Board Composition in Small and Medium‐Sized Family Firms*

This study focuses on the determinants of board composition in Belgian small and medium‐sized family firms. It extends the empirical literature on board composition in private small and medium‐sized family enterprises by integrating several dimensions of the “family component” in the research model. Furthermore, using a multinomial logit model, we examine in which circumstances family firms opt for (1) a family board, (2) an inside board, or (3) an outside board. Results suggest that family‐related contingency variables are far more important than CEO‐related or control variables, giving support to the argument that board composition in family firms is a reflection of the family characteristics and objectives. Moreover, the results suggest that a resource dependence and added value perspective explain more of the variation in board composition than agency considerations.     

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.     

Brand Management in Small to Medium‐Sized Enterprises*

Although an impressive body of literature has emerged focusing on the critical activities involved in brand management for larger organizations with well‐established brands and substantial marketing budgets, no research has been undertaken to examine branding within small to medium‐sized enterprises (SMEs). The present study therefore seeks to assess the nature and scope of brand management within an SME context. Findings show significant differences between small and large organizations along 9 of the 10 brand management dimensions reported in Keller's brand report card. Moreover, different brand management practices are associated with business performance in SMEs. Implications of the study are highlighted, limitations noted, and directions for future research outlined.     

Long‐Term Orientation and Commitment in Export Joint Ventures among Small and Medium‐Sized Firms

Alliances may be an important tool for overcoming the resource and capability deficiencies facing small and medium‐sized enterprises (SMEs), as they help strengthen their market position and facilitate access to new markets. In this paper we focus on domestic joint ventures (JVs) for export purposes. Our aim is to analyze the influence of partners' long‐term orientation on their commitment, while looking into the key antecedents of long‐term orientation: complementarity of partners' resources and trust. The hypotheses set forth are tested on a sample of 70 Spanish domestic export JVs. The data were analyzed using partial least squares (PLS) analysis. Our paper contributes to the literature on export JVs and SMEs by providing evidence that long‐term orientation reinforces commitment to devoting the necessary resources and efforts to enable the export JV to succeed. The results also indicate that trust decisively determines the long‐term orientation of the partners to an export JV, and that complementarity of resources plays a relevant role in the development of long‐term orientation by facilitating trust.     

Market Orientation and Internationalization in Small and Medium‐Sized Enterprises

This article builds on studies from the literature on market orientation (MO) and internationalization to develop a model and a set of hypotheses regarding the relationships among MO, knowledge acquisition (KA), and market commitment (MC), and the direct and indirect effects of these variables on the performance of small and medium‐sized enterprises (SMEs) in foreign markets. The model and its hypotheses are tested by means of an empirical study of a multi‐industry sample of Spanish SMEs operating in foreign markets. The results, obtained by structural equation modeling, indicate that a direct positive relationship exists between MO and a strategy of internationalization, and that the effect of MO on performance in foreign markets is moderated by KA and MC.     

Credit Risk Assessment and Relationship Lending: An Empirical Analysis of German Small and Medium‐Sized Enterprises*

We estimate a logit scoring model for the prediction of the probability of default by German small and medium‐sized enterprises (SMEs) using a unique data set on SME loans in Germany. Our scoring model helps SMEs to gain knowledge about their default risk, which can be used to approximate their risk adequate cost of debt. This knowledge is likely to lead to a detection of hold‐up problems that German SMEs might be confronted with in their bank relationships. Furthermore, it allows them to monitor their bank’s pricing behavior and it reduces information asymmetries between lenders and borrowers. Finally, it can influence their future financing decisions toward capital market‐based financing.     

Performance Effects of External Search Strategies in European Small and Medium‐Sized Enterprises

There is little evidence regarding the performance impact of open innovation on small and medium‐sized enterprises (SMEs), especially across different firm‐size categories and sectors. Using new survey data from 28 European countries, we specify ordered logit and generalized proportional odds models to explore how seven individual external search strategies (knowledge sources) affect SME innovation performance across different size categories and sectors. While we find some consistently positive effects, in particular from using customers as an external knowledge source, we also find that some search strategies may not be beneficial. These findings suggest managerial and policy implications.     

