The Moderating Role of Trust in SME Owner/Managers' Decision-Making about Collaboration

This paper analyzes the impact of trust and trust agents on small to medium-sized enterprises' (SMEs) ability to derive benefits from it. The findings suggest that trust is a significant factor moderating the way SME owners/managers perceive the potential benefits of networks. These findings support earlier research that posited that networking provides an avenue for SME owners/managers to learn about potential business opportunities. However, Australian owner/managers that belong to networks do not demonstrate behavior and practices typical of either explorative or exploitative networks. Instead, the findings suggest that in addition to the typical networks, a third type of network should be added to the literature—embryo-explorative networks. Such networks describe SMEs owners/managers who attend network meetings and report on what they learn about new opportunities from the networks; however, they do not tend to engage in typical collaborative activities (such as joint marketing venture) as described in the networking literature. Embryo-explorative networks are defined as those that have yet to develop into the explorative networks—probably because there has been insufficient time to build trusting relationships required to foster collaborative ventures that involve some risks.     

The Contribution of Networking to Small Firm Marketing

It is generally accepted that networking is one means through which owner–managers of small firms market their goods and services. However, though there has been considerable attention directed toward the concept of small business networking, previous studies have failed to present a comprehensive investigation of the contents of network links, an analysis of the benefits contained within these links, and an expatiation of how these benefits contribute to the small firm, specifically its marketing activities. To that end, this paper reports on an in‐depth qualitative study to present an analysis of the contribution that networking makes to small firm marketing.     

The Information Use in a SME: Its Importance and Some Elements of Influence

The aim of this study is to gain some insights into the importance of the information use for the success of a SME. Consequently we examine some characteristics of the owner/manager and his firm which determine the extent of this use. The value of the model is examined for 208 Belgian SME owner/managers. Our data suggest there is a positive relation between the extent of information use and the performance of a SME. Moreover, we find that SME owner/managers with a greater strategic awareness, with less firm experience prior to the present position and with a greater desire for growth use more information. Also, smaller family ownership and intervention in strategic management, as well as greater delegation of decision making, lead to a higher information use.     

The Potential and Challenge of the Network Realization Capability for SMEs in Ireland and Finland

In recognizing that the term ‘network’ can be interpreted in a multitude of ways and from a number of varying perspectives, the purpose of this article is to report the findings of a study designed to determine whether SME owner/manager see networks as an industrial relationship phenomenon. This gap, termed ‘realization capability’ refers to the SMEs’ ability to visualize the inter-organizational embedded systems that they are a part of that could enhance their marketing efforts. Bonds tie network members together and provide the context for relationships. Therefore, in measuring the level of SME realization capability the authors conceptualized the concept into social and structural bonds to ascertain the network perspective of the SME participants. To determine the level of realization of SME actors, a participatory action research method was employed in an Irish setting and compared to a control group in Finland. Findings suggest that from an Irish perspective, realization was low, highlighting that misconceptions existed amongst the SMEs regarding the nature and dynamics of networks whereby they were viewed as a predominantly personal contact structure. Conversely, the Finnish participants viewed networks as interconnected business relationships, continually operating in close collaboration with other stakeholders within their business. The findings are discussed in detail as they raise the barrier for many SMEs to participate in networks which by definition are proposed as cost effective solutions which can address many of the gaps to implementing marketing approaches by SMEs.     

Trustworthiness and interest rates: an empirical study of Italian SMEs

Trust is expected to reduce transaction costs and agency costs and thus influence the cost of credit for small businesses. Assessments of trustworthiness are based on the ability, benevolence and integrity of the owner manager. The study examines whether lending managers’ assessments of the trustworthiness of small and medium-sized enterprise (SME) owner managers are associated with the interest rate charged. Data were obtained from a survey of lending managers from small banks in North East Italy. Control variables and a vector of trustworthiness factors were collected on a random sample of customers, resulting in data for 365 small firms (74% response rate). Multivariate regression analyses provided evidence of a negative association between trustworthiness and interest rates. Banks, owner managers, policy makers and researchers should recognise the potential of trust to influence lending decisions and behaviour.     

The role of top management networks for market knowledge creation and sharing in China

Despite the paramount influence of top managers within a firm, extant literature has under-researched the specific role of top management in market knowledge development. Drawing on social networks theory, the authors conceptualize a linkage between top management networks (TMNs) and market knowledge management. Based on a sample of Chinese firms, the results show that networking embeddedness of TMNs promotes new knowledge creation, but too much networking embeddedness leads to diminished returns. In addition, networking disparity of TMNs has a negative influence on existing knowledge sharing, and technological turbulence seems to weaken this negative impact. The findings have some important implications for marketing research and for managers on how to obtain superior learning in Chinese Economy.     

