Investigating a neglected part of Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises?

This paper tests a theoretical model to evaluate e-business capability and value in the fast growth small-to-medium enterprise (SME) context. We propose that e-business value depends on how fast growth SMEs deploy IT resources, strategic planning, culture, and business partnerships to develop e-business capability and business process competence which help these companies to achieve outstanding business performance. Structural equation modelling is employed to test our theoretical conceptualization on a cohort of 310 Australian fast growth SMEs across different industrial sectors. The results show that IT resources, strategic IT alignment, market orientation, and business partnerships do contribute significantly and indirectly to SME performance through the development of e-business capability and business process competence. Our study provides an initial empirical evidence to understand the relationship between IT and entrepreneurial SME performance. These findings have important implications for research and business practices.     

Ethics-focused dynamic capabilities: a small business perspective

Our analysis of survey data of US small and medium-sized enterprises (SMEs) explores (1) whether firms have ‘dynamic’ capabilities that change their ethics-focused operational capabilities; (2) what effects those dynamic capabilities have on both ethical and competitive performance; and, (3) whether those effects are contingent on a firm’s entrepreneurial characteristics. Our survey reveals that about a quarter of SMEs self-report high levels of these ethics-focused dynamic capabilities. We use hierarchical OLS to analyze the survey data to find that the general effect of these capabilities is positive on an SME’s ethical performance, and that the performance effects are contingent on an SME’s degree of entrepreneurial orientation and sensitivity to changes in the business context. The main implication is that the extent of heterogeneity in types, roles, and performance effects of ‘higher-than-operations-level’ capabilities is likely underestimated in current dynamic capabilities theory and application.     

Global integration strategies of small and medium multinationals: Evidence from Taiwan

This study replicates and extends Birkinshaw et al.’s (1995) model of the predictors of business unit integration of large Western multinational corporations (MNCs). Our study investigates the global integration strategies of Taiwanese small and medium sized enterprises (SMEs) competing in the global information technology (IT) industry. It confirms the importance of some structural forces (i.e. economies of scale and standard market demands) in the global integration strategies of Taiwanese SMEs thereby expanding the applicability of existent internationalization theories developed primarily in the context of large Western MNCs to non-Western SMEs. This study finds three results that add new knowledge to the current SME literature and provides managerial implications. First, it finds a negative relationship between competitive actions and business unit integration. Second, it finds that in the optimally globalized IT industry there is no direct effect of business unit integration on performance. Third, it finds a direct effect of differential comparative advantage on performance.     

Identifying and Differentiating Key Employees from Owners and Other Employees in SMEs

This research examines how to identify and differentiate key employees from small and medium‐sized enterprises (SME) owners and other employees and how their characteristics influence firm success factors. Interviews are conducted with 14 matched pairs of entrepreneurs and key employees operating Canadian SMEs. The study develops a profile whereby the key employee typically (1) corresponds to the key success factors of the SME, (2) is willing to undertake a moderate amount of risk, and (3) differs in education and experience from the entrepreneur/owner. Although employees are important to firm strategy and culture, this is one of the first to examine key employees in small business.     

SME Growth: The Relationship with Business Advice and External Collaboration

The paper presents multivariate analysis of the relationship of SME growth with the acquisition of external business advice, whilst controlling for the influence of SME characteristics of age, manufacturing/services, high technology, innovator, level of skill of the workforce, exporter and number of competitors. The relationship of external business advice with SME performance is statistically significant for only a small number of sources and fields. Obtaining external advice in fields such as business strategy and staff recruitment is associated with positive firm performance. The main positive relationships of advice and performance are dominated by private sector sources such as lawyers, suppliers, customers and business friends/relatives. Collaborative arrangements with suppliers nationally/internationally have a strong positive relationship with employment and turnover growth; collaboration with local suppliers has a strong positive relationship with growth in profitability. There is little evidence of statistically significant relationships between government-backed providers of business advice such as Business Link and firm performance. This revised version was published online in August 2006 with corrections to the Cover Date.     

