Knowledge Management in the SME and its Relationship to Strategy, Family Orientation and Organization Learning

In this study, we examine the prevalence of different KM practices and the organizational determinants of KM among SMEs by conducting a quantitative study of empirical data from nearly 500 Dutch SMEs. Our empirical results show that knowledge is managed in a people-based approach in SMEs. SMEs are most likely to acquire knowledge by staying in touch with professionals and experts outside the company and they incline to share knowledge and experience by talking to each other. Furthermore, KM is dependent on other organizational resources and processes. Organizational learning and competitive strategy with a formality approach are the positive determinants of KM while family orientation is a negative determinant of it. One of the challenges in the current study was to clearly distinguish, on an empirical basis, the previously defined concepts of knowledge management practices and organizational learning. Although in theory, they are distinct, the results of this study lead us to conclude that they may overlap in practice. In the conclusion, we recommend a learning-oriented knowledge management model for SMEs which combines aspects of the two literatures

Knowledge Management as a Strategic Tool to Foster Innovativeness of SMEs

This study examines the relationship between knowledge management (KM) (in terms of external acquisition and internal sharing) and innovation behavior. The concept of absorptive capacity and assumptions from the dynamic capabilities view underlie the proposed framework and hypotheses. The framework is empirically tested using a random sample of 649 Dutch small to medium sized enterprises (SMEs). Our empricial results indicate that external acquisition practices play a key role in fostering SMEs’ innovativeness while internal sharing practices do not appear to have a significant influence. External acquisition activity enhances a firm’s awareness of available knowledge opportunities. Firms which actively acquire external knowledge (regardless of the type of knowledge) may build a greater competitive dynamic capability to sense and seize business opportunities which in turn may lead to new or improved products or processes. We suggest that owners/entrepreneurs of SMEs and their firms will benefit in the long term if they strategically manage knowledge, especially using external acquisition practices

Postmaterialism Influencing Total Entrepreneurial Activity across Nations

The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play. The objective of this paper is to explore how postmaterialism may explain these differences. A distinction is made between nascent entrepreneurship, new business formation and a combination of the two, referred to as total entrepreneurial activity, as defined within the Global Entrepreneurship Monitor (GEM). The model is also tested for the rate of established businesses. The measure for postmaterialism is based upon Inglehart’s four-item postmaterialism index. A set of economic, demographic and social factors is included to investigate the independent role postmaterialism plays in predicting entrepreneurial activity levels. In particular, per capita income is used to control for economic effects. Education rates at both secondary and tertiary levels are used as demographic variables. Finally, life satisfaction is included to control for social effects. Data from 27 countries (GEM, World Values Survey and other sources) are used to test the hypotheses. Findings confirm the significance of postmaterialism in predicting total entrepreneurial activity and more particularly, new business formation rates

Organization Context and Human Resource Management in the Small Firm

This paper examines the relationship between organization contextual variables and human resource management (HRM) practices in small firms. The proposed model is based on an integration of theoretical perspectives, including the resource-based approach, institutional theory, transaction cost economics (TCE), and concepts from strategic management. The model is explored empirically, with qualitative and quantitative analyses of data collected from a sample of sixteen small Dutch firms. Specific contextual variables examined include company size, the presence of a collective labor agreement, having a large firm associate, either as supplier, purchasing group or franchiser, and the company's strategic orientation toward growth (growth strategy). An important finding is the significance of having a large firm associate. Companies with a large firm associate are more likely to report having employer-based training programs. As predicted, company size is associated with more formal HRM practices, including greater regularity of performance appraisal and greater likelihood of employer-based training. A weak relationship is found between a more growth-oriented strategy and greater formality of these two HRM practices. Predictions based on collective labor agreements are not supported. The paper concludes that the findings warrant further research on the relationship between organization contextual variables and the formalization of HRM practices, although a clearer definition of the latter variable is needed in future research

Post-Materialism as a Cultural Factor Influencing Entrepreneurial Activity across Nations

