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The aims of the paper are three‐fold: first, to analyse how small and micro firms finance themselves; second, to investigate what their financing preferences are; and third, to explore their opinions on how they evaluate the financing sources and the various obstacles they face in accessing those sources.

The paper uses a sample of Greek small and micro firms, which cover 99.6 per cent of the total number of firms operating in Greece. The data are derived from the answers in a structured questionnaire.

The main conclusions are as follows. Regarding equity financing, firms rely heavily on their own funds and would not raise new equity from sources outside the family; thus, there is a reluctance to use new outside equity (venture capital, business angels, etc.). Regarding debt financing, firms denoted that they would use more debt, specifically long‐term debt, than they currently do. Thus, there are limitations in accessing long‐term debt financing. Regarding grant financing, micro and small firms should be better informed and encouraged more to participate in state grants and co‐financed programs; thus, there is an informational gap in grant financing.

The paper uses a sample of Greek micro and small firms and a survey methodology to tackle the lack of quantitative published data for most small firms in Greece. It incorporates distinct sources of funds that are very important for small firms (family funds, grants provided by the state and micro‐loans). It investigates preferences, not just practices.

The purpose of this paper is to analyze the effect of different reorganization actions on long‐term financial performance of reorganizing small entrepreneurial firms in Finland.

An structural equation model estimated by partial least squares is applied to survey data from 98 reorganizing very small firms to analyze the effect of organizational change (OC), financial reorganization, management control system change (MCSC), and management accounting change (MAC) on performance.

Evidence supports three of the seven research hypotheses. Debt restructuring has a positive effect on performance. Liquidation of assets and OC do not show a significant direct effect but OC has a positive total effect. MCSC has a positive effect whereas the effect of MAC is negative. Compatibility of reorganization actions with the confirmed reorganization plan affects positively performance.

The sample is small. In further studies, larger samples should be used. Effect of reorganization on performance is self‐assessed by the firms. Further studies should apply more objective measures. The constructs of variables are intended for larger firms. New constructs should be developed for very small firms.

It is important that reorganization administrators and consultants prepare a careful reorganization plan to be followed during the program. In small reorganizing firms, it is beneficial to develop management control systems. However, one should be cautious when developing formal management accounting systems for very small firms.

This paper is the first one developing a structural model of the effects of reorganization actions on performance of small firms. It brings new evidence on the effects of organizational and control system change.

This chapter studies the effect of increasing formality via tax reduction and simplification schemes on micro-firm performance. We develop a simple theoretical model that yields two intuitive results. First, low- and high-ability entrepreneurs are unlikely to be affected by a tax reduction and therefore, the reduction has an impact only on a segment of the micro-firm population. Second, the benefits to such reduction, as measured by profits and revenues, are increasing in the entrepreneur's ability. Then, we estimate the effect of formality on the entire conditional distribution (quantiles) of revenues using the 1996 Brazilian SIMPLES program and a rich survey of formal and informal micro-firms. The econometric approach compares eligible and non-eligible firms, born before and after SIMPLES in a local interval about the introduction of SIMPLES. We develop an estimator that combines both quantile regression and the regression discontinuity design. The econometric results corroborate the positive effect of formality on micro-firms’ performance and produce a clear characterization of who benefits from these programs.

The purpose of this paper is to frame the potential benefits of lean dynamic performance management (PM) systems for small and micro-enterprises. Such systems may exploit the entrepreneur’s tacit knowledge and build on managerial competencies, by incorporating individual attributes into organisational routines.

The paper suggests the use of insight models based on the combination of lean PM tools and system dynamics (SD) modelling. Based on a number of exemplary cases, the paper discusses the potential benefits of these models, in respect to four specific contexts: artisan, new company start-up, established firm and micro-giant company. Related to such contexts, the research identifies: needs or priorities, and obstacles or impediments to pursuing business survival and development.

The conceptual framework discussed in the paper discloses a quite original empirical basis to outline lean dynamic PM systems that may provide entrepreneurs with a set of key-performance drivers that help them to prioritise action, in each of the four analysed contexts.

Growing interest in adopting lean PM models in small and micro-firms appears in the recent PM literature with research highlighting strengths and shortcomings. However, few attempts have been produced to overcome such limitations, while the adoption of SD is relatively new in supporting lean PM system design.

The purpose of this paper is to investigate the technical efficiency (TE) of micro and small enterprises (MSEs) and its determinants in the Indonesian manufacturing sector covering comprehensive subsectors.

This research uses the data from the micro and small industry survey sourced from the Indonesian Bureau of Central Statistics for the period 2010–2015. The TE is estimated using data envelopment analysis (DEA) with bootstrapping approach. The TE is also estimated at the firm-level survey data, classified at the five-digit level of the International Standard Industrial Classification system. In addition, a truncated regression model is applied to estimate the effects of the determinants on the TE.

This research finds that there is a low average TE of the MSEs for the subsectors investigated. It is also found that the TE is associated with firm size, location, export orientations on domestic and world markets, firm age, level of technology, and owner education.

The literature investigating the TE of the MSEs and its determinants is still rare in Indonesia. Most of the previous research limited the studies for specific subsectors and/or specific small regions. Therefore, this research has a contribution in measuring the TE of the MSEs for comprehensive subsectors as well as its relation with the determinants in the Indonesian manufacturing sector. Also, the DEA with bootstrapping approach is applied to estimate the TE of the firms based on each relevant subsector, which is rare in the previous research of the Indonesian MSEs.

