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1 – 10 of 798Sanna Joensuu-Salo, Anmari Viljamaa and Emilia Kangas
This paper aims to examine the growth rates of small- and medium-sized enterprises (SMEs) over a three-year period, the relationship between firm size and firm growth in the…
Abstract
Purpose
This paper aims to examine the growth rates of small- and medium-sized enterprises (SMEs) over a three-year period, the relationship between firm size and firm growth in the context of SMEs, and the effect of marketing capability (MC) on firm growth and how it relates to firm size. The theoretical framework is based on the resource-based view and dynamic capabilities.
Design/methodology/approach
Data were gathered from Finnish SMEs (n = 214) and analyzed with Latent growth curve modeling (structural equation modeling). Respondents were chief executive officers or company owners.
Findings
Results show that firm size is unrelated to the rate of change, and MC has a significant effect on both the intercept and slope parameters. Smaller SMEs have less MC than larger SMEs.
Practical implications
While the overall human resources level of the SME is not linked to the rate of growth, MC is. This is an important point for small business growth studies, for it shows what type of personnel is called for during rapid growth. SMEs could advance significantly and rapidly if they invest in versatile human capital, especially in the marketing area.
Originality/value
Majority of the MC research involves larger corporations. This study brings new insights from SME perspective. In addition, this study suggests that it is imperative to consider different types of growth separately. This study contributes to this need by demonstrating the connection between employee growth rate and MC in SMEs.
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Marikka Heikkilä, Harry Bouwman and Jukka Heikkilä
The purpose of this paper is to analyse how different strategic goals of (micro-, small- and medium-sized firms=SMEs) relate to the business model innovation (BMI) paths that SMEs…
Abstract
Purpose
The purpose of this paper is to analyse how different strategic goals of (micro-, small- and medium-sized firms=SMEs) relate to the business model innovation (BMI) paths that SMEs take when improving their business.
Design/methodology/approach
The authors conducted 11 in-depth case studies involving SMEs innovating their business models (BMs).
Findings
The authors found evidence that strategic goals of SMEs (start new business, growth and profitability) lead them to alternative innovation path in terms of BM components affected. Growth seekers start from the right-hand side of a BM Canvas, while profitability seekers start from the back end, the left side of a Canvas; and new businesses adopt a cyclical approach considering BM components in turn, while at the same time redesigning and testing the BM. The findings of this study also indicate that all three paths gradually lead to improvement in several BM components.
Research limitations/implications
Findings indicate that a strategic management view in which strategic goals define BMI also applies to SMEs. The distinctive BMI paths that the authors identified provide evidence to suggest that, although the SMEs may not have an explicitly formulated strategy, their strategic goals determine the type of improvements they make to their BM. All three SME groups started their improvements from different BM components and changed several elements in their BMs in a specific order, forming distinctive BMI paths. Finally, to understand the BMI in SMEs better, more research is needed into BMI processes and into the way BMI is managed in SMEs.
Practical implications
The findings of this study help SMEs to anticipate the next steps in their path towards an improved BM. By mirroring their approach to the BMI paths, they can better manage their BM makeover process and focus on their innovation activities. For providers of BMI tools and methods, the study indicates which SME innovation tasks could be supported by tools and how the tools should be aligned with the BMI paths.
Originality/value
BMI is attracting growing attention in both research and practice. However, knowledge concerning BMI in SMEs is limited. The authors contributed to BMI research by focussing on the BMI paths of SMEs, i.e. the often sequential, non-linear and iterative steps taken to improve the business by making changes to specific BM components.
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Danilo Brozović, Christian Jansson and Börje Boers
This article investigates how strategic flexibility (SF) is achieved in small and medium-sized enterprises (SMEs), exploring whether SF contributes to firm growth and the…
Abstract
Purpose
This article investigates how strategic flexibility (SF) is achieved in small and medium-sized enterprises (SMEs), exploring whether SF contributes to firm growth and the associated enablers and barriers of SF.
Design/methodology/approach
To offer a more nuanced view of SF in SMEs, a qualitative approach is applied. Researchers conducted and analyzed 91 interviews with owners and chief executive officers (CEOs) of SMEs exhibiting high growth and explored whether SF contributes to firm growth and the associated enablers and barriers of SF.
Findings
The results show a connection between SF and firm growth and confirm the importance of strategic orientation for SF in SMEs. Contrary to the existing literature, this study found a neutral impact of external networks and a positive impact of slack resources on SF. The lack of competent employees emerged as a considerable barrier to SF in SMEs.
Research limitations/implications
More research focusing on the relationship between SF and firm growth is suggested, as well as further research about the relevance of slack resources and external networks as enablers of SF in SMEs.
