The Characteristics and Features of SMEs: Favorable or Unfavorable to Logistics Integration?

For small and medium-sized enterprises (SMEs), logistics integration is one of the most significant challenges of modern management. Growing numbers of SMEs are under pressure from large manufacturing enterprises (LMEs) to change their traditional management styles, both operationally and organizationally, replacing them with integrated systems that help increase the speed and fluidity of physical and information flows, help synchronize demand with supply, and help manage transactions more accurately. The recent literature discusses integrated logistics chain management quite extensively, but most studies address the issue from the standpoint of large firms. Given the importance of SMEs in the economies of industrialized countries, and given, too, that a constantly growing number of such firms will have to replace their management methods by logistically integrated practices, the authors of this study believe that it is important to examine the characteristics and features of SMEs in order to identify those favorable and unfavorable to logistics integration.     

An Investigation of Entrepreneurial Orientation,Perceived Environmental Hostility,and Strategy Application among Chinese SMEs

Little is known about how Chinese small and medium‐sized enterprises (SMEs) respond to their competitive environment. We predict that when industry competition is intense, entrepreneurial Chinese SMEs tend to perceive more environmental hostility than do their nonentrepreneurial peers. The perceived environmental hostility further drives these firms to choose marketing strategies but not cost control or innovation strategies. Data from 170 Chinese SMEs confirm our hypotheses, indicating that though some entrepreneurial orientation (EO) effects transcend different economy types, other EO effects differ significantly as the environment changes.     

Combining Information Technology and Decentralized Workplace Organization: SMEs versus Larger Firms

This paper examines whether information technology (IT) and decentralized and incentive-based workplace organization are complementary only for large firms or also for smaller firms. Previous empirical evidence suggesting complementarity between IT and decentralization is mainly based on large firms. Using data from a sample of 3,288 small and medium-sized enterprises (SMEs) and 595 larger firms from the manufacturing and service sector in Germany, it appears that SMEs with decentralized and incentive-based work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and workplace organization are individually associated with higher productivity, but the combination of IT and decentralization does not yield a productivity premium. In contrast, the productivity of IT depends positively on decentralization for large firms. The findings suggest that combining IT and decentralized workplace organization seems only to be a successful strategy for larger firms.     

Antecedents of Service Innovation in SMEs: Comparing the Effects of External and Internal Factors

Increasing attention has been paid of late to the importance of effectively developing both exploratory and exploitative innovation in firms. Small and medium‐sized enterprises (SMEs) play a significant role in the growth of economies and in job creation, yet at the same time they can differ significantly from larger firms with respect to effective management. Recent research has examined the effects of environmental and organizational characteristics on the effective development of exploratory and exploitative innovation. SMEs differ from larger firms in many ways, such as the availability of resources, and it is unclear whether findings based on studies in larger firms will also hold true for SMEs. As such, it is important to explore and understand the extent to which SMEs differ from large firms in this important area. Specifically, this paper empirically examines the extent to which organizational factors (connectedness, centralization, formalization) and business environment (dynamism and hostility) are associated with different types of innovation orientations (exploratory and exploitative) among SMEs.     

The Identification and Characterization of Open Innovation Profiles in Italian Small and Medium‐sized Enterprises

Open innovation (OI) denotes a company's ability to draw on a range of external sources to meet their needs for innovation. Very few empirical analyses have been conducted on the extent to which this new paradigm is embedded in small and medium‐sized enterprises (SMEs). Thus, the present study's objective is to identify and characterize different profiles of OI in SMEs, considering the openness of the innovation process phases, variety and breadth of collaborations, determinants, barriers, and motivations. A survey was carried out among Italian SME manufacturing firms, and a database of 105 companies was obtained. With regard to data elaboration, a factorial and cluster analysis was conducted, and three different OI profiles emerged: selective low open, unselective open upstream, and mid‐partners integrated open. The different behaviors of the three clusters in terms of determinants, performance, contextual factors, barriers, and motivations were analyzed and discussed.     

Pecking Order Theory versus Trade-Off Theory: are service SMEs�� capital structure decisions different?

This paper seeks to analyse if the capital structure decisions of service small and medium-sized enterprises (SMEs) are different from those of other types of firm. To do so, we consider four research samples: (i) 610 service SMEs; (ii) 126 service large firms; (iii) 679 manufacturing and construction SMEs; and (iv) 132 manufacturing and construction large firms. Using the two-step estimation method, the empirical evidence obtained in this study shows that the capital structure decisions of service SMEs are different from those of other types of firm. Service SMEs’ capital structure decisions are closer to the assumptions of Pecking Order Theory and further removed from those of Trade-Off Theory compared with the case of other types of firm.     