A framework for SME retail branding

Abstract

It has become increasingly important for small to medium sized enterprise (SME) retailers to stand out in the current marketplace. Branding in SMEs is a growing area of academic interest, although the majority of studies have been based in the manufacturing sector. This study seeks to develop a framework of the characteristics, processes and dynamics of SME retailers. A qualitative research study was carried out with SME owner managers (OMs) over a period of 15 months. The findings extend the understanding of branding in SMEs in a number of ways. Firstly, it is found that SME retailers take a cautious approach to brand management, seeking to build loyalty, networks and relationships. Secondly, the holistic nature of SME retail branding presents a challenge to OMs who are resource-constrained. Thirdly, the soft, colloquial and intuitive approaches to brand equity appraisal are evident. Brand marketing is focused on word of mouth, which has implications for how OMs operationalise the brand around store experiences. Finally, the influence of the OM on branding decisions is clear. The key findings are discussed in relation to the retail context of the study, the centricity of the OMs in SME branding and entrepreneurial brand management.     

Differences between Presidents' and Sales Managers' Perceptions of the Industry Environment and Firm Strategy in Small Industrial Firms: Relationship to Performance Satisfaction

The industrial sales force is the primary source of information about the competitive environment. Differences of perceptions of that environment between the national sales manager and the firm president in small industrial firms may reflect inadequate environmental information input into strategic decision-making. The sales force is a major element in implementation of strategy and differences between perceptions of firm strategy may reflect inadequate coordination and communication between the chief strategy decision-maker and the manager who is responsible for implementing that strategy in the market place. It would be expected that these differences in perceptions would impact negatively strategy formulation and execution resulting in unsatisfactory firm performance. This study surveyed the environmental and strategy perceptions of presidents and national sales managers in small to medium-sized industrial firms as well as presidents' satisfaction with firm profitability and marketing/sales effectiveness. The average absolute difference in environment perceptions has a negative relationship with satisfaction with profit. The average absolute difference in strategy perceptions has a negative relationship with marketing/sales effectiveness. This latter relationship is especially strong in an environment high in capital spending variation and for larger firms. The authors suggest implications for managers based on these results.     

Choosing among alternative new product development projects: The role of heuristics

The initial screening decision that marketing managers make is critical. It requires the selection of what innovation project to invest in, which is fundamental to marketing success. However, our knowledge of how managers make these decisions and how this impacts performance is limited. By drawing upon cognitive psychology and the managerial decision-making literature, we address two critical questions. The first question focuses on identifying specific decision-making types (e.g., specific heuristics, intuition) used when making an innovation screening decision. Based on this analysis and prior research, we develop specific decision-maker profiles about how an individual manager decides. The second research question is about connecting these profiles with performance. Specifically, it addresses what the consequences of different decision-maker profiles are on the perceived accuracy and speed of decision-making? Data were collected from 122 senior managers in these industries. We find that when heuristics are used alone, or concurrently with intuition, managers make decisions that are as accurate as when they rely on analytical decision-making. However, the process is significantly faster. The findings provide an important step toward a more comprehensive understanding of decision-making at the front-end of innovation.     

Fostering strategic learning capability to enhance creativity in small service businesses

Potentially, owner manager creativity is a major source of competitive advantage within small businesses. However, whilst smallness of operation bestows possible benefits and advantages which can facilitate or assist owner manager creative thinking and development activities, it also brings with it potential unique problem-types which can severely impact growth and squeeze out owner manager propensity to be creative and innovate. Within this article, we utilise Personal Construct Theory to demonstrate the complexity of the small business strategic learning and management processes in dealing with such a problem context, and the nature and role of owner manager creativity within these processes. Case study insight is used to demonstrate the ways in which creative owner managers are able to set themselves free from currently constraining existing personal worldviews and unfold and converge new ideas and produce alternative personal constructions of innovative development opportunities.     

The Dependence of Family Businesses on a Single Decision‐Maker*

Anecdotal evidence suggests that family businesses are very dependent on a single individual (the owner‐manager). However, the degree of dependence previously has not been studied formally. Further, an explanation for why some family businesses are highly dependent on the owner‐manager and others are not has not been explored. Utilizing a national survey of Canadian family‐owned businesses, this paper therefore addresses two central issues: (1) the degree of dependence of family‐owned businesses on a single individual; and (2) the factors associated with this reliance. Self‐report responses from family business owners provided evidence of a high level of dependence on the owner‐manager. In 75 percent of all family businesses, respondents believed that the company was either dependent or very dependent on them. The response to this subjective question is consistent with responses to our three more objective measures. First, 65 percent of owner‐managers responded that they made all the major decisions in at least three of five functional business areas. Second, these businesses had few key managers—in 57 percent of all businesses, there were only two or fewer key managers in addition to the owner. Third, in 62 percent of all family businesses, neither had a successor been chosen nor had a process been put in place for choosing a successor. These results strongly suggest that family businesses are highly dependent on a single individual. Six factors had significant power in explaining the degree of dependence. Two factors related to the owner‐manager—dependence decreased in the age of the owner‐manager and in proximity of the owner‐manager to retirement. Four factors related to the family business: dependence decreased in the value of the firm, the number of shareholders, and the age of the business and was greater where the owner‐manager's family had voting control. Surprisingly, neither the existence of a board of directors with outside membership nor an advisory board with outside membership helped explain the level of dependence.     

