in entrepreneurial “social commercial” enterprises: Triggers and tipping points

Denise Crossan, Pat Ibbotson, Jim Bell — 2011-10-25 00:00:00.0

Abstract

Purpose – The paper's purpose is to present qualitative findings describing entrepreneurial differentiations between non-profit organisations along a social economic continuum. The paper aims to focus on those non-profit organisations classified as “social” and those more entrepreneurial behaving organisations classified as “social commercial”. Design/methodology/approach – The data were taken from recent research examining current classification systems and performance measurement indicators applied to not-for-profit and for-profit organisations in an Irish regional context. Having reviewed the extant literature on classification systems and measurement indicators for non-profit organisations, the social economic continuum model and theoretical measurement framework were developed. In order to test the models, the study employed a pragmatist mixed methodological approach; employing quantitative surveys and in-depth interviews. Findings – The paper presents key entrepreneurial differentiating themes between “social” and “social commercial” organisations, and discusses the triggers that produce a “hologram” effect or style of management in the third sector. Practical implications – The identification of entrepreneurial themes allows for the analysis of the non-profit organisations from overly social in their activities and presentation, to overly economic in their behaviour. It allows for a greater understanding of the management processes employed by non-profit organisations to create social value and meet their social aims and purpose. Originality/value – The paper carries out a unique inter-sector comparison of non-profit organisations to determine entrepreneurial differentiations amongst non-profit businesses employing entrepreneurial methodologies and behaviours to achieve social good.

The influence of an entrepreneur's socio-cultural characteristics on the entrepreneurial orientation of small firms

Levent Altinay, Catherine L. Wang — 2011-10-25 00:00:00.0

Abstract

Purpose – This paper seeks to examine the relationship between Turkish ethnic entrepreneurs' socio-cultural characteristics (namely education, experience and religion) and the entrepreneurial orientation of their firms. Design/methodology/approach – The study collected data through 139 face-to-face structured interviews with Turkish ethnic entrepreneurs in London, UK. Findings – The study illustrates that educational attainment of an entrepreneur makes a positive impact on a firm's entrepreneurial orientation. Educational attainment equips business owners with the skills and reflective mindsets of understanding customers and responding to their needs. Previous business experience of the entrepreneur also impacts positively upon a firm's entrepreneurial orientation, while religion of the entrepreneur does not have a significant impact on the firm's entrepreneurial orientation. Research limitations/implications – This paper reports findings based on Turkish ethnic entrepreneurs in London. Therefore, care should be taken in making generalisations from the sample. Practical implications – This paper identifies those socio-cultural attributes that entrepreneurs can capitalise on in order to enhance the entrepreneurial orientation of their firms. Originality/value – The paper fills in a glaring gap by providing empirical evidence about the relationship between socio-cultural characteristics of entrepreneurs and their small firms' entrepreneurial orientation.

The impact of product management on SME performance: Evidence from Canadian firms

David C. Roach — 2011-10-25 00:00:00.0

Abstract

Purpose – The purpose of this paper is to examine the impact of product management as a set of organizational capabilities. It aims to investigate product management as a set of boundary spanning capabilities, by empirically relating these to firm performance. Design/methodology/approach – A measurement instrument is developed and validated based on the extant product management literature. Using a heterogeneous sample of 63 Atlantic Canadian SMEs in the manufacturing and professional/technical services sectors, data are collected to test the survey instrument and establish preliminary construct validity. Findings – Both firm performance and product management measures demonstrate internal consistency. Several product management sub-constructs demonstrated reliability and in some cases validity, substantiating the product management literature. These included product pricing, sales support and forecasting. Research limitations/implications – This research builds upon the literature and indicates that a relationship exists between product management capability and firm performance. This leads to the conclusion that product management, as a set of boundary spanning firm capabilities, warrants future research with a larger more homogeneous population. Limitations include geographic bias, treating the population as homogeneous and lack of relationship to established firm orientations. Practical/implications – This research may have practical significance and managerial implications, based on the relationship between product management capabilities and firm performance. This could lead to an increased understanding of how to allocate scarce resources in order to improve performance. Originality/value – The paper introduces the concept of boundary spanning, product management capabilities and their relationship to firm performance, by providing preliminarily validation of a measurement scale for product management capabilities of small to medium-sized enterprises.

