An Empirical Study of Buyer–Supplier Relationships within Small Business Organizations

A paradox exists in small business organizations; although effective buyer–supplier relationships are essential to the success of small businesses, these organizations may not have the purchasing and selling power in terms of managerial resources to implement them. This provides us an opportunity for research to determine how well developed are buyer–supplier relationships within small business organizations. Grounded in transaction cost and resource dependence theory, this paper presents and empirically tests a model that examines the relationships between buyer and supplier specificity and long‐term buyer–supplier relationships and the latter's impact on organizational performance from the buyers' perspective. The results of this study provide insight into the development and impact of buyer–supplier relationships within small business organizations. Several managerial implications can be determined.     

Trusting and Monitoring Business Partners throughout the Relationship Life Cycle

Purpose: The goal of this research is to understand the theoretical and empirical confluence of multi-dimensional trust with the role of monitoring as business partnerships unfold and evolve dynamically throughout the course of the relationship life cycle.

Methodology: A pilot study is run in which in-depth interviews are conducted with managers to glean their insights regarding the theoretical questions and to verify terminology for survey items. A large-scale survey study is then conducted to test hypotheses about the relationships among the focal constructs. The participants in both studies are real procurement professionals reporting on their primary supplier relationships. The qualitative study and the samples of real world managers enhance the external validity of this research.

Findings: In early stages of business relationships, monitoring and benevolence trust interact to positively impact business performance. Continued monitoring in later stages interact with benevolence trust to performance detriment. Conversely, monitoring and competence aspects of trust hurt business performance in earlier life stages.

Research Implications: Theoretical frameworks that include the constructs of multidimensional trust, monitoring, and relationship life cycle stages can build on the nuanced 3-dimensional contingencies established in this research. In particular, this research furthers the concepts of monitoring and the relationship life cycle.

Practical Implications: There is a time and a place to trust one's business partners, and a time and a place to verify their trustworthiness. As business partnerships are forged, monitoring and benevolence trust can be particularly fruitful.

Contribution: In this research, the authors build on the business marketing literature that has begun to delineate the benevolence and competence dimensions of trust in business relationships; they demonstrate the role that partner monitoring has in maintaining business commitments; and establish how these effects are modified over the stages of the relationship life cycle; i.e., from exploration, to build-up, maturity, and decline.     

Small Business and Sport Sponsorship

This exploratory study examines 18 small organisations who engaged in the sponsorship of local sport, rugby league teams, in Australia. The literature sponsorship is applied to local activities and small business, thus filling a gap in the literature. The study examined seven main areas: (1) Responsibility for sponsorship arrangement; (2) Firms objectives for choosing sponsorship; (3) Types of other spon- sorship activities; (4) Perceived sponsorship effectiveness; (5) Sponsor- ship and the promotional mix; (6) Sponsorship entitlements; and (7) Demographic questions about the organisation. Similarities and differ- ences to results of earlier literature in this area are discussed. Directions for hture research are also explored.     

Improving Relationships with Small Business Buyers

Abstract

This paper focuses on a critical examination of the potential role of balance theory as a tool for marketers who seek to enhance their relationships with small business buyers. The nature of the theory and its potential contributions are discussed. An empirical test of the theory is provided and implications based on this assessment are set forth. The data employed in the test suggest that this theory has potential valuable contributions for marketers who serve small business buyers.     

Small Business Credit Scoring and Credit Availability*

U.S. commercial banks are increasingly using small business credit‐scoring models to underwrite small business credits. The paper discusses this lending technology, evaluates the research findings on the effects of this technology on small business credit availability, and links these findings to a number of research and policy issues.     