Examines the general macroeconomic crisis of the Venezuelan economy outlining its recent history and the seriousness of the present situation and points out how this crisis is especially serious for small firms. Presents information on the current state of small firms in Venezuela ‐ their importance in the economy and the current policy towards them. Points to the historical strategy of running the Venezuelan economy with the emphasis being on large state organizations, and emphasizes the neglect of a coherent and consistent policy for small firms, especially those in the informal sector. By way of contrast, looks at SMEs in the EU, their role in the economy and policy towards them. Finally reflects on some similarities between the EU and Venezuelan small firms. Emphasizes that the EU policy orientation towards the creation of a fairer competitive environment within which SMEs can flourish has much to offer Venezuela (and other less developed countries) which wish to develop more favourable internal conditions for small firm development.

The purpose of this exploratory research is to analyse the marketing activities of software companies in the UK educational software sector. The paper aims to explore the marketing environment and to investigate whether there are differences in experiences, attitudes and approaches between different sizes of firms.

Semi‐structured, in‐depth interviews were undertaken with key respondents who had responsibility for marketing, marketing managers or owner/managers. Themes were identified alongside contextual social and organizational effects.

The marketplace is dominated by several large firms and heavily influenced by government. Overall, five factors were identified that were experienced by all businesses in the sector: challenges in identifying the “customer”; school's budgetary constraints; the IT competence of teachers; the importance of word‐of mouth recommendations; and, the use of partnerships. Differences between small and large firms centred on: understanding of competitive structure; perception of their business's marketing strengths; and, approaches to communication and interaction with customers.

Proposals for further research are offered.

The paper offers a profile of the educational software marketplace and indicates that a number of marketing issues similarly have an effect on all businesses. Differences in behaviour and attitudes are associated with company size and respondent professional/work expertise. In particular, smaller businesses tend to be customer oriented, but often not market oriented.

This paper aims to provide an original picture of a selection of human resource management (HRM) activities in the micro, small and medium sized enterprises (SMEs) in Hungary and to explore the extent to which these activities can be related to variations in firm size and variations in firm performance.

The study measures the presence or absence of a selection of HRM activities through a questionnaire survey of a large sample of 678 Hungarian SMEs.

Hungarian SMEs, in their working relationships, are closer to the “happy family” model of the SME than the “bleak house” model. Employee morale was perceived as high and only one in ten SMEs felt their employees were opposed to change. Owners were reluctant to seek advice from those outside the firm. They also showed reluctance to discuss future plans with their employees although they did tend to consult employees who would be affected directly by any change. Communication within SMEs was predominantly informal. Surprisingly, given the skills shortages highlighted by SMEs in other economies, very few of the Hungarian SMEs identified skills shortages as a problem and formal training programmes were reported only rarely. Variations between micro, small and medium sized firms are highlighted to emphasize the heterogeneous nature of the Hungarian SME sector.

The HRM activities considered provide a picture of only a small number of HRM activities in Hungarian SMEs but the findings imply the relationships examined here are deserving of further exploration both in Hungary and other transition economies.

The paper provides a detailed picture of selected aspects of HRM in smaller businesses within a transition economy.

The purpose of this paper is twofold: first, using the case of Finnish small business advisors (SBAs), it aims to clarify a controversy in entrepreneurship policy about using public funds to foster solo and micro entrepreneurship. The study reveals the SBAs’ belief systems to facilitate policy-relevant conclusions about their advisory competence, counseling tendencies and probable impact on nascent entrepreneurs and macro consequences like firm displacement. Second, methodologically, the study’s cognitive perspective and method enable researchers to assess the approach and its potential.

The SBAs’ (n=15) belief systems were elicited by interview-based causal mapping. They are summarized using aggregated causal maps and analyzed to understand the SBAs’ dominant mindset and to draw conditional inferences about their professional competence and impacts.

The SBAs have convergent belief systems about the causes and consequences of micro entrepreneurship. They are generally competent to detect and foster viable solo and small micro firms. From a policy viewpoint, however, they ignore indirect effects like firm replication and appear risk aversive, less inclined to promote their clients’ growth intentions and plans.

For entrepreneurship policy makers, the study clarifies a controversial issue. It finds clear grounds for public funding of SBA type services, but this may depend on policy goals and local conditions. For the SBAs, the study suggests proactive, income-generating services for improved financing and legitimacy. For entrepreneurship researchers, it demonstrates the potential and limits of the cognitive approach and causal mapping.

Many industries are increasingly affected by or even invite the participation of external stakeholders in the innovation process. The concepts of open innovation use the ideas of external stakeholders to foster innovation and make the firms more competitive. However, little research has considered whether evaluations from external stakeholders also serve as a source for open innovation and, and if so, in which way they are integrated into the innovation process. Thus, the purpose of this paper is to explore how external evaluations influence the innovation process in the creative industries.

The authors conducted an explorative qualitative study using a mixture of an inductive and deductive research design. The authors interviewed 14 artists in order to understand how external evaluations are integrated in the innovation process.

The paper formulates propositions on factors that influence whether and how external evaluations are a resource for the innovation process in micro-firms. The factors are the situation of the individual that is evaluated, the external evaluator’s credibility, the content of the evaluation, and the potential impact of the evaluation on the individual evaluated.

This paper provides exploratory insights into a so far neglected source of open innovation and its external evaluations in micro-firms in the creative industries.