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Article
Publication date: 20 July 2020

Mohsin Shafi

Despite their economic and cultural significance, the growth of handicraft micro firms is vulnerable, given their small size and resource limitations. By examining the…

Abstract

Purpose

Despite their economic and cultural significance, the growth of handicraft micro firms is vulnerable, given their small size and resource limitations. By examining the impact of cooperation on firm performance via innovation capability, this study shows how micro firms can address constraints and achieve sustainable development by acquiring and utilizing external resources, complemented by innovation capability, through internal development.

Design/methodology/approach

Data were collected from 164 handicraft micro firms in Pakistan via a questionnaire. Structural equation modeling was employed to estimate interrelations of various constructs simultaneously and control measurement errors.

Findings

The impact of cooperation with customers and suppliers on firm performance via innovation capability was positive and significant. Contrarily, competitor cooperation did not significantly affect innovation capability. Furthermore, there was a positive and significant interaction effect of customer and competitor cooperation on innovation capability. Thus, micro firms must reinforce their customer and supplier relationships through innovation capability and internal transformation for sustainable development. Moreover, a balance must exist between cooperation and competition to achieve optimal innovation returns for the sustainable development of firms.

Originality/value

This study emphasized that micro firms must strengthen their customer and supplier relationships via innovation capability and internal development to achieve higher performance. Moreover, the study introduced a new dimension for measuring firm performance.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 25 May 2020

Phillip McGowan

The purpose of this study is to investigate the efficacy and impact of effectual logic used by owner-managers of established micro firms when making buying decisions.

Abstract

Purpose

The purpose of this study is to investigate the efficacy and impact of effectual logic used by owner-managers of established micro firms when making buying decisions.

Design/methodology/approach

Semi-structured interviews were conducted with 13 owner-managers of micro firms, concerning their decision-making processes when selecting suppliers. Interviews were transcribed verbatim, then analysed thematically.

Findings

This study contributes to the literature in respect of effectuation by considering its use by a micro firm owner-manager to develop relationships with trusted suppliers. The findings suggest effectuation positively promotes flexibility and reduces loss potential, thus positively affecting the price that the owner-manager is willing to pay. Furthermore, it also appears to necessitate effectual selling, with an ongoing iterative process, in which effectual selling leads to effectual buying. In contrast to extant literature, this study suggests that application of effectual logic to buying and selling decisions, by a micro firm owner-manager can create, rather than reduce, uncertainty.

Research limitations/implications

This study is based on single interviews with a sample of owner-managers of micro firms that operate within the same industry and within a single country. The subjective nature of qualitative research, homogeneity and size of sample may prevent generalisation of the findings.

Practical implications

Effectual buying and selling appears to provide a micro firm with the ability to engage with flexible suppliers so as to offer a heterogeneous array of products and services to its customers, thus promoting sales success. Yet, the lack of homogeneity of customer needs and need for supplier flexibility may lead to overall costs being greater than those that could be achieved if the micro firm specialised in a smaller range of products and services and developed internal resources to meet the needs of its customers.

Originality/value

In contrast to extant literature that states that effectuation is a way to reduce uncertainty to a level at which a decision can be made, this study suggests that continual use of effectual logic by owner-managers of micro firms when making buying and selling decisions can instead create more uncertainty in the longer term.

Details

Journal of Business & Industrial Marketing, vol. 36 no. 1
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 January 2014

Arthur Kearney, Denis Harrington and Felicity Kelliher

The paper has been developed from a critical review of available literature drawn from the micro firm, managerial capability and innovation management fields. The paper…

Abstract

Purpose

The paper has been developed from a critical review of available literature drawn from the micro firm, managerial capability and innovation management fields. The paper aims to address these issues.

Design/methodology/approach

The paper has been developed from a critical review of available literature drawn from the micro firm, managerial capability and innovation management fields.

Findings

Four criteria of micro firm managerial capability emerge from micro firm managerial traits in the literature namely, leadership; strategic thinking; problem solving and people relationships. The review also shows that micro firms are embedded in three resource pools which include stakeholder ties; the local community and the proximate market environment. Micro firm managerial capability is argued to emerge from the interaction of the managerial capability criteria and the resources in a process mediated by the resource based and dynamic capabilities perspectives from the strategic management literature.

Research limitations/implications

A gap in the academic literature is identified and the proposed theoretical model is presented to address this deficiency in the literature. Future empirical research is recommended.

Practical implications

This proposed model will allow practitioners to better conceptualise and design programmes that will assist companies in developing managerial capabilities to innovate. Deep links between hotel industry practitioners and the academic community will enable the effective dissemination of the research.