The Role of Business and Friendships on WeChat Business: An Emerging Business Model in China

ABSTRACT

WeChat business is an emerging way of doing business in China, which can be considered as a marriage between traditional e-business and social networking communications. In WeChat business, firms have developed customer relationships along two distinct ways: business relationships and friendships. However, research on the combination of business relationships and friendships is relatively nascent, and there are contradictory findings. In this study, we examine the effectiveness of the two relationship strategies using data from a field experiment through the WeChat platform by an apparel firm. Results from the field experiment suggest that development of friendships with new customers can help the strategy of developing business relationships; but developing friendships and business relationships with experienced customers negates each other. The study contributes to the literature on relationship marketing and role theory, and helps WeChat managers clarify how new social networking relationships with customers can be effectively leveraged.     

Business Survival and Success of Young Small Business Owners

Little empirical evidence provides insight in person-oriented drivers of business survival and success of small business owners. In this paper I perform a duration analysis of business survival amongst young white (self-employed) small business owners in the U.S. Compulsory exits are distinguished from voluntary exits. This enables an alternative definition of business success: the longer one can survive and prevent inLvoluntary exit, the more successful one is. Potential drivers of survival are derived from recent empirical evidence in related studies. The potential drivers of success are also derived from historical economic thinkers such as Marshall and Schumpeter. The estimated hazard rates are affected by characteristics of the small business owner and business conditions.     

Effects of Concentrated Ownership and Owner Management on Small Business Debt Financing*

Using unique data and a new powerful Monte Carlo-based statistical tool, we examine the effects of concentrated ownership and owner–management (CO-OM) on the creditor–shareholder agency conflicts in small firms. A significant CO-OM effect from the small business owner's view, but insignificant from the commercial lenders' perspective, is found. Special features of informational asymmetry problems in small firms with CO-OM are also highlighted. Theoretical and empirical contributions are made to the small business management and corporate governance literature. Findings obtained from this research have important implications for small business practitioners as well as researchers, and this study can serve as a reference for policymakers and institutional lenders to assist small firms in successfully raising money through debt financing. In addition, a new powerful methodology is introduced to deal with various potential statistical biases and can be further applied to this line of research.     

A Meta-Analysis of Research on Information Technology Implementation in Small Business

The small business sector is one of the fastest growing sectors of the economy. The firms in this sector are becoming increasingly dependent on information systems (IS) for their operations. Traditional research in IS has primarily focused on large corporations. The problems, opportunities, and management issues encountered by small business in the IS area are unique, and research is too limited to provide useful guidelines. This study compares the research literature on IS implementation and research on IS in small business, examines the commonality and differences, and identifies research gaps. An overall research framework is developed to review the research in the two areas and determine areas of opportunity. As a follow-up of this analysis, a research model is developed to explore the factors influencing the adoption of computer-mediated communication technologies in small business. The model incorporates some of the innovation factors that are identified as potential gaps in the earlier analysis. The research model evaluates the impact of 6 factors-perceived usefulness, cost, compatibility, top management support, competitive advantage, and size-on the adoption of computer-mediated communications technologies. A telephone interview was used to collect data from 207 firms. The results of data analysis reveal that competitive advantage, top management support, and size are important determinants of adoption of computer-mediated communication technologies.     

Nature of Buyer–Supplier Relationship: Small Businesses in a Small City

If the proposition of Williamson that “highly standardized transactions are not apt to require a specialized governance structure” (1979, p. 248) is to be accepted, then a discrete transaction market between small business owners and their suppliers can be easily organized in the market. This view essentially nullifies the possibility of there being a relational transaction. In this backdrop, this research attempts to explore the small buyer–supplier relationship in the context of a small city. Keeping embeddedness (Granovetter, Am. J. Sociol., 1985; 91: 481–510) as a theoretical foundation, we explore the social content in an apparently pure economic exchange. Although, earlier attempts (Khoja and Kauffman, J. Small Bus. Manag., 2012; 50: 20–40; Uzzi, Am. Socio. Rev., 1996; 61: 674–698) conformed to embeddedness in transactions between a buyer and a supplier among businesses of various sizes, they largely ignored very small‐size buyers and suppliers owing to the miniscule size of business transactions and less frequent interactions between buyers and suppliers. Based on the grounded theory approach (Strauss and Corbin, Basics of Qualitative Research‐Grounded Theory Procedures and Techniques, 1990), in this study, we conducted in‐depth interviews with 57 very small business owners to develop detailed narratives. These narratives were organized under four themes: Contractual relationship, Strategic information sharing, Caste as a proxy, and Trust Factor. The findings clearly indicate that small business owners foster continued relationships with their suppliers, owing to social conditioning factors.     