Determinants of Consumers’ Purchase Intentions of Organic Vegetables: Some Insights from Malaysia

This study tests the mediating effects of corporate social responsibility (CSR), product image, and corporate reputation on the relationships between green marketing awareness and consumers’ purchase intentions of organic vegetables. Data from 200 valid questionnaires was analyzed utilizing a partial least squares approach. Results show that product image was confirmed as the leading factor that partially mediated the influence of consumer green marketing awareness on consumers’ purchase intentions of organic vegetables, and this was followed by CSR, but that corporate reputation was not established as a mediator. Marketing managers should, therefore, develop various effective strategies to communicate their companies’ product image, embracing green marketing practices in order to increase market awareness, and providing positive recommendations to friends and relatives via various marketing communication channel including the short message service (SMS), emails, and social networking sites (SNS).     

Differences in Marketing Managers' Decision Making Styles Within the Asia-Pacific Region

Abstract

Marketing managers around the world are being asked to work with foreign counterparts as never before, but with limited success. This requires integration of decision making styles. The purpose of this study is to apply a management style of decision making measurement technique to selected countries of the Asia-Pacific region to determine the extent of differences in decision-making style among marketing managers.

This study surveys marketing managers within Australia, Hong Kong, The Philippines, Vietnam, New Zealand, and China. Within each country different sampling processes and modes of data collection were used by locally-based associates of the researchers, as appropriate for the country.

The study results indicate that substantive differences do exist between marketing managers from different cultural/national backgrounds within the Asia-Pacific region and these managers differ in their decision-making styles from managers in other parts of the world. doi:10.1300/J042v21n01_06     

Resource dependency and institutional theory perspectives on direct and indirect export choices

This article develops and tests resource dependency and institutional theory arguments to explain two choices facing SME owner/managers: (1) the decision whether to export or not and (2) if the firm exports, the choice between a direct (to customers abroad) and an indirect (using another firm as intermediary) export mode. Binomial logistic regressions on our sample of 871 Dutch SMEs suggest that institutional theory perspectives (owner/managers’ perception of the increased international presence of their domestic competitors, customers' and suppliers' and perceptions of increased use of foreign suppliers) explain the decision to export, while resource dependency theory arguments (owner/managers’ perception of the favorability of access to knowledge and technology, of production costs and of access to capital in the home market) guide the choice between direct and indirect export modes.     

Qualifications and turnover of managers and venture capital-financed firm performance: An empirical study of german venture capital-investments

This study investigates relationships between experience and education aspects of manager qualifications and performance measures in a sample of 103 Portfolio Companies (PC) of German Venture Capital Firms (VCF). In addition, we consider whether lower PC performance induces higher PC manager turnover and if VCF actively influences such PC manager turnover. Bivariate and multivariate analyses confirmed that PC manager qualifications correlate significantly with PC performance. Specifically, characteristics of PC manager experience in marketing/sales, planning/strategy functional areas, as well as in terms of industry experience, were identified as critical success factors.Our findings have substantial implications for VCF management practice: Although deficits in PC manager qualifications were addressed previously both in English and the German language academic literature, to date management practices did not recognize the relevance of such qualifications for investment success and the need to influence PC manager qualifications systematically through tailored selection and development procedures for PC managers. Had the need to compensate for gaps in PC manager qualifications been given adequate priority, our sample would neither contain a high variance for qualification variables nor significant correlations between multiple aspects of PC manager qualifications and success. Therefore, our findings suggest that (German) VCF should in due diligence put more emphasis on (1) PC managers' business functional experience and, unless the PC is active in an entirely new market, (2) a high proportion of managers with experience in the relevant industry. Beyond due diligence, VCF may have to actively realign or replace top managers of PCs in cases where success is substantially below expectations. It is highly likely that there is room for further improvement in this area, in particular in constructing incentives against “living dead” cases, where PCs develop substantially below expectations, but do not fail completely.     