Partitioned pricing,price fairness perceptions,and the moderating effects of brand relationships in SME business markets

Partitioned pricing effects on price perceptions have been studied in the consumer (B2C) market context, but not in the business (B2B) market, and particularly not in the small- and medium-sized enterprise (SME), context. The current research investigates SME managers' affective and cognitive (e.g., price fairness perceptions) responses to partitioned pricing and extent of relationship with the selling brand. The first of three experimental studies finds that a partitioned price generates greater price fairness perceptions than an all-inclusive price. Study 2 finds that SME buyers elicit the greatest positive affect and the lowest negative affect when the buyer's firm has an established relationship with the brand and the seller partitions the price. The third study further examines the effects of relationship with the brand by separating brand mandate (i.e., when the buying firm requires employees to purchase from a specific brand) and relationship longevity.     

The Roles of Business Ethics in Conflict Management in Small Retailer–Supplier Business Relationships

Any ongoing relationship involves conflict. While facing conflict can be a serious matter for small firms with limited resources and capabilities, little is known about conflict management or the role of an ethical foundation, or business ethics, for small businesses. This study examines some influential factors regarding conflict management and the role of business ethics in satisfactory business relationship building in the context of small retailer–supplier relationships. The proposed model identifies (1) the relative importance of business ethics and role performance as antecedents and (2) two dimensions of satisfaction (social and economic) as consequences. The data, collected from small apparel retailers in the United States, clearly demonstrate the powerful role of business ethics. The positive perceptions of small retailers regarding supplier business ethics significantly reduces retailer–supplier conflict and increases retailer–supplier social satisfaction. Supplier role performance does not contribute to a reduction in retailer–supplier conflict as perceived by small retailers, but it does enhance the economic satisfaction of retailers, which further increases their social satisfaction. The functional benefits of conflict provide interesting insight. Providing several meaningful implications, this study demonstrates the unique aspects of conflict management within small retailer–supplier relationships.     

Long-term Decline of Small and Medium Size Enterprise Share

There exist few studies of long-term small and medium size enterprise (SME) share in developing countries. This paper presents and examines evidence that SME share in Venezuelan manufacturing has experienced serious decline from 1961 to present times. Evidence is given of this decline in terms of key performance measures: numbers of firms, employment numbers and manufacturing value added. An absolute decline of this stratum has also occurred from 1979 onwards. Economic modelling suggests that efficiency and innovation variables are significantly correlated with this decline while a structural variable explains movement around this trend. This broadly concurs with studies in other select economies where these groups of variables have also been found to be significant. However, unlike Venezuela, these variables often explain a recent revival in these economies' SME share. In particular, we find evidence that the decline in Venezuelan SMEs' relative efficiency and innovation performance along with the prejudicial business environment cause this decline in SME share.     

Values that create value: socially responsible business practices in SMEs – empirical evidence from German companies

Socially responsible business and ethical behaviour of companies have been of interest to academia and practice for decades. But the focus has almost exclusively been on large corporations while small- and medium-sized enterprises (SME) have not received as much attention. Thus, this paper focuses on socially responsible business practices of SME entrepreneurs or owner–managers in Germany. Based on the assumption that decision-makers in SMEs are the central point where all business activities start, members of a German entrepreneurs association were approached in the course of a qualitative and quantitative survey. They were asked to assess in what way their social responsibility is expressed in specific management practices towards selected stakeholder groups. These practices in turn were assumed to result in perceived positive reactions of the respective stakeholders and subsequently to positively influence the firm's financial performance, i.e. cost reductions and increase in profits. In the paper, a research model is presented that elaborates the relationship between an SME executive's social responsibility and the value creation of a firm, i.e. whether (personal) values create (economic) value. It was found that socially responsible management practices towards employees, customers and to a lesser extent society have a positive impact on the firm and its performance. As such, values can create additional value.     