Practical implications
Motivating and developing valuable employee competence are the key managerial implications. Additionally, business consultants and business developers in the public sector must find ways to increase business consultants and business developers' relevance to SMEs.
Originality/value
This article explores SF in SMEs, a context of disagreement in previous literature, and finds that SF contributes to SME growth. A qualitative approach is used, enrichening a field dominated by quantitative methodological choices.
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Zélia Serrasqueiro, Beatriz Pinto and Filipe Sardo
This study aims to seek to analyse the relationships between profitability, productivity, external debt and growth in SMEs. The authors also analyse firm size and age as…
Abstract
Purpose
This study aims to seek to analyse the relationships between profitability, productivity, external debt and growth in SMEs. The authors also analyse firm size and age as explicative variables of small and medium-sized enterprise (SME) growth.
Design/methodology/approach
In this paper the data were collected for 3309 SMEs for the period 2010–2019. The authors estimate the model using the system generalised method of moments dynamic estimator.
Findings
The results show that after a certain level of profitability, this determinant positively impacts SME growth. Productivity influences positively the firm growth. There is a positive effect of external debt on SME growth, which can be explained by the insufficiency of internally generated funds. The authors obtained a negative signal between size and firm growth, contradicting Gibrat's Law (1931). Moreover, the results suggest that SMEs grow less after a certain age, suggesting that small firms grow less after reaching the minimum scale of efficiency.
Practical implications
For SME owner-managers, this study enhances the importance of profitability and labour productivity for firm growth. For policymakers, the results suggest the need for favourable conditions for SMEs in accessing external finance.
Originality/value
Profitability negatively impacts on SME growth. However, the authors found that above a certain level of profitability, probably, as firms accumulate retained earnings, profitability has a positive effect on SME growth. Moreover, this study shows that labour productivity and debt positively impact on SME growth, evidencing the importance of the availability of financial resources to sustain the growth of these firms.
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The purpose of this paper is to know which growth-impeding constraints are perceived to act upon operations of small- to medium-sized (SME) companies by their owner-managers and…
Abstract
Purpose
The purpose of this paper is to know which growth-impeding constraints are perceived to act upon operations of small- to medium-sized (SME) companies by their owner-managers and to recommend transitionary paths to elevate constraints and increase contribution levels made by SMEs’ operations. To do so, this research has been primarily founded upon Hayes et al.’s (2005) operations contribution model for differentiating between different levels of operations’ contribution, and secondarily on the theory of constraints philosophy to explain the perceptions of constraints found at each level – current and future.
Design/methodology/approach
An open-ended survey and a series of group workshops have gathered new empirical data about these perceptions, which were coded using the relational content analysis to identify a parsimonious set of perceptual growth-impeding constraint categories. The most popular transitions were identified and a correlation of frequency rank orders between “perceived current” and “perceived future” constraints categories was calculated, and likely transitionary paths for growth are discussed. Three SME case studies were documented in related action research to contextualise survey findings.
Findings
The most popular transition was from “neutral” to “leading”. A lack of people capability was perceived to be the most commonly reported growth-impeding constraint category, followed by a combined lack of process competence and product and service innovation, further followed by a lack of skills in information technology automation. In addition, a new conceptual model has been generated inductively to address shortcomings found in the original operations contribution model (Hayes et al., 2005) during its application to UK SMEs. The new model is referred to in this paper as the “Operations Growth Rocket”.
Research limitations/implications
This research only used data from UK SMEs.
Practical implications
This work should help SME owner-managers to overcome growth-impeding constraints that act upon their operations and assist them to develop more effective actions and paths to increase the contribution levels made by their operations. This in turn should support growth of their organisations. Findings will also inform teaching about more effective operations management in SMEs.
Social implications
This work should help UK SMEs to grow, which in turn will strengthen the UK economy.
Originality/value
A novel approach and new data from 208 SMEs modify a classical operations contribution model (Hayes et al., 2005). This is achieved by considering transitionary paths to be meta-categories continua abstracted from constraint categories combined with case data for moving towards higher levels of operations contribution, rather than using discrete growth-impeding and growth-constraining “levels”. This research has inductively generated a new version of the classical contribution model that should be more suitable for stimulating growth in (UK) SMEs.
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Kessington Okundaye, Susan K. Fan and Rocky J. Dwyer
The purpose of this (qualitative, multiple-case) study is to determine how small-to medium-sized enterprise (SME) leaders in Nigeria use information and communication technology…
Abstract
Purpose
The purpose of this (qualitative, multiple-case) study is to determine how small-to medium-sized enterprise (SME) leaders in Nigeria use information and communication technology (ICT) adoption as a business strategy to increase profitability and compete globally.