Comparing Innovation Capability of Small and Medium‐Sized Enterprises: Examining the Effects of Organizational Culture and Empowerment

This study analyzes the impact of organizational culture and empowerment on innovation capability, and examines the peculiarities of these effects. The study's hypotheses are tested by applying both individual and firm‐level analyses to survey data collected from 743 employees from 93 small and medium‐sized firms located in Turkey. For medium‐sized enterprises on both the individual and firm level of analysis, results suggest that collectivism and uncertainty avoidance are positively associated with empowerment, whereas power distance is negatively related to empowerment. Assertiveness focus has no relations with empowerment and innovation capability, yet among cultural dimensions, only uncertainty avoidance is related to innovation capability. For small‐sized enterprises, findings suggest that both power distance and uncertainty avoidance are linked to both empowerment and innovation capability on the individual level, whereas two new paths between collectivism and innovation capability and between assertiveness focus and empowerment are found on the firm level. Also, empowerment is found to be positively related to innovation capability for both small and medium‐sized enterprises (SMEs) on both the individual and firm level. In terms of managerial practice, our study helps clarify the key role played by cultural dimensions in the process of shaping an empowering and innovative work environment. Findings also reveal that managers should focus on participative managerial practices (e.g., empowerment) to promote innovation capability of SMEs.     

Formal Development Opportunities and Withdrawal Behaviors by Employees in Small and Medium‐Sized Enterprises

This study explores direct and indirect relationships between involvement in formal training and development events, employee attitudes and withdrawal responses including turnover intentions and neglectful behavior for those employed in small and medium‐sized enterprises (SMEs). Questionnaire data were obtained from 185 staff employed in a diverse range of SMEs. Our results suggest that employees that participate in more training and development events are less likely to be considering leaving their employer and less likely to engage in neglectful behavior. However, the analysis revealed that the effects of participation in formal training and development are fully mediated by perceptions of organizational support and job satisfaction. In contrast to results from studies in large organizations, affective commitment was not found to be an influential determinant of employee exit intentions or neglect.     

Competing Risk Model for Technology Credit Fund for Small and Medium‐Sized Enterprises

Despite the need to foster a technology‐intensive industry, most Korean SMEs (small and medium‐sized enterprises) are faced with the difficulty of raising funds. To resolve this problem, the government set up the technology credit fund to give loans to enterprises that achieve a certain technology evaluation score. However, many of the recipient SMEs fail to pay back the loans for various reasons. In this paper, we distinguish two causes of default due to owner and company, respectively, using the competing risk model. The proposed prediction models for competing defaults are expected to contribute to the healthy management of technology finance.     

Explaining the Strategic Groups–Firm Performance Relationship: A Multilevel Approach Applied to Small and Medium‐Sized Hotel Companies in Spain*

One of the main research questions in the field of strategic management is why firms obtain different performance levels. This paper answers this question from the strategic groups approach. This paper analyzes the linkage between strategic groups and firm performance offering a multilevel analysis about the relative importance of intergroup and intragroup performance differences based on the use of hierarchical linear models. The results show that intragroup differences explain firm performance better than intergroup differences.     

Open Innovation in Small and Medium‐Sized Enterprises (SMEs): External Knowledge Sourcing Strategies and Internal Organizational Facilitators

In this paper we explore how small and medium‐sized enterprises (SMEs) engage in external knowledge sourcing, a form of inbound open innovation. We draw upon a sample of 1,411 SMEs and empirically conceptualize a typology of strategic types of external knowledge sourcing, namely minimal, supply‐chain, technology‐oriented, application‐oriented, and full‐scope sourcing. Each strategy reflects the nature of external interactions and is linked to a distinct mixture of four internal practices for managing innovation. Both full‐scope and application‐oriented sourcing offer performance benefits and are associated with a stronger focus on managing innovation. However, they differ in their managerial focus on strategic and operational aspects.     