The Effects of Relationship Marketing on Share of Business: A Synthesis and Comparison of Models

ABSTRACT

Purpose: The article synthesizes the extensive empirical work on relationship marketing (RM) and compares the various conceptualizations to give a better understanding of the relational factors (i.e., characteristics of the business relationship) that improve a seller’s objective performance (i.e., share of business) in a business-to-business (B2B) services context. These conceptualizations, taken from the literature, link relational antecedents (i.e., communication, domain expertise, relational value, and mutual goals) to relational mediators (i.e., trust, satisfaction, commitment, relationship quality) to explore how they in turn affect a seller’s share of business.

Methodology/approach: All 4 models derived from the literature review were assessed using a dataset drawn from a survey of 948 client firm representatives of a Portuguese hotel chain in a B2B services context.

Findings: The best of the models in terms of model fit and prediction of share of business shows that only customer commitment directly drives a seller’s share of business, and simultaneous interrelated changes in customer trust and satisfaction, as well as customer perceptions of relational value, drive customer commitment, and so exert indirect effects on performance. The model that proposes that a seller’s performance is strengthened by simultaneous interrelated improvements in customer trust, satisfaction, and commitment (i.e., with these three mediators being conceptualized as a single, combined, higher-order mediator, termed relationship quality [RQ]) shows inferior fit. No combination of mediators (satisfaction, trust, or commitment) improves the seller’s objective performance over and above their individual effects (i.e., there are no synergistic effects).

Research implications: The literature review suggested four ways of modeling RM antecedents, mediators, and their effect on performance. Complex second-order constructs such as RQ lack explanatory power when predicting outcomes and mask the effects of individual relational mediators. Correct conceptualization is important, as conclusions vary drastically even with the same set of relational mediators and same dataset.

Practical implications: B2B service providers’ investments in RM will lead to improved share of business only if customer commitment is high or there is at least the potential to improve it. This requires an understanding of how valuable

the customer believes the relationship to be, and how the customer rates the relationship with the firm in terms of satisfaction and trust. A customer segmentation approach to relationship building and maintenance is advocated and detailed suggestions are put forward.

Originality/value/contribution: Apart from the work by Palmatier, the relationships between RM antecedents and mediators have not yet been examined simultaneously and findings are fragmented. The article provides a synthesis of this expansive literature. It contrasts different interplays between RM mediators, including their interrelationships as a higher-order construct, and explores possible synergy effects. Unlike previous work, this study focused on an objective measure of seller performance (i.e., share of business), whereas previous studies have tended to examine subjective measures, especially within the B2B context. Furthermore, four full models were assessed here, each of which included the antecedents to RM mediators and their links to objective performance.     

Linking family-to-business enrichment and support to entrepreneurial success: Do female and male entrepreneurs experience different outcomes?

This study used survey data from 253 entrepreneurs who founded small to medium sized enterprises (SMEs) to examine how experiences in their family domain may benefit their experiences in their business domain. Specifically, it hypothesized that affective family-to-business enrichment, instrumental family-to-business enrichment, and family-to-business support would be positively related to entrepreneurial success and that each relationship would be more positive for female entrepreneurs than male entrepreneurs. Entrepreneurial success was assessed by economic measures (business performance, growth in employment) and measures of satisfaction with the entrepreneurial experience (satisfaction with status, satisfaction with employee relationships). Results offered substantial support for the notion that female entrepreneurs benefit from the linkages of family-to-business enrichment and support to entrepreneurial success, whereas they offered no support for the notion that male entrepreneurs benefit from these linkages. Female entrepreneurs may experience such benefits because of their relative lack of access to other resources such as human, social, and financial capital and because the female gender role encourages them to pursue work–family synergies. In contrast, male entrepreneurs may fail to experience such benefits because of the relative abundance of other resources available to them and because the male gender role discourages them from pursuing work–family synergies.     