Originality/value

Hotel micro firms play an important social and economic role. There has been little research into how they innovate and specifically into managerial capability for innovation in context. The present research uses conceptual research to map the field and identify critical avenues for future research.

Details

European Journal of Training and Development, vol. 38 no. 1/2
Type: Research Article
ISSN: 2046-9012

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Article
Publication date: 7 August 2009

Felicity Kelliher and Leana Reinl

The purpose of this paper is to discuss a resource‐based approach for exploring micro‐firm management practice, as informed by the relevant literature. Specifically, the…

Abstract

Purpose

The purpose of this paper is to discuss a resource‐based approach for exploring micro‐firm management practice, as informed by the relevant literature. Specifically, the paper analyses available literature and catalogues micro‐firm and managerial competence criteria in pursuit of managerial insights in this environment.

Design/methodology/approach

A comprehensive literature review precedes the conceptualisation of micro‐firm management practice.

Findings

Literary findings suggest that, considering micro‐firms' internal resource constraints, minimal environmental power, and owner‐centred culture, it is vital for these organisations to embed their valuable resource in their core business strategy, to ensure survival in the longer term. Furthermore, there is an assumption that knowledge must be used optimally within the micro‐firm by developing the analytical and critical skills of individuals, groups and the entire organisation so as to sustain and grow these firms' competitive advantage. Having identified and catalogued a range of factors that impact micro‐firms, the authors propose a “resource taxonomy of micro‐firm management practice”, which establishes factor interaction and the interrelationships between each resource in this environment. The purpose of this taxonomy is to assist in the analysis of management practices in the micro‐firm milieu.

Research limitations/implications

The authors go on to discuss taxonomy implications for micro‐firm training policy and propose further exploration of micro‐firm management practice and resource‐based research in this environment.

Originality/value

Academic research, which focuses specifically on the micro‐firm, has historically been rare, despite multiple calls to study these firms in their own right. By proffering a “resource taxonomy of micro‐firm management practice”, the authors seek to inform this neglected research area.

Details

Journal of Small Business and Enterprise Development, vol. 16 no. 3
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 17 May 2011

Philippe Hermel and Imane Khayat

The purpose of this paper is to identify and analyze resources and capabilities that distinguish between traditional, slow born‐global and rapid born‐global micro‐firms.

Abstract

Purpose

The purpose of this paper is to identify and analyze resources and capabilities that distinguish between traditional, slow born‐global and rapid born‐global micro‐firms.

Design/methodology/approach

The study uses multiple case study methodology. Three case studies are presented to compare the internationalization pathways of three French micro‐firms.

Findings

The paper emphasizes the importance of leveraging between internal and external resources for rapid internationalization of micro‐firms. The rapid internationalization is driving and facilitated by managerial abilities, innovation and network. The study shows that analysis of micro‐firms in terms of resources and capabilities enhances the understanding of internationalization.

Research limitations/implications

Because it is limited to three case studies, the generalization of findings to a broad sample of French micro‐firms will be needed.

Practical implications

The research suggests that two‐level analysis (i.e. individual level and micro‐firm level) should be considered when examining rapid internationalization. Micro‐firm top managers need to be aware of the importance of developing internal resources to facilitate incorporation of new external resources. Their experience and expertise in addition to the micro‐firm's innovation capacity or reputation can be used to expand rapidly abroad.

Originality/value

The distinction between traditional, slow born‐global and rapid born‐global French micro‐firms in terms of resources and capabilities makes this study original.

Details

Journal of Small Business and Enterprise Development, vol. 18 no. 2
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 19 November 2018

Sinead Mellett, Felicity Kelliher and Denis Harrington

The purpose of this paper is to evaluate key criteria underpinning network-facilitated green innovation capability development in micro-firms.

Abstract

Purpose

The purpose of this paper is to evaluate key criteria underpinning network-facilitated green innovation capability development in micro-firms.

Design/methodology/approach

Micro-firms, those firms with less than ten full-time employees, need to continuously innovate in order to sustain their business in the emerging green economy. This study uses an interpretive multiple case approach to explore micro-firm owner-manager (O/M) green innovation activities, encompassing O/M views on facilitated network engagement in Ireland and Canada over a 12-month period.

Findings

The findings show that proactive implementation of green innovation is influenced by the O/M’s natural environment orientation and the potential for economic gain, while facilitated networks provide an additional resource that the O/M can draw from that allows the O/M to test new ideas, comprehend new and existing legislation and identify potential supports in pursuit of green innovation capability development within the micro-firm.