An empirical investigation of the financial growth lifecycle

Ciarán Mac an Bhaird, Brian Lucey — 2011-10-25 00:00:00.0

Abstract

Purpose – This paper aims to empirically examine the financing of small and medium sized enterprises (SMEs) through a financial growth lifecycle model. Design/methodology/approach – Data in publicly available databases are generally unsuitable to examine the financial lifecycle model, thus a questionnaire survey was employed to collect data. Because of the well-documented reticence of SME owners to reveal detailed financial information, data were requested in percentage form. This innovative methodology was successful, as 92 per cent of respondents disclosed detailed financing data. A response rate of 42.6 per cent across six industry sectors provided data to employ parametric techniques. Reporting and analysing the large primary data set across six age categories, a number of statistical tests were conducted to test the financial growth lifecycle model. Findings – Analysis of respondents' capital structures across age groups indicates distinct changes in sources of finance employed by firms over time. Financing choices are consistent with Myers's pecking-order hypothesis, and the importance of profitability in financing SMEs is emphasised. Contrary to conventional wisdom, respondents in the youngest age category report a relatively high use of debt financing. This is explained by the provision of firm owners' personal assets to secure firm debt. Originality/value – The key contribution of this paper is to provide an empirical examination of the financial growth lifecycle model by combining a number of statistical tests. This approach is significantly different to that traditionally adopted in empirical investigations of SME financing, which is to examine the applicability of theories developed in corporate finance on panel data. Additionally, the paper presents data on personal sources of finance employed by firm owners, which is typically not available, even in comprehensive secondary databases.

Size matters: the late payment problem

Salima Y. Paul, Rebecca Boden — 2011-10-25 00:00:00.0

Abstract

Purpose – The supply of trade credit by small- to medium-sized enterprises (SMEs) is the product of both customer demand and the possibility of strategic advantage, but is subject to risk. In the current financial climate the demand for trade credit may be heightened, leading to further increased risk. This paper seeks to evaluate current risk mitigation measures in the UK and considers how these might be improved. Design/methodology/approach – The supply of and demand for trade credit and the inherent risks are explained by reference to the literature. Then, using both the academic and grey literature and data from a large-scale questionnaire, the paper highlights the limitations of both regulatory and management approaches to mitigate the risks in the context of UK SMEs. Finally, the paper considers the prospects for improved management. Findings – Trade credit may be a product of market demand or a desire to extract strategic advantage. Both regulatory measures and internal management regimes have failed to mitigate risks in the UK for SMEs extending trade credit. Practical implications – The paper concludes that current UK regulatory regimes are unlikely to prove effective and that better management of trade credit may be imperilled by the power imbalances between SMEs and larger firms. The paper suggests areas for the improvement of trade credit management under the headings of policies, people, processes and practices within SMEs. Originality/value – The paper demonstrates why, despite the risk, UK SMEs offer trade credit and consider how those risks might be mitigated.

The role of multi-ethnic workforces in the internationalisation of SMEs

Alexander Mohr, Gonzalo E. Shoobridge — 2011-10-25 00:00:00.0

Abstract

Purpose – The purpose of this paper is to highlight the importance of ethnic workforce diversity for the internationalisation of small- to medium-sized enterprises (SMEs). Using the resource-based view, it is argued that an ethnically diverse workforce can help SMEs in overcoming barriers to internationalisation and increase the degree to which they benefit from globalisation. Design/methodology/approach – This is a conceptual paper using the resource-based view (RBV) of the firm to investigate the importance of work force diversity. Findings – The paper identifies a series of mechanisms that link ethnic workforce diversity to increased internationalisation of SMEs as well as a range of contingencies of this relationship. It calls for a stronger appreciation of individual employees' external, co-ethnic networks and knowledge as a hitherto largely ignored resource in the initiation, management and expansion of SMEs' international operations. Research limitations/implications – The findings of the paper have implications for research and practice by shedding light on the importance of this so far largely neglected phenomenon. The findings are limited in as far as they are yet to be tested empirically. Practical implications – The paper provides a framework of mechanisms that can sensitise practitioners with regard to the importance of workforce diversity for internationalisation activities as well as human resource management practices. Originality/value – The paper addresses an issue that is shown to be of increasing importance to SMEs, but has so far been largely neglected in research on SMEs.

Owner-managers' perceptions of barriers to innovation: empirical evidence from Turkish SMEs

Dilek Demirbas, Javed G. Hussain, Harry Matlay — 2011-10-25 00:00:00.0

Abstract

Purpose – The paper aims to examine the barriers to innovation, as perceived and experienced by owner-managers of Turkish small and medium-sized enterprises (SMEs). Design/methodology/approach – The paper is based on an empirical investigation of 224 SMEs operating in Turkey. Emergent results were analysed using a logit regression model to explore barriers to innovation as perceived and experienced by these owner-managers. Findings – The results reveal that a lack of government research and development policy represents a formal barrier to SME innovation in Turkey. The existence of a sizeable and thriving underground economy in this country acts as an informal barrier that impacts negatively upon investment in, and increases the cost of innovation in SMEs. In addition, a lack of appropriate sources of finance and skill shortages emerged as significant variables to affect the innovation decisions of SME owner-managers in Turkey. Research limitations/implications – The research sample of 224 businesses, chosen from a population of approximately two million SMEs in Turkey, is relatively small and is not representative of all regions and urban areas in this country. Therefore, this research sample is not a random or statistically significant selection of Turkey's SME sector. The findings of this research have implications for policy makers, practitioners and academics in this and similar countries. Originality/value – The results of this study contribute to a better understanding of the actual and perceived barriers to innovation experienced by owner-managers of Turkish SMEs. Development of effective government policies to support innovative SMEs could significantly enhance the competitiveness of the Turkish economy.