Organizational innovation outcomes in SMEs: Effects of age,size, and sector

Innovation studies concentrate on factors contributing to innovation. However, governments seek clearer understanding of innovation outcomes in their appraisal of the costs and benefits of policies to promote innovation in small and medium-sized enterprises (SMEs). This study examines organizational innovation (OI) outcomes in SMEs. Based on company interviews and a mail survey, the findings reveal OI results in enhanced productivity, margin, market leadership, and working environments. However, OI does not lead to operational efficiency and employees’ retention. Organizational innovation leads to companies operating outside their core competency but does not have an adverse environmental impact. Organizational innovation has greater impact on small firms. The paper includes practical and theoretical implications.     

Competitor orientation in successful SMEs: an exploration of the impact on innovation

The impact of market orientation on organisational performance has been the subject of many studies illustrating variance with firm size. Although small- to medium-sized enterprises (SMEs) are inherently customer-oriented, research has identified that they have significantly lower levels of competitor orientation than large firms and that competitor orientation is significantly related to organisational performance. In addition, studies have illustrated that SME success is linked to innovative problem solving, new product development and resource optimisation. SMEs are inherently innovative in how they adopt creative approaches to overcome constraints associated with their size. Given that SMEs often neglect to focus on competitors, this study explores the relationship between competitor orientation and organisational performance through an innovation lens. This study uses a qualitative research approach to investigate seven successful SMEs as case studies. The findings indicate that SMEs seeking optimal organisational performance should pay close attention to direct and indirect competitors in order to identify opportunities and build sustainable competitive businesses.     

International Opportunity Recognition among Small and Medium‐Sized Family Firms*

Current research in the field of entrepreneurship emphasizes the importance of opportunity recognition as a key element in the entrepreneurial process. It has been recognized that network ties, activeness and alertness, and prior knowledge are related to how entrepreneurs recognize new opportunities. However, it is unclear how important these factors are when a firm explores opportunities for entry into a foreign market. In this exploratory case study, covering the international opportunity recognition of eight family‐owned small and medium‐sized enterprises (SMEs), we found that the firms in question mainly recognized international opportunities by establishing new formal ties rather than using existing informal or family ties. The findings also indicated that due to the small size and the flexibility of the management team in family SMEs, these firms were able to react quickly to new international opportunities. However, there was no direct relationship between the prior knowledge of the firms and their international opportunity recognition. In addition, we found that trade exhibitions formed the primary context for the international opportunity recognition of the SMEs in this study. These findings motivate a set of five propositions that may lead to further studies on this topic.     

Capabilities, Proactive CSR and Financial Performance in SMEs: Empirical Evidence from an Australian Manufacturing Industry Sector

Proactive corporate social responsibility (CSR) involves business strategies and practices adopted voluntarily by firms that go beyond regulatory requirements in order to manage their social responsibilities, and thereby contribute broadly and positively to society. Proactive CSR has been less researched in small and medium enterprises (SMEs) compared to large firms; and, whether SMEs are ideally placed to gain competitive advantage through such activity therefore remains a point of debate. This study examines empirically the association between three specified capabilities (shared vision, stakeholder management and strategic proactivity), proactive CSR and financial performance in SMEs. Using quantitative data collected from a sample of 171 SMEs in the machinery and equipment sector of the Australian manufacturing industry, we find that all specified capabilities are positively associated with adoption of proactive CSR by SMEs, and that proactive CSR is, in turn, associated with an improvement in firm financial performance. Evidence of a fully mediating role for proactive CSR on the association between capabilities and financial performance presented in this study aligns with RBV theory that suggests adoption of value-creating strategies that make the most effective use of a firm’s capabilities is essential to financial success. The study contributes to the CSR literature by demonstrating a case for SMEs being able to maximise financial returns whilst proactively making progress towards CSR.     