Design/methodology/approach
The participants for this study consisted of executive-level SME leaders who had the authority to approve ICT implementation within their respective organizations. Individual interviews were undertaken with participants to gain an understanding of their experience of determining the merits of and implementing ICT. The technology acceptance model, which specifies the relationship between perceived usefulness, perceived ease of use, attitude toward computer use and intention to use technology, was applied as a framework to explain the Nigerian SME’s ICT adoption strategies.
Findings
Four major themes emerged from the data analysis: ICT adoption factors, ICT roles and benefits, role of government and SME success factors. The findings of this study may help SME leaders and government leaders address many of the factors inhibiting the adoption of ICT in SMEs in Nigeria.
Practical implications
This study may ensure that SMEs are successful and able to create jobs, which in turn may help to promote socioeconomic development through adoption of ICT.
Originality/value
The findings from this study contribute to the knowledge base regarding factors that affect ICT adoption by SME leaders as a business strategy to increase profitability and compete globally, particularly within SMEs in Lagos, Nigeria. It further addressed the gap in existing literature regarding other factors such as the influence of culture on ICT adoption, cost of ICT implementation, available ICT skills, infrastructure and ICT knowledge gap as the primary impeding factors of ICT adoption in Nigerian SMEs.
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The purpose of this paper is to investigate the impact of customer-focus on small medium enterprise (SME) performance from the perspective of a resource-based view (RBV).
Abstract
Purpose
The purpose of this paper is to investigate the impact of customer-focus on small medium enterprise (SME) performance from the perspective of a resource-based view (RBV).
Design/methodology/approach
This research study implemented a survey strategy to gather data from 255 respondents on the registered list of Ghana Enterprise Agency (GEA) in the eastern region of Ghana. Scales used to gather data were operationalized from previous research studies. A structural equation modeling (SEM) path analysis was used to estimate the impact of customer-focus on the performance of SMEs.
Findings
The outcomes of this study indicate that customer-focus has a significant positive impact on SME performance, hence backing the current demand for investigating the distinct influence of customer-focus on SME performance. The results show that customer-focus has a positive and significant relationship with financial performance, customer performance, internal business process performance and learning and growth performance, thus supporting the literature on the positive impact of customer-focus on SME performance. Therefore, customer-focus determinants used in this study, including co-creation, networking ties, customer insight and artificial intelligence marketing (AIM), are critical to the optimization of SME performance.
Research limitations/implications
Notwithstanding the importance of this research study mentioned earlier, the study has limitations. Notably, the sample size of this study can be increased to capture SME respondents in other geographical zones that were not included in this study. Future research studies may address how business environment conditions moderate the relationship between customer focus and performance, and also the cause-effect of the relationship between customer focus and business environment conditions on SME performance.
Practical implications
The practical implications consist of two main items. First, this study empowers SME owners and managers to develop a customer focus technique as a central strategic goal in their quest for SME performance optimization. Second, SME owners and managers should progressively exploit the four determinants of customer focus which include co-creation, networking ties, customer insight and (AIM in order to accrue important resources for effective utilization of their customer focus competences as a way to enhance their performance.
Social implications
This study is targeted at the sound development of SMEs to bring about poverty alleviation and employment. Poverty, unemployment and poor living standards are recognized as vital social challenges in most emerging economies. The establishment of customer focus as an important strategic capability provides opportunities for SME survival, profitability and growth.
Originality/value
Generally, the findings of this research study provide a strong backing to RBV perspective and the proposition that customer-focus and its determinants (i.e. co-creation, networking ties, customer insight and AIM) should be acknowledged as a vital strategic resource for optimizing the performance of SMEs. This research study also provides new knowledge contribution to the present body of knowledge on customer-focus orientation and management literature, particularly in the context of an emerging economy.
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Pakistan has marvellous growth and development capacity, and entrepreneurial small- and medium-sized enterprises (SMEs) play a key role in its development. As it is believed that…
Abstract
Purpose
Pakistan has marvellous growth and development capacity, and entrepreneurial small- and medium-sized enterprises (SMEs) play a key role in its development. As it is believed that entrepreneurial SMEs make an important contribution to the economy by providing employment and soaring production capacity, the purpose of this study is to investigate the hurdles that affect their performance.
Design/methodology/approach
A questionnaire-based survey was used to collect data from 225 entrepreneurial SMEs owners and managers in the southern region of Pakistan. Statistical analysis in SPSS was conducted to determine the barriers that limit the growth and development of SMEs.