Research limitations/implications

This study offers a contribution to knowledge in the areas of green innovation, micro-firm capabilities and facilitated network engagement. However, the sample size is small and distance was a challenge, yet data and case protocols are in place which allow for replication of the study. As the research is embedded in the resource and capability theories, alternative theoretical frameworks may shed a different light on the research question.

Originality/value

Prior studies have found that facilitated networks have a positive impact on micro-firm sustainability as these networks enhance the firm’s constrained resource base. The proposed framework can be used as a guideline for support organisations including facilitated networks in assisting micro-firms in reaching their green innovation goals and objectives. It can also be used by micro-firms in the attainment of the green innovation capability.

Details

Journal of Small Business and Enterprise Development, vol. 25 no. 6
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 15 September 2020

Abel Duarte Alonso and Seng Kiat Kok

The purpose of this study was to examine pathways towards, and the rationale behind internationalisation from the perspectives of micro firms' operators involved in the…

Abstract

Purpose

The purpose of this study was to examine pathways towards, and the rationale behind internationalisation from the perspectives of micro firms' operators involved in the globally competitive wine industry. Moreover, drawing from entrepreneurial action theory, the study developed a theoretical framework to help understanding micro approaches and rationale for internationalisation.

Design/methodology/approach

Data were collected through interviews with 19 micro winery owners and managers operating in the Prosecco Superiore (Italy) and cava industry (Spain).

Findings

Aligned with entrepreneurial action theory, uncertainty in participants' environment, coupled with the associated need to diversify through exports, were predominant drivers of internationalisation. However, internationalisation also emerged through non-deliberate channels, including through growth of wine tourism and increasing foreign wine enthusiasts. Thus, while entrepreneurial action through deliberate means triggered a stronger focus on internationalisation, other passive interventions beyond the control or influence of micro firms, but rather emerge serendipitously, can similarly spur direct action.

Originality/value

The study demonstrated its originality and value in various ways, fundamentally, addressing three knowledge gaps, thereby contributing to practical and theoretical discourses with corresponding value, including managerially. First, it extended literature focussing on micro firms, which as compared to small and medium enterprise research is much more limited. Second, it provided a comparative component, which is much rarer in contemporary research discussing internationalisation amongst micro firms. Third, the study proposed a theoretical framework stemming from the chosen inductive approach, thus, addressing concerns regarding the lack of theoretical rigour or depth in internationalisation activities amongst micro firms.

Details

British Food Journal, vol. 123 no. 2
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 11 March 2019

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

Abstract

Purpose

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

Design/methodology/approach

This briefing is prepared by an independent writer who adds his/her own impartial comments and places the articles in context.

Findings

It is becoming a requirement for micro-firms to become more engaged with the green economy. This briefing looks at what micro-firms need to do to successfully adopt green innovation practices.

Originality/value

The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Details

Strategic Direction, vol. 35 no. 3
Type: Research Article
ISSN: 0258-0543

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Article
Publication date: 7 April 2015

Eijaz Ahmed Khan and Mohammed Quaddus

This study realize that the relationships between business environment and firm performance in context of small- and medium-sized enterprises and large organizations is…

Abstract

Purpose

This study realize that the relationships between business environment and firm performance in context of small- and medium-sized enterprises and large organizations is well understood and focused, but less research has been done on microenterprises, especially in informal sector. The purpose of this paper is to examine these relationships.

Design/methodology/approach

A mixed method research design was used. In the field study, data were obtained from 14 participants via one-to-one personal interview. Content analysis was applied to extract, classify, and cross-examine of the data. In the quantitative approach, questionnaire was developed and data were collected from 438 informal microenterprises (IMs) owners. The data were analysed using the partial least square structural equation modelling.

Findings

Results from this field study and survey recognized these relationships and vibrates well with the existing literature and establish the hypothesis.

Practical implications

In order to create more favourable environment and ensure the performance, the policy makers, professional bodies could formulate decent requirements for IMs to have a code of business practices and socio-economic performance.

Originality/value

This study provides a first step towards business environment and firm performance in context IMs and makes several contributions to the literature.

Details

International Journal of Sociology and Social Policy, vol. 35 no. 3/4
Type: Research Article
ISSN: 0144-333X

Keywords

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Book part
Publication date: 12 April 2012

Tommaso Gabrieli, Antonio F. Galvao and Gabriel V. Montes-Rojas

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…

Abstract

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.

Details

Informal Employment in Emerging and Transition Economies
Type: Book
ISBN: 978-1-78052-787-1

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