The Role and Value of Global Business Research: Perspective of a Business School Dean

The scope of this article is two-fold. First, it looks at business research in general, in various countries, as a task that the dean wants to have faculty members pursue, to attain goals such as accreditation and ranking with organizations such as the AACSB, Equis, the Financial Times, and US News & World Report. And second, it looks at international business research as part of what business schools produce and what a dean can encourage. As more academics realize the importance of international competition, and also of dealing with people from other cultures and countries, IB research is becoming more acceptable in mainstream publications as well as in specialized international business ones. Key questions discussed here include encouraging, measuring, promoting, and financing international business research.     

Firm Size and the Nature of International Relationships: The Case of Globally Integrated Small Firms

During the past quarter of a century or so there was a marked increase in the number of studies exploring the internationalization of the small firm. The basic premise of this body of literature was that the size of the firm mattered in the process of internationalization. Research in this area focused heavily on types of forward integration (particularly exporting), and examined a handful of key research questions: which national markets shall a small firm enter, how, and when, as well as the impact of internationalization on business performance. Rather unexpectedly, to date there have been no studies exploring the impact of firm size on the nature of relationships created by small firms. This paper aspires to address this gap in the literature by focusing upon globally integrated small enterprises. Drawing on the evidence of 755 firms in five EU countries the paper argues that there are no profound differences in the nature of international relationships created by globally integrated small firms in comparison to their large‐scale counterparts. More importantly, however, the paper suggests that power asymmetry and mutuality may coexist in international relationship, and small firms may often occupy positions of power in global commodity chains.     

Networking and growth of young technology-intensive ventures in China

More often than not, new ventures lack established products, known technologies, longstanding customer relations, experienced managerial teams, sufficient capital, and strong reputations. Almost by definition, small, new firms lack the resources of many larger, established firms. The task of an infant firm, and a measure of its success, is to make a transition from being resource weak to being resource strong.How can resources that are critical for profitable growth be acquired for the resource weak new venture? Researchers have found that entrepreneurs can gain access to valuable resources and they can seek to achieve competitive advantage through “networking activities.” Forming and utilizing available relationships with external organizations can allow entrepreneurs to build credibility, gain advice, financing, and customer access, build a positive image and obtain resources at below-market prices, and obtain channel access, information, and innovations. Business relationships with other organizations allow an entrepreneur to achieve desired business results through “asset parsimony.”A favorable view toward networking for new ventures leaves a number of unanswered questions, however. Relevant research questions might include, who should the entrepreneur seek as a business partner? Are all inter-organizational relationships equal, or are some types more valuable to new ventures than other relationships? Do firms relying on high levels of networking activities actually outperform firms that less actively seek resources through external organizational relationships?The present study provides a specific understanding of the concept of networking for entrepreneurs. We propose that networking can be understood in terms of “range,” the number of external relationships to obtain resources, and of “intensity,” the frequency of contact of and amount of resource obtained from these relationships. This research project evaluates the range and intensity of networking among high-growth and low-growth entrepreneurial ventures.Extensive interviewing with managers of six young technology-oriented firms in the People's Republic of China (PRC) affirmed the importance of entrepreneurial networking. Managers in the three high-growth firms reported greater range and intensity of business networking than did managers of three low-growth firms, matched by industry and age. Moreover, the relationship between networking activities and growth transcended the stage of firm development.Where networking range and intensity are deemed important in the growth process, new venture success may call for entrepreneurs to reach out deliberately to external organizations to capture needed resources. To a certain extent, such networking activities run counter to important entrepreneurial motivations of independence and autonomy. The concept of networking, and the results of this study, imply that entrepreneurs need to combine the spirit of independence with the reality of resource dependence, and they need to balance personal autonomy with strategic business relationships.This study also contributes to the understanding of entrepreneurship in our increasingly global economy, particularly in the PRC. Business relationships between the United States and the PRC have been expanding rapidly in the last decade. Many foreign businesses seek license agreements, joint venture partners, equity participation, or channel relationships with young ventures in that country. Do the same rules of networking apply in the PRC as the literature suggests apply in the United States? New ventures in this study were found to engage in processes of networking activities consistent with those in the West. Although networking activities may have different cultural roots, firm success appeared influenced by the same principles of networking.     