Findings
The findings show that factors affecting entrepreneurial SMEs’ performance in Pakistan are lack of finance and infrastructure as well as economic barriers, corruption and management issues. These obstacles are positively and significantly associated with entrepreneurial SMEs’ failure.
Originality/value
This study’s significance lies in its identification of the barriers that affect the performance of entrepreneurial SMEs in Pakistan. The author also suggests how policymakers can devise better policies for SME growth.
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Barbara Orser, Xiaolu (Diane) Liao, Allan L. Riding, Quang Duong and Jerome Catimel
This paper aims to inform strategies to enhance public procurement opportunities for women-owned small- and medium-sized enterprises (SMEs). To do so, the study examines two…
Abstract
Purpose
This paper aims to inform strategies to enhance public procurement opportunities for women-owned small- and medium-sized enterprises (SMEs). To do so, the study examines two research questions: To what extent are women-owned enterprises under-represented among SME suppliers to government; and Do barriers to public procurement – as perceived by SME owners – differ across gender?
Design/methodology/approach
The study draws on the resource-based view (RBV) of the firm and on theories of role congruity and social feminism to develop the study’s hypotheses. Empirical analyses rely on comparisons of a sample of 1,021 SMEs that had been suppliers to government and 9,376 employer firms that had not been suppliers to government. Data were collected by Statistics Canada and are nationally representative. Logistic regression analysis was used to control for systemic firm and owner differences.
Findings
Controlling firm and owner attributes, majority women-owned businesses were underrepresented as SME suppliers to government in some, but not all sectors. Women-owned SMEs in Wholesale and Retail and in Other Services were, ceteris paribus, half as likely as to be government suppliers as counterpart SMEs owned by men. Among Goods Producers and for Professional, Scientific and Technical Services SMEs, there were no significant gender differences in the propensity to supply the federal government. “Complexity of the contracting process” and “difficulty finding contract opportunities” were the obstacles to contracting cited most frequently.
Research limitations/implications
The limitations of using secondary analyses of data are well documented and apply here. The findings reflect only the perspectives of “successful bidders” and do not capture SMEs that submitted bids but were not successful. Furthermore, the survey did not include questions about sub-contractor enterprises, data that would likely provide even more insights about SMEs in government supply chains. Accordingly, the study could not address sub-contracting strategies to increase the number of women-owned businesses on government contracts. Statistics Canada’s privacy protocols also limited the extent to which the research team could examine sub-groups of small business owners, such as visible minorities and Indigenous/Aboriginal persons. It is also notable that much of the SME literature, as well as this study, define gender as a dichotomous (women/female, men/male) attribute. Comparing women/female and men/males implicitly assumes within group homogeneity. Future research should use a more inclusive definition of gender. Research is also required to inform about the obstacles to government procurement among the population of SMEs that were unsuccessful in their bids.
Practical implications
The study provides benchmarks on, and directions to, enhance the participation of women-owned SMEs or enterprises in public procurement. Strategies to support women-owned small businesses that comply with United Nations Sustainable Development Goals are advanced.
Social implications
The study offers insights to reconcile economic efficiency and social (gender equity) policy goals in the context of public procurement. The “policy-practice divides” in public procurement and women’s enterprise policies are discussed.
Originality/value
The study is among the first to use a feminist lens to examine the associations between gender of SME ownership and public procurement, while controlling for other salient owner and firm attributes.
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Karen Handley and Courtney Molloy
This paper takes a structured literature review (SLR) approach to identify gaps in the literature and suggest future research opportunities. It focuses on corporate governance…
Abstract
Purpose
This paper takes a structured literature review (SLR) approach to identify gaps in the literature and suggest future research opportunities. It focuses on corporate governance (CG) performed outside the formal board of directors’ structure and examines research of alternative CG of small and medium-sized entities (SMEs).
Design/methodology/approach
The authors use the SLR method to search the Scopus database, extracting and synthesising findings relating specifically to SMEs’ CG. These are tabulated and described using bibliometric software.
Findings
The authors highlight an absence of tailored theoretical approaches to understanding CG in SMEs, which differs from the governance of larger entities. They also find evidence of alternative governance structures in SME CG.
Research limitations/implications
Further research should embrace management and other theoretical perspectives and expanded methodologies, nuances in understanding offered in contextualised settings and awareness of practical implications to better understand the specific setting of CG in SMEs.
Practical implications
SMEs seek to access the scarce resources and skills external to their formal CG structures. Regulators and resource providers should mobilise facilitation and training for this expansion.
Originality/value
The authors synthesise a large body of literature to extract findings specific to SMEs. A unique contribution is our focus on alternative forms of CG in SMEs. Evidence of alternative boards points to resolutions for human capital shortages in SMEs.
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