Enterprise and Small Business: Principles, Practice and Policy

Mark S. Freel (Department of Management Studies, University of Aberdeen)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 1 June 2000

781

Citation

Freel, M.S. (2000), "Enterprise and Small Business: Principles, Practice and Policy", International Journal of Entrepreneurial Behavior & Research, Vol. 6 No. 3, pp. 177-179. https://doi.org/10.1108/ijebr.2000.6.3.177.1

Publisher

:

Emerald Group Publishing Limited


On the whole, this edited volume constitutes a welcome contribution to the growing corpus of small firm/entrepreneurship textbooks. With regard to first principles, however, the implicitly synonymous use of the words “enterprise”, “entrepreneurship” and “small business” is a weakness of both this and similarly motivated textbooks. Many new and small businesses duplicate existing enterprises and offer little novelty in products, processes or the organisation of production. Indeed, the majority are marginal micro‐enterprises, operating in mature, low value‐added industries (Bhidé, 2000). Such enterprises are set up with limited resources (often small overdrafts, personal savings and/or borrowings from family or friends) and, at best, provide a wage for the principals. Only a minority, typically 4‐5 per cent, make any substantial contribution to economic growth, job creation or the development of new technologies (Storey, 1994). A text which explicitly recognised the difference between the small number of genuine “entrepreneurial firms” and the remaining mass of firms would undoubtedly look very different in parts from this text. The terms “entrepreneurship” and “entrepreneur” are heavily value‐laden. The consequence is a tendency towards rhetoric and platitude. For instance, in chapter 6, it is noted that “[t]he profile of an entrepreneur which emerges ... is one who is intelligent and analytical; is an effective risk manager and networker; possesses a strong set of moral, social and business ethics; exhibits a basic trader’s instinct; and is dedicated to life‐long learning in its many forms” (p. 113). Or, entrepreneurship “... is a very basic human act, practised by ordinary – but at the same time exceptional – members of society, which can be applied to enhance human endeavour in all spheres of life – economic and material, social and immaterial” (p. 114). This is not to suggest that all contributions are marked by this failing of misplaced euphoria; however, in common with many of its contemporaries, the book suffers from something of an identity crisis. Is it a text about small business generally, or about the very best small businesses and, by implication, entrepreneurship specifically?

A further failing of the text is one which is almost inevitably associated with an edited collection of papers – i.e. variable quality. Many of the chapters provide an excellent introduction to their respective topics (and of particular merit are the chapters dedicated to issues of gender, ethnicity, growth, strategy, the enterprise culture, internationalisation, franchising, people and technical entrepreneurship). These chapters are of undoubted value to both students and new researchers. However, an equal number offer a brief, occasionally incomplete introduction to the issue in question, prior to detailing the findings of ad hoc research projects. This fits less well with the objectives of the text and with the requirements of the target audience. Moreover, while the breadth of coverage is remarkable there are some issues notable by either their absence or the paucity of coverage. For example, three chapters (chapters 3, 5 and 6) are essentially given over to issues of culture, while no room is found for the critical issue of innovation. This is particularly puzzling in the light of the recent launch of journals focusing on innovation, enterprise and entrepreneurship and the consistent calls for greater business experimentation throughout industry (ACOST, 1990; DTI, 1998). If the former is taken as a signal of a consensual belief in an inextricable link between innovation, broadly defined, and entrepreneurship, this becomes a more significant omission. Indeed, elsewhere, the importance of industrial innovation is rarely understated by either academics or policy makers. Another topic which arguably receives too little attention is venture capital, both formal and informal sources. While the contribution of such sources of equity funding, to the small business community generally, is limited, they nonetheless occupy a central position in both academic and policy debate (see, for example, Mason and Harrison, 1999; HM Treasury, 1998).

The final criticism of the text is of a somewhat more pragmatic nature and relates to the end of chapter questions/assignments. Here, again perhaps inevitably, there is some overlap and/or duplication. Chapter 4 (“Small business policy, support and governance”), for instance, asks students: “Why should public support be given to the small business sector?” while Chapter 7 (“Business start‐up: theory, practice and policy”) directs students to “Argue the case either for or against the intervention of the government in the small business start‐up process”. These questions differ in their specifics but are overly similar in the general issues raised. However, perhaps more damning, the questions are generally unimaginative and unlikely to stretch or inspire either undergraduates or postgraduates.

On a positive note, it is encouraging to note that the text is emphatically concerned with “knowing about ...” rather than “knowing how to ...” As an area of academic study, the broad topic of entrepreneurship and small business has undoubtedly been blighted by the boom in low‐level, instrumental texts [and courses], which aim at informing students “how to start your own business” or “how to become an entrepreneur”. Irrespective of whether or not the latter goal may be achieved, the effect of such texts and courses is, almost assuredly, simple training programmes, unsuited to the needs and abilities of the bulk of our undergraduate or graduate population. As a knowledge‐based contribution to the discipline (and a generally strong précis of the key issues), this textbook represents a welcome, if not wholly unique, change.

In conclusion, and notwithstanding the above criticisms, this text comfortably fits into the “recommended reading” category, for honours or postgraduate courses about small business – acting as a supplement to David Storey’s “Understanding the small business sector”. Unfortunately, it is neither uniformly well enough written nor sufficiently rigorous to displace Storey’s dating classic. Where introductory courses exist, one can envisage nominating this text as core reading. Some chapters may be ill‐suited to a first level course but, on the whole, and with adequate supporting material, it may provide a useful and accessible introduction. Indeed, for institutions offering, or hoping to offer, full degree programmes in entrepreneurship and small business it is becoming increasingly necessary to introduce students to issues of enterprise earlier in the curriculum.

References

ACOST (1990), The Enterprise Challenge: Overcoming Barriers to Growth in Small Firms, HMSO, London.

Bhidé, A. (2000), The Origin and Evolution of New Businesses, OUP, Oxford.

DTI (1998), Our Competitive Future: Building the Knowledge Economy, White Paper, Cm 4176, HMSO, London.

HM Treasury (1998), Financing of High Technology Businesses: A Report to the Paymaster‐General, November, London.

Mason, C. and Harrison, R. (1999a), “Venture capital: rationale, aims and scope”, Venture Capital, Editorial, Vol. 1 No. 1, pp. 146.

Storey, D. (1994), Understanding the Small Business Sector, Routledge, London.

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