Responsibility and Informal CSR in Formal Cameroonian SMEs

In this article, we explore the implicit conceptions of business ethics and social responsibility of owners?managers of small and medium enterprises (SME) in Cameroon. While using a hermeneutical approach, our main objective is to clarify how Sub-Saharan African business people themselves understand and define corporate responsibility in their particular economic and political environment. Our aim is not to deliver an empirical study of business practices and management behavior in SMEs. We wish to discuss which responsibilities they themselves judge to be relevant and which can legitimately be attributed to them by third parties. Secondly, we relate our findings to other empirical work on SMEs, in Africa and elsewhere. It is shown that there are similarities with the way in which SMEs in Europe interpret their responsibility, but also striking differences. Further, we relate our findings to some theoretical controversies around corporate social responsibility (CSR) in SMEs, to questions about evaluation tools for CSR in the SME context, and to the role of CSR with respect to poverty alleviation in developing countries.     

Adoption and Implementation of Internal Marketing Systems by Ghanaian Small- and Medium-Sized Enterprises

This paper explores the concept of internal marketing (IM) as an internal supportive system that could provide the infrastructure for a strategic business take-off. It investigates how IM, as a concept, is understood and made practical in the context of Ghanaian small- and medium-sized enterprises (SMEs). This qualitative research method was used due to the nature of the enquiry. The government of Ghana is constantly searching for more effective ways of assisting SME performance, through various strategic growth and development schemes. Despite the fact that much has been said in the literature, the IM concept remains elusive. Most SMEs are not aware of IM and demonstrate little understanding of the concept. And SMEs have problems with the implementation of IM. The manufacturing sector demonstrates more IM orientation than does the service sector. This paper unravels sociocultural factors that frustrate the practice of IM among Ghanaian SMEs and calls for a greater awareness of the concept by stakeholders. Suggestions include more general business support for SMEs to improve performance and subsequently grow. The paper finishes by drawing attention to management implications within the practice of IM.     

The Islamic Work Ethic and the Emergence of Turkish SME Owner-Managers

The aim of this study is to explore the influence of religious beliefs on the work-related attitudes of Turkish SME (small and medium-sized enterprise) owner-managers. In this research, the emergence of pious or devout business people is considered as a phenomenon, and special attention is paid to religious transformation and secularism in Turkey. Both concepts, religion and secularism, are considered within the Turkish context. For the research, in-depth interviews were conducted with 32 Turkish business people from religious and secular backgrounds, respectively. The study investigates the so-called “Islamic work ethic” values and Islamic business principles from a critical perspective and argues that they do not seem to be as significant factors as predicted in the emergence of pious or devout business people in Turkey.     

Internationalization processes of small- and medium-sized enterprises—a matter of attitude?

Scholars suggest that when it comes to the role owner-managers of SME play in terms of their companies’ internationalization, their attitudes have a major impact. However, little is known on how exactly they lead to international entrepreneurial behavior. This paper sheds light on this relationship by making use of the Theory of Planned Behavior (TPB). Besides attitudes, other cognitive factors are examined for relevance. The study is based on empirical data which have been gathered from owner-managers from Austria, Switzerland, Liechtenstein, and Germany. The study yielded several interesting results. First, TPB clearly is applicable to investigate the cognitive antecedents of SME owner-managers’ international business activities. More specifically, the understanding of how decision-makers’ motivation to do business abroad is determined has been deepened. Second, some extensions proved to be useful in order to increase the approach’s predictive strength. From these results several conclusions can be drawn. Cognitive aspects are a promising starting point for increasing the knowledge on decision-making in the context of SME internationalization. Thus, the intersection of international entrepreneurship (IE) and entrepreneurial cognition deserves further attention. On the other hand, traits-based research seems to contribute little to a better understanding of IE. Policies supporting SME should be extended: pure resource-based approaches seem to be insufficient. Furthermore, entrepreneurship courses should reflect the relevance of attitudinal and other cognitive influences.     