A 'business opportunity' model of corporate social responsibility for small- and medium-sized enterprises

In their book 'Corporate Social Opportunity', Grayson and Hodges maintain that 'the driver for business success is entrepreneurialism, a competitive instinct and a willingness to look for innovation from non-traditional areas such as those increasingly found within the corporate social responsibility (CSR) agenda'. Such opportunities are described as 'commercially viable activities which also advance environmental and social sustainability'. There are three dimensions to corporate social opportunity (CSO) – innovation in products and services, serving unserved markets and building new business models. While small- and medium-sized enterprises (SMEs) have traditionally been presented as non-entrepreneurial in this area, this paper demonstrates how SMEs can take advantage of the opportunities presented by CSR. Using data from 24 detailed case studies of UK SMEs from a range of sectors, the paper explores the numerous CSR opportunities that present themselves to SMEs, such as developing innovative products and services and exploiting niche markets. There are inevitable challenges for SMEs undertaking CSR, but by their very nature they have many characteristics that can aid the adoption of CSR; the paper explores these characteristics and how the utilisation of positive qualities will help SMEs make the most of CSOs. Integrating CSR into the core of a company is crucial to its success. Using the case studies to illustrate key points, the paper suggests how CSR can be built into a company's systems and become 'just the way we do things'. There are a number of factors that characterise the CSO 'mentality' in an organisation, and Grayson and Hodges's book describes seven steps that will move a company in the direction of a 'want to do' CSO mentality. This paper adapts these steps for SMEs, and by transferring and building on knowledge from the 24 detailed case studies, it develops a 'business opportunity' model of CSR for SMEs.     

Overcoming the double hurdles to investing in technology

Technological activities of small and medium-sized enterprises (SMEs) have received considerable attention from researchers and policy makers since the mid-1980s. Small firms could nurture entrepreneurship and facilitate the creation and application of new ideas. In spite of their potential in generating innovations, it is also observed that SMEs shy away from formal R&D activities, and the firm size itself seems to be a barrier for R&D activities. SMEs operating in developing countries face extra hurdles to investing in R&D. Given the massive share of SMEs, it becomes crucial to realize their developmental potential in developing countries. In this paper, we study the drivers of R&D activities in SMEs in Turkish manufacturing industries by using panel data at the establishment level for the 1993–2001 period. Our findings suggest that SMEs are less likely to conduct R&D, but if they overcome the first obstacle of conducting R&D, they spend proportionally more on R&D than the LSEs do. R&D intensity is higher in small than in large firms. Moreover, public R&D encourages firms to intensify their R&D efforts. The impact of R&D support is stronger for small firms.     

The Behaviour of Graduates in the SME Labour Market: Evidence and Perceptions

This paper uses three surveys of graduates' and undergraduates' evaluations and perceptions of the conditions of work in small and medium-sized enterprises (SMEs) in the U.K. The first survey addresses the relationship between the actual career profiles of graduates and their perceptions of work in small vis-à-vis large companies. The second survey is a large-scale national study of U.K. graduates' employment patterns. The third survey asked undergraduates how they expected working conditions might differ across firm size. The distribution of graduates across firm size is presented; this shows graduates to be disproportionately employed in larger firms. The work of graduates across firm size is then described in terms of earnings; work bargaining and fringe benefits; training and the internal labour market; and the work environment. For each facet, perceptions about work conditions are also explored. The evidence shows the working conditions for graduates are lower quality in SMEs and that graduates broadly perceive this to be the case. The implications for policies which overlook these conclusions are discussed.     

How SMEs exploit their intellectual property assets: evidence from survey data

This paper seeks to understand how motives to patent affect the use of the patent portfolio with a particular focus on motives aimed at the monetization of intellectual property. The analysis relies on data from an international survey conducted by the European Patent Office. There are three main results. First, small- and medium-sized enterprises (SMEs) exhibit a much stronger reliance on ??monetary patents?? than large companies and nearly half of the SMEs in the sample patent for monetary reasons. Second, SMEs tend to use their patents more actively than large firms. Third, smaller companies generally have a higher proportion of their portfolio that is licensed, but the licensing rate is significantly higher in the USA. An American SME is twice as likely as a European SME to have a high share of its portfolio that is actually licensed, witnessing a fragmented market for technology in Europe.     

Internationalization of Smaller Firms: Opportunity Development through Networks

This article aims to contribute toward a better understanding of the opportunity development process that rapidly internationalizing small and medium‐sized enterprises (SMEs) undergo. Little is known about how SMEs overcome challenges in the process of recognizing and exploiting market opportunities during their rapid expansion abroad. This article presents a longitudinal case study that illustrates how a firm's relationships with business, social, and political actors enhance its opportunity development during the internationalization process. The findings highlight that conducting matching activities at different levels helps the firm overcome challenges and succeed in developing new opportunities for continued expansion abroad. This study contributes to research on rapidly internationalizing firms by broadening the empirical and theoretical understanding of the opportunity development process for smaller firms. © 2015 Wiley Periodicals, Inc.     