Evolving "New Marketing" Philosophies By Merging Existing Concepts: Application Of Process Within Small High-Technology Firms

The important role of small high-technology firms in both job creation and new innovations capable of sustaining a country's competitive advantage has understandably caused many Governments to be interested in factors influencing the market performance of these types of firm. A potential hazard with alternative emerging theories about appropriate marketing philosophies is that polarisation of opinions may cause theorists to reject alternative perspectives despite the fact that observations of "real world" marketing practice may suggest that a hybrid managerial approach is the most appropriate response to prevailing market circumstances. If one accepts this perspective, it permits merger of the transactional, relationship and entrepreneurial schools of marketing thought; thereby generating alternative approaches to marketing practice based upon (i) conservative-transactional, (ii) conservative-relationship, (iii) entrepreneurial-transactional and (iv) entrepreneurial-relationship orientations.

Research questions which arise about a hybrid concept are whether orientation might influence overall performance and the level of internal organisational competencies required of the firm in the key areas of innovation, HRM, employee productivity and decision-making. The results of a mail survey measuring revenue growth suggest that an entrepreneurial-relationship orientation will enhance overall performance of small high-technology firms. The survey also suggests that as entrepreneurial high-technology firms move closer to customers they exhibit higher competencies in areas such as HRM, employee productivity, management of quality and utilisation of information in decision-making.

It is concluded that the research has some interesting implications concerning the appropriate marketing styles available to small, high-technology firms. As entrepreneurial and relationship marketing can enhance performance, then possibly an owner/manager seeking to increase sales may be able to select a style which seem appropriate both to the degree to which customers seek closer relationships with suppliers and the vision of the firm concerning the importance of innovation as a strategy for delivering customer satisfaction. Further research is needed in order to gain additional understanding of (a) the influence of organisational competencies on overall performance and (b) whether marketing style might influence how small high-technology firms acquire the knowledge they require to improve internal operational processes.     

The Influence of Love of Money and Religiosity on Ethical Decision-Making in Marketing

The impact of “love of money” on different aspects of consumers’ ethical beliefs has been investigated by previous research. In this study we investigate the potential impact of “love of money” on a manager’s ethical decision-making in marketing. Another objective of the current study is to investigate the potential impacts of extrinsic and intrinsic religiosity on ethical marketing decision-making. We also include ethical judgments as an element of ethical decision-making. We found “love of money”, both dimensions of religiosity, and ethical judgment to have significant impacts on ethical intentions in a marketing situation. In addition to providing an important contribution to the business ethics literature, the findings also have important managerial implications.     

The first export order: a marketing innovation revisited

This study reports on an investigation into what lies behind a firm's first export order and revisits the questions posed in the classic article by Simmonds and Smith [(1968). British Journal of Marketing, 2, 93–100]. It concentrates on risk/reward considerations in decision-making. Interviews were undertaken with owner/managers who were the key decision-makers in 10 newly internationalising UK start-up firms, that is, in their first year of operation, in order to avoid recollections in respect of hindsight. The findings highlight that a variety of factors can affect the decision of owner/managers in small firms to start their internationalisation path. Decisions are made in the context of perceived risk/reward considerations regarding exploiting various opportunities; for example, what are considered to be affordable losses against respective owner/manager's objectives and experience. The contribution of the study is that it employs an effectuation lens in respect of the first export decision.     

The efficacy of marketing skills and market responsiveness in marketing performance of emerging market exporting firms in advanced markets: The moderating role of competitive intensity

Emerging market exporting firms in advanced economies must manage a highly dynamic landscape owing to factors such as changing market needs and fierce competition. Hence, these firms need to develop unique marketing skills for superior performance. Accordingly, this study draws on the resource-based and dynamic capability theory to empirically examine the role of marketing skills in developing a dynamic capability—market responsiveness—for improved marketing performance, and the changes in this relationship under highly competitive intensity. Using a sample (n = 98) of firms originating from an emerging market (Pakistan) mainly exporting to advanced markets (the United Kingdom, the United States or both), the findings show that marketing skills, positively mediated by market responsiveness, influence the marketing performance of such firms in advanced markets. The indirect relationship is positively moderated by a higher level of competitive intensity. This study extends the dynamic capability and export marketing streams of literature, particularly for emerging market exporting firms in advanced markets, and provides useful performance implications to export marketing managers.     

Strategic and Operational Perspectives of SME Brand Management: A Typology

This paper seeks a holistic understanding of brand management in SMEs, incorporating both strategic and operational perspectives. The aim of the study is theory‐building, contributing a typology of SME brand management. The typology has two dimensions, namely a primary strategic focus (internal or external) and a brand management capability/operational capability (strong or weak). Four SME brand management types emerge: organization brand identity‐driven, operations‐driven, organization brand image‐driven, and opportunistic. The results have practical implications for SME owner–managers, who can utilize them for planning purposes, to develop the most appropriate strategic orientation and brand management processes to enhance the SME performance.