Revealing travellers’ satisfaction during COVID-19 outbreak: Moderating role of service quality

User-Generated-Content (UGC) has gained increasing attention as an important indicator of business success in the tourism and hospitality sectors. Previous literature has analyzed travelers' satisfaction through quantitative approaches using questionnaire surveys. Another direction of research has explored the dimensions of satisfaction based on online customers' reviews using the machine learning approach. This study aims to present a new method that combines machine learning and survey-based approaches for customers' satisfaction analysis during the COVID-19 outbreak. In addition, we investigate the moderating role of service quality on the relationship between hotels' performance criteria and customers' satisfaction. To achieve this, the Latent Dirichlet Allocation (LDA) was used for textual data analysis, k-means was used for data segmentation, dimensionality reduction approach was used for the imputation of the missing values, and fuzzy rule-based was used for the prediction of satisfaction level. Following that, a survey-based approach was used to validate the research model by distributing the questionnaire and analyzing the collected data using the Structural Equation Modeling technique. The result of this research presents important contributions from the methodological and practical perspectives in the context of customers' satisfaction in tourism and hospitality during the COVID-19 outbreak. The outcomes of this research confirm the significant influence of the quality of services during the COVID-19 crisis on the relationship between hotel services and travellers’ satisfaction.     

Representation as a driver of internationalization: The case of a singular Russian SME

This exploratory research focuses on an unconventional practice in a Russian small- and medium-sized enterprise (SME). While studying the decision-making process of the entrepreneur and executives of this firm, we noted some differences with extant theories. This article aims to shed light on the influence of the SME entrepreneur’s representation of internationalization on his decisions in a foreign context. The results support the assumption that the representation plays a role in guiding strategic decisions and mobilizing subordinates to support the strategic orientation defined by the leader. In particular, we will see that a very favorable representation of internationalization can lead to unexpected success abroad.     