The impacts of network relationships on SMEs' internationalization process

In today's globalization era, more and more firms are striving to have an international presence, even though they face many challenges. Based on a multisite case study method, this article examines how indigenous Malaysian small and medium‐sized enterprises (SMEs) use their network relationships to facilitate their internationalization process. The evidence from the case of three software firms and one control firm in this study support the firms' internationalization process in the ways that network relationships trigger and motivate them to internationalize, influence their marketselection decision and mode‐of‐entry decision, help them gain initial credibility, allow access to additional relationships and established channels, help in lowering cost and reducing risk, and influence their internationalization pace and pattern. © 2006 Wiley Periodicals, Inc.     

What Sparks Ethical Decision Making? The Interplay Between Moral Intuition and Moral Reasoning: Lessons from the Scholastic Doctrine

There has been limited coverage of the corporate responsibility (CR) practices of small and medium-sized enterprises (SMEs) in the mainstream CR literature. Furthermore, there has been no systematic analysis of the responsibilities of the high value jewellery industry and jewellery SMEs in particular. This study explores the potential for harm and value creation by individual stakeholders in fine jewellery production. Using the harm chain and institutional theory to frame our investigation, we seek to understand how small businesses within the fine jewellery industry respond to the economic, social and environmental challenges associated with responsible jewellery production, and to investigate how they perceive and negotiate the tensions between responsibility and the resistance derived from the operational norms of secrecy and autonomy within the industry. Our exploratory research provides illustrative examples of how complex harm networks operate within and across the fine jewellery industry, and demonstrates the inter-relationships that exist across the different stages of the fine jewellery harm chain. Findings suggest that institutional forces are coalescing towards a more responsible agenda for the fine jewellery industry. Moreover, while CR is a tool to disrupt harmful institutional norms and practices within such an industry, it requires the co-creation of new transformative business models and multi-stakeholder involvement including firms (SMEs and MNEs), trade associations, non-governmental organisations and consumers. Solutions include national and international legislation, price adjusted certification routes for small firms, harmonisation of industry CR standards to reduce overlap in certification and regulation and gem and precious metal “track and trace” schemes.     

An analysis of U.S. small and medium‐sized manufacturers' international business relationships

Notwithstanding the dominant role of the United States in world trade, little is known about the relationships between smaller indigenous manufacturers and their foreign customers and how these differ from domestic market relationships. Using data from a recent study among 201 U.S. small and medium‐sized enterprises (SMEs), the article reveals that (a) these firms tend to put much more emphasis on the domestic side of their business, while the foreign market receives secondary treatment; (b) the atmosphere governing their relational exchanges differs in the two types of markets, being relatively healthier in domestic business; and (c) their domestic business performance levels, although moderate, are significantly higher than those found in foreign markets. © 2004 Wiley Periodicals, Inc.     

The Influence of IT Management Sophistication and IT Support on IT Success in Small and Medium‐Sized Enterprises

This study examined three factors that influence information technology (IT) success in small and medium‐sized enterprises (SMEs): internal IT support, external IT support, and IT management. Using survey data gathered from 289 small and medium‐sized Chartered Accounting firms in New Zealand, the results suggest that IT management in SMEs is best understood as a multidimensional concept consisting of practices related to: IT planning, IT organizing, IT controlling, and IT leading. This view clarifies and improves our understanding of the nature and character of IT management in SMEs. The results show that some SMEs are significantly more sophisticated than others in terms of their IT management practices. Both IT planning and IT leading were found to influence IT success.     

Realising the Marketing Advantages of International Standard-Setting Activities: Opportunities for Innovative Technology-Based SMEs

Despite a growing literature exploring the impact of international standards on the long-term competitive position of large technology-based multinational enterprises and, as a corollary, how these firms participate in standard-setting, comparatively little attention has been given to these phenomena with regard to the internationalisation of small and medium-sized enterprises (SMEs). This is perhaps a reflection of a 'master storyline' that assumes international standard-setting activities are almost solely the purview of larger organisations. Accordingly, this paper explores how small and medium technology-based enterprises participate in international standard-setting processes and the strategic marketing advantages that may accrue through such participation, using a qualitative case-study approach involving six technology-based SMEs in Australia. Summary frameworks depicting different means of participation and marketing related benefits are presented. The findings suggest that innovative technology-based SMEs may use the international standard-setting environment and processes more strategically than often supposed.