Examining the Link between Entrepreneurial Orientation and Learning Processes in Small and Medium‐Sized Enterprises

The present study unravels how small and medium‐sized enterprises (SMEs) learn and determines the role that entrepreneurial orientation (EO) plays in how they learn. Adopting a multilevel perspective on learning and the unique role of the management team in SMEs, the study empirically examines the “feed‐forward” learning process initiated by the intuition and interpretation of individual managers, advanced by integration on the management team level, and brought to the organizational level by institutionalization. It also identifies firm‐level EO as an antecedent to this process on all three organizational levels, highlighting the relevance of innovativeness, proactiveness, and risk‐taking with respect to learning in SMEs.     

Small and Medium‐Sized Enterprise's Entrepreneurial versus Market Orientation and the Creation of Tacit Knowledge

The ability to create tacit knowledge is important to the competitive advantage of firms in general but is critical to the survival and growth of small and medium‐sized enterprises (SMEs). Consequently, SME strategic orientations that facilitate tacit knowledge creation, especially in hostile environments, are important factors that can enhance SME competitiveness. This paper shows that while an entrepreneurial orientation (EO) and environmental hostility are positively related to an SME's cultivation of tacit knowledge, market orientation (MO) is negatively related to SME's tacit knowledge. Additionally, we find that in benign environments, the relationship between an SME's MO and tacit knowledge becomes more strongly negative than in hostile environments.     

Small and Medium‐Sized Enterprises' Collaborative Buyer–Supplier Relationships: Boundary Spanning Individual Perspectives

Boundary‐spanning individuals (BSIs) play a critical role in supply chain management, especially in small and medium‐sized enterprises (SMEs) where interactions with buyers and suppliers can depend heavily on just a few individuals. This study, utilizing data from Korean manufacturing‐sector SMEs, explores whether cooperative social value orientations of SMEs' BSIs influence the effects of collaborative buyer‐supplier initiatives. The results suggested that the performance implication of decision‐sharing initiative increases when BSIs have a high level of cooperative social value orientation. However, it also negatively moderates the relationship between risk/benefit sharing (involving financial losses or gains) and performance suggesting possible negative side effects. However, we found that such orientation also negatively moderates the relationship between risk/benefit sharing (involving direct financial losses or gains) and relationship performance suggesting possible negative side effects.     

基于创新系统理论的中小企业技术创新支持体系

依据创新系统的结构和特征,构建基于创新系统理论的中小企业技术创新支持体系的设想。完善的中小企业技术创新支持体系应由法律支持体系、联合创新的政策支持体系、技术创新服务支持体系、金融支持体系、财政税收支持体系等构成。     

The Effect of Venture Capital Investment—Evidence from China's Small and Medium‐Sized Enterprises Board

In this paper, we use a matched sample to empirically test the effect of venture capital investment on the companies listed on the Small and Medium‐Sized Enterprises Board in China. We find that Chinese venture capitalists neither add value to their invested firms in the initial public offering (IPO) process nor improve operating performance. Rather, compared with their non‐venture‐backed counterparts, venture‐backed firms are associated with a greater level of IPO underpricing and inferior operating performance both before and after IPO. Our findings in China support neither the certification/monitoring hypothesis nor the grandstanding hypothesis, but partly support the adverse selection hypothesis.     

Project Management in Small to Medium‐Sized Enterprises: Fitting the Practices to the Needs of the Firm to Deliver Benefit

Small to medium‐sized enterprises (SMEs) undertake smaller projects than larger organizations and so need more informal people focused project management practices. We investigate the nature of SMEs that leads them to adopt practices of this nature and explore comparative benefits and costs. We interviewed 19 companies and conducted a web‐based survey. SMEs adopt project management practices to fit the size of the firm and the nature of projects undertaken. The practices adopted are more customer‐focused. SMEs perceive the benefit of project management outweighs the cost, but the perceived bureaucracy and overhead was the main barrier to its adoption.     

The Influence of CEO Gender on Market Orientation and Performance in Service Small and Medium‐Sized Service Businesses

This study examines the effects of CEO gender on market orientation and performance (growth and profitability) among a sample of small and medium‐sized service businesses. Gender was found to have significant indirect effects (via market orientation) on both market performance (growth) and financial performance (profitability). That is, female‐led service SMEs perform significantly better due to their stronger market orientation relative those led by males. The findings further suggest that female‐led firms were slightly better than their male‐led counterparts in transmitting market performance into financial performance, although the differences were not statistically significant.     

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.