Empirical Business Ethics Research and Paradigm Analysis

Despite the so-called ‘paradigm wars’ in many social sciences disciplines in recent decades, debate as to the appropriate philosophical basis for research in business ethics has been comparatively non-existent. Any consideration of paradigm issues in the theoretical business ethics literature is rare and only very occasional references to relevant issues have been made in the empirical journal literature. This is very much the case in the growing fields of cross-cultural business ethics and undergraduate student attitudes, and examples from these fields are used in this article. No typology of the major paradigms available for, or relied upon in, business ethics has been undertaken in the wider journal literature, and this article addresses that gap. It contributes a synthesis of three models of paradigms and a tabulated comparison of ontological, epistemological and methodological assumptions in the context of empirical business ethics research. The author also suggests the likely (and usually unidentified) positivist paradigm assumptions underlying the vast majority of empirical business ethics research published in academic journals and also argues for an increased reliance on less positivist assumptions moving forward.     

A Model of Interorganizational Networking Antecedents,Consequences and Business Performance

Purpose: This quantitative study intended to examine the communication interactions that develop within a business network among various actors (i.e., customers, providers, cooperators, etc.), together with their effects upon business networking and performance. To these ends, we developed a conceptual model of dyadic marketing-oriented and network-oriented communication exchanges (i.e., interorganizational antecedents), interorganizational networking consequences, and business performance. Specifically, interorganizational networking consequences were examined in terms of tactical and strategic cooperation, whereas business performance was examined in terms of adaptability, productivity and efficiency.

Methodology/approach: To set the hypotheses of the study we delved into the wide stream of marketing literature pertaining to interorganizational networks and business-to-business relationships, and specifically to the marketing orientation theory, the social network theory, and the IMP approach. These research hypotheses were tested using advanced statistical analysis and causal modeling. The research sample comprised 1,000 business-to-business international companies, which were mostly U.S., and European and were randomly selected from the yahoo.com business-to-business companies’ subdirectory. The data collection involved a two-wave e-mail survey, in which the quantitative research instrument was emailed to the respective marketing directors’ personal accounts. Totally 249 high ranking marketing executives responded, thus yielding a 24.9% response rate. The selected data were, then, subjected to rigorous advanced statistical analysis of structural equation modeling, using the AMOS21 statistical package, to test reliability and stability of selected measures and validity of the research model, as a whole.

Findings: Overall, the research findings provided sufficient evidence that the proposed model was robust. Moreover, the findings supported that communication exchanges that deploy within a wide array of participants (i.e., within a network of organizational members, customers, partners, and other interacting partners within a market), may have stronger explanatory powers upon a company’s networking effects and business performance, than communication exchanges that evolve merely at a dyadic company-customer level.