Small firm marketing: synthesising and supporting received wisdom

Aodheen O'Donnell — 2011-10-25 00:00:00.0

Abstract

Purpose – It is acknowledged that while there is a paucity of marketing research focusing on small firms relative to larger firms, a significant contribution to this field has been made in recent years. However, while such research has proved useful, it remains quite disparate, and gleaning a current understanding of how small firms market their goods and services, is difficult. This paper aims to produce an empirically validated framework of small firm marketing activities. Design/methodology/approach – A qualitative cross-sectoral study of small firm marketing was undertaken. Semi-structured, in-depth interviews were conducted with 30 small firm owner-managers. A literature derived, conceptual framework provided the basis for the interview guide. Findings – The study confirmed that the nine key themes highlighted by a critical review of the literature represented the marketing practices in small firms. It offered some refinement to specific characteristics and activities within the themes and so offered an empirically supported model of small firm marketing. Research limitations/implications – It is hoped that future research can use the framework as a means of demonstrating how various factors contribute to small firm marketing activities and indeed, offer further refinement and embellishment of the overall framework. This framework represents a baseline against which the effects of newly emerging phenomena can be assessed. Originality/value – While much research has been undertaken in the field of small firm marketing, few attempts have been made to address the question: what are the key marketing activities in which small firms engage? This paper addresses this question and offers a flexible, cross-sectoral representation of marketing practices in small firms.

Horizontal inter-firm cooperation in Ethiopian small and medium enterprises: Evidence from leather shoe manufacturing firms in Addis Ababa

Worku Tuffa Birru — 2011-10-25 00:00:00.0

Abstract

Purpose – The purpose of this paper is to explore the nature of cooperative relationships among competing firms by highlighting the purpose for, and the degree of cooperation in, different areas of joint activities. It also aims to examine factors fostering or hindering cooperation between competing firms. Design/methodology/approach – The data used in this study were collected from September 2007 to February 2008 from 100 small and medium-sized leather shoe manufacturing firms operating in Addis Ababa, Ethiopia. Findings – The study result shows that most firms operate not in isolation, but in collaboration with other firms at the same stage of a value chain. They use cooperation with other firms primarily for accessing financial and tangible resources that are essential for plugging gaps in internal capabilities. While geographical proximity of firms facilitated by kinship and regional background of families foster cooperative relationship; negative perception to competition and lack of trust to partner firms are factors that hinder effective cooperative relationship among competing firms. Practical implications – The study has important implications for governments and enterprise support organizations that seek to enhance competitiveness of small to medium-sized enterprises (SMEs) through horizontal inter-firm cooperation in Ethiopia, and elsewhere in sub-Saharan Africa. Originality/value – There are very few Ethiopian studies that have focused on horizontal inter-firm cooperation. This paper, therefore, contributes to the body of knowledge by looking deep into the purpose for, and degree of cooperation, as well as factors fostering or constraining the emergence and sustainable continuation of alternative forms of cooperative relationship among competing SMEs in Ethiopia.

Business support in sport: strategy or serendipity?

Karen Bill, Clare Rhoden — 2011-10-25 00:00:00.0

Abstract

Purpose – As a generalisation, the sports industry is a multifaceted, complex and diverse industry, perhaps making it difficult to offer business support and advice. This paper aims to identify and analyse, through sport and recreation business owners, their experience of business support and advice. The study can therefore be seen as contributing to related studies by Mole et al. and responding to Pawson and Tilley's request for a more nuanced view of how public-support programmes work. Design/methodology/approach – A qualitative, collective case study design is adopted. Three in-depth semi-structured interviews with Directors of Sport Businesses were undertaken to identify business support in the West Midlands Sports sector. Interviews focused on business development, the support and advice directors received and the future direction of their business. Interviews were analysed using inductive and deductive content analysis. Findings – The findings from the case studies highlight a variety of general support and advice mechanisms, e.g. Women's Business Development Agency, with differences in regional provision evident. One strong emerging theme indicates that specialised business support occurs which appears critical but ad hoc. Originality/value – This paper considers the specific business support needs in a largely unreported, yet growing sports sector (based upon a demand led inquiry) into existing providers and business recipients. These findings are pertinent for various organisations such as policy makers, small business support agencies, as well as sports businesses themselves; as they seek to both identify specific sector support needs and evaluate existing practice.

Editorial

2011-10-25 00:00:00.0