Determinants of satisfaction for entrepreneurs

This study considers the extent to which entrepreneurs are satisfied with their businesses in their third year of business ownership. Entrepreneurial satisfaction might be viewed as a basic measure of performance. It may bear upon decisions by individual entrepreneurs about whether to invest more time and money, whether to cut back, or whether to close down. It may also influence whether entrepreneurs work effectively with their customers and employees. For researchers, the investigation of why, in particular settings, some entrepreneurs may be more satisfied than others may aid in the interpretation of past research, which has used this as a performance measure.This research draws upon a theoretical framework used in investigations of employee satisfaction. Called discrepancy theory, it suggests that individual satisfaction is determined, in part, by whether there is a “gap” between actual rewards or performance and the individual's goals or expectations.In this research, it was hypothesized that entrepreneurs emphasizing primarily noneconomic goals (such as doing the work they wanted to do) would have higher satisfaction when the business was experiencing lower levels of performance. For higher levels of performance, there would be no difference. In essence, the satisfaction of those emphasizing economic goals would vary more with economic performance. A related hypothesis was that, for this sample of start-up firms (many of which would be experiencing low levels of performance), those emphasizing noneconomic goals would have higher average levels of satisfaction. This was based upon the expectation that many start-up firms would be experiencing marginal performance, so that the “gap” between goals and performance would be greater for economically oriented entrepreneurs. The research also focused upon expectations, because one aspect of discrepancy theory suggests that satisfaction decreases if there is a gap between expectations and performance. Accordingly, it was hypothesized that, controlling for performance, entrepreneurs with higher initial expectations would subsequently have lower levels of satisfaction. Previous research suggests that membership in particular demographic groups may influence expectations. This led to hypotheses that older entrepreneurs, female entrepreneurs, and minority entrepreneurs would have lower levels of initial expectations. This, in turn, may influence later satisfaction. Thus, it was hypothesized that, controlling for performance, entrepreneurs in each of these groups would have higher satisfaction because their initial expectations would be lower. The study utilized a sample of 287 entrepreneurs who were followed over a 3-year period. The data on predictors of satisfaction were gathered in year 1, when the average owner had been in business for 11 months. The satisfaction measures were gathered 2 years later. By that time there should have been some stabilization in the routines of the business, and the entrepreneur could reflect upon historic performance and experiences in judging the extent to which business ownership had been satisfying. The data were analyzed primarily using path analysis, in which it was hypothesized that certain variables would have both direct and indirect effects upon satisfaction.It was found that the satisfaction of entrepreneurs emphasizing economic goals was not more sensitive to economic performance, at least within the range of performance considered in this sample. For this group of firms, many of which appeared to be experiencing marginal performance, those emphasizing noneconomic goals did express higher levels of satisfaction. It had been expected that those with higher initial expectations would later be less satisfied because they would have a greater expectation-performance gap. However, the opposite was found; those who were more optimistic initially were more satisfied later, even when controlling for performance. Demographic influences on initial expectations were examined. Contrary to expectations, none of the demographic traits was significantly related to initial assessment of likelihood of success. Older entrepreneurs, women entrepreneurs, and minority entrepreneurs were just as optimistic as those in other groups. The relationship between membership in these demographic groups and later satisfaction was also examined. No significant relationships were found for older entrepreneurs and minority entrepreneurs. However, there was some evidence (p = .07) that women entrepreneurs were more satisfied with business ownership.Two of the most interesting findings were those related to initial expectations and to women entrepreneurs. Contrary to discrepancy theory, those who had higher initial expectations were later more satisfied, not less. This may suggest, as Staw and Ross (1985) found in a longitudinal study of employee satisfaction, that attitudes are, in part, a function of stable individual traits. Those who had a positive view of their initial prospects later viewed the experience of business ownership more favorably, regardless of subsequent performance. For women entrepreneurs, the higher levels of satisfaction may reflect a view that they have fewer attractive alternatives; it may also be that they discover greater relative satisfaction from the day-to-day aspects of business ownership.For entrepreneurs and their advisors, the findings suggest that particular goals, attitudes, and backgrounds are likely to be associated with greater satisfaction. This may influence whether entrepreneurs stay with marginal businesses. For researchers, the study provides insight into discrepancy theory by considering its application to entrepreneurs rather than the hired employees normally studied. In addition, subjective measures of performance, such as satisfaction, have often been used in previous research on entrepreneurial performance. This study casts light on why, in particular settings, some entrepreneurs may be more satisfied than others.     

Formal business networking and SME growth

This paper provides new empirical evidence on the impact of formal business networking on small and medium-sized enterprise (SME) growth. Using a large, unbalanced panel data set of Flemish SMEs over the period 1992–2008, we examine whether participation in a government-supported program aimed at providing small business managers with structured formal networking contacts is associated with SME growth. Our results suggest that formal business networking is significantly positively correlated with net asset and added value growth.     

The Advisor-SMF Client Relationship: Impact,Satisfaction and Commitment

This paper investigates the relationship between the type of business advisors used by SMEs and the level of impact and satisfaction a SME receives. The role of other influences, such as the intensity and cost of the service, and the level of commitment to an advisor by the client are also investigated. A structural equation path model is estimated from survey information for SMEs in Britain. The analysis shows that customer impact, satisfaction and re-use intentions are related to the character of the firm (particularly its size), the intensity and cost of services, but is only marginally influenced by the geographical distance between advisor and client. Affective commitment, measured by the level of the ‘trust’ of the advisor by the client, is shown not to be significant, except for public sector and business association suppliers. The importance of trust to these suppliers, despite the low satisfaction levels they achieve, is argued to be incompatible with attempts to charge fees, as has been sought for the government network of Business Link. Both business associations and public sector support bodies therefore have severe limitations in combining their broader roles with a commercially- based fee-based income strategy.