Originality/value/contribution: This research is original; that is, it deals with empirical, quantitative data and makes an attempt to combine marketing concepts mainly from 3 marketing streams studying the long-term business-to-business relationships. Our approach is based on existing marketing literature, suggesting that networks, apart from being embedded in previous relationships and interactions, they may also be based on more loosely coupling between organizations. Thus, we use the IMP approach to formulate the measures of our study; however, we don’t discriminate between strong and weak ties in relationship bonding. In this research we focus on specific communication behaviors that may nurture interorganizational networking and look for effects upon cooperation and business performance. The research findings imply that marketing executives would worthwhile expand their communication exchanges beyond their narrow customers’, or providers’ network, to the wider array of trustworthy business circle, as such a behavior may largely favor their companies’ adaptability to environmental changes, flourish innovation, and lead to synergies in efficiency and productivity gains.     

Business Marketing Comes of Age: A Comprehensive Review of the Literature

ABSTRACT

Since 1978 business marketing has seen a great deal of research activity. It is reasonable to ask whether this has led to advances in theory development and a general increase in our level of knowledge of business marketing. This article reviews the business marketing literature from 1978–1997 from twenty-three journals, five sets of proceedings, and selected books of articles in an attempt to answer that question. Over two thousand articles were examined to assess the current state of the field and suggest directions for future development. As the sheer number of articles since 1978 would suggest, the field of business marketing has attracted a considerable amount of attention. Close examination of the past twenty years of research, however, clearly indicates that certain areas have received a disproportionate share of the research effort. Organizational buyer behavior, strategy and planning, and sales management accounted for over forty percent of the articles published. Important areas such as computers and technology in business markets, marketing to the government, ethics in business markets, and pricing, in contrast, have received relatively little research attention. Regardless of the uneven coverage, the research in business marketing over the past twenty years has been conceptually and empirically strong. Changes in the way business is done has also resulted in a recent surge in theory development in the area of buyer-seller relationships within the context of relationship marketing. Increased attention has also centered on cross functional issues, networks, and strategic alliances.     

Developing M-Education for Entrepreneurs and Small Businesses

Abstract

Mobile computing has the potential to be of great benefit to aspiring entrepreneurs and small business owners. Small businesses and entrepreneurs have been the subject of much literature, national policy and regional policy. A recurring concern has been the inability to transfer the benefits arising from new technologies to this important segment of the business community. The simplest and most obvious manner of rectifying these situations would be to have the small business sector participants come to the local colleges, universities, or small business development centers. However, due to a plethora of external and internal barriers, most attempts to reach this segment have proven quite futile. This gives rise to Mobile education (M-education). This article explores the possibilities and limitation of M-education. It gives a potential way of utilizing the technology and potential partnership in the Inland Empire of Southern California. The partnership is known as TECH-BOOST.     

African American Small Business Owners' Attitudes Toward Business Training

The attitudes toward training courses are documented for the rapidly growing African American segment of small business owners. The study provides evidence supporting the training-business creation model suggested by the Small Business Act and by Becker's work on human capital. Over 700 responses to a mail survey were divided into African American small business owners and Caucasian American small business owners. The African American small business owners rated the training courses as significantly more important than the Caucasian American small business owners for all 23 of the areas tested. A matched sample was created from the data set to evaluate the idea that demographics such as type of business and number of employees may have influenced the results. The findings from the matched sample were consistent with the findings from the total sample. Various reasons for these unusually strong results are offered as well as directions for future research.     

On the Influence of Interpersonal Relations on Business Practices in Latin America: A Comparison with the Chinese Guanxi and the Arab Wasta

The connection between interpersonal relationships and business practices is currently an object of study in the field of international business. The authors have identified a significant body of research literature characterizing this phenomenon in China, where it is denominated as guanxi, as well as a recent interest of the academy in studying the Arab wasta (i.e., clout or influence). The authors argue that a similar phenomenon occurs in Latin America and identify patterns similar to those of guanxi and wasta in a cultural artifact called compadrazgo. The article offers insight for managers and individuals interested in doing business in Latin America. © 2015 Wiley Periodicals, Inc.