The study of the determinants of entrepreneurship at the country level has been dominated by economic influences. The relative stability of differences in levels of entrepreneurship across coun-tries suggests that other forces such as certain institutional and/or cultural factors are at play. The objective of this paper is to explore how post-materialism explains differences in entrepreneurial activity across countries. Entrepreneurial activity is defined as the percent of a country?s popula-tion that is self-employed, using a broad definition that also includes CEOs of both unincorporated and legally incorporated establishments. The measure for post-materialism is based upon Ingle-hart?s four-item post-materialism index. Because of the known interactions between economic and cultural factors found in previous research, a set of economic and cultural factors is included to provide a clearer picture of the independent role post-materialism plays in prediction of self-employment levels. In particular, education, life satisfaction, church attendance and political (left or right) extremism are used as control variables in our analyses using data of 14 OECD countries over in recent period. Findings confirm the significance of post-materialism in predicting self-employment even when controlling for economic and cultural factors. However, strong covariation between post-materialism and other cultural factors makes it difficult to clearly discriminate be-tween the effects

Business accomplishments, gender and entrepreneurial self-image

Drawing on Bem’s psychological theory of self-perception, this paper presents and tests a model that examines the impact of business accomplishments and gender on entrepreneurial self-image and explores the definition of entrepreneurship according to Vesper’s Entrepreneurial Typology. Regression techniques are used to identify those business accomplishments that university alumni associate with self-perceptions of entrepreneurship. Experience as a small business person (founding, running, and/or owning a small business) most clearly predicts entrepreneurial self-image. Results also support predictions of both direct and indirect effects of gender as well as direct effects of education and business degree. Results of a separate expert panel study are used to rank business accomplishments according to degree of entrepreneurship. Results of both studies reveal stark contrasts in the implied definition of entrepreneurship between entrepreneurship experts (academic and practitioner alike) and the general business community (as represented by the alumni). This raises questions about the meaning of the term “entrepreneurship”, what the word “entrepreneur”, in particular, conveys to the general public, and the implications for practice and future research

Entrepreneurial Activity, Self-Perception and Gender

Drawing on Bem's psychological theory of self-perception, this paper presents and tests a model that examines the impact of gender and entrepreneurial activity on entrepreneurial self-perception. Based on a sample of alumni of a large Midwestern U.S. university, regression techniques are used to identify those activities associated with self-perceptions of entrepreneurship, as well as direct and indirect effects of gender. Results support the model of both direct and indirect effects of gender. The paper provides insights into gender issues in entrepreneurship as well as the definition of entrepreneurship in general

Entrepreneurship and its Conditions: a Macro Perspective

The rate of entrepreneurship, a multidimensional concept including both the percentage of existing business owners in the labor force as well as the start-up rate of new enterprises, varies substantially across countries and over periods of time. Data for several modern Western nations including the United States, the United Kingdom and the Netherlands suggest a U-shaped recovery in rate of entrepreneurship (as measured by business ownership) toward the end of the 20th century. However, the timing, pattern and extent of this recovery vary substantially across nations. The reasons for this large variation in rate of entrepreneurship across time and by country are by no means straightforward. This paper provides a framework explaining the causes of the variation in rate of entrepreneurship across countries. The last part of the paper illustrates the framework with two historical case studies: the Dutch Golden Age of the 17th century and Britain’s First Industrial Revolution (1760-1830). The approach taken is eclectic, integrating various research streams in the social sciences. Policy implications are also proposed

Entrepreneurship and economic performance: a macro perspective

The present paper provides a theoretical framework of the relationship between rate of entrepreneurship and n ational economic performance. The first part deals with some aspects of the recent economics literature on the relation between entrepreneurship and small business, on the one hand, and economic growth, on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in the Netherlands. In the second part a framework is presented linking entrepreneurship and growth at different levels of aggregation. The last part of the paper illustrates the framework with some historical case studies. The present paper supplements Wennekers, Uhlaner and Thurik (2002) which is concerned with the causes of the rate of entrepreneurship

Professional HRM practices in family owned-managed enterprises

Human resource management (HRM) has been defined as the “process of attracting, developing and maintaining a talented and energetic workforce to support organizational mission, objectives, and strategies” (Schermerhorn, 2001, p. 2400). Audretsch and Thurik (2000, 2001) argue that effective HRM practices are becoming increasingly important in the modern “knowledge-based” economy, as companies face the double challenge of the need for more highly trained employees coupled with the shortage of qualified labour. These challenges, coupled with the third trend toward smaller firms in general, reinforce the need for effective HRM practices in the small firm (Audretsch and Thurik, 2000, 2001). Empirical research confirms that in general, smaller firms make less use of professional HRM practices than larger firms (Barron et al., 1987; Hornsby and Kuratko, 1990). For example, smaller firms make less use of formalized recruitment practices (Aldrich and Langton, 1997), provide less training to their employees (Koch and McGrath, 1996; Westhead and Storey, 1997, 1999) and are less likely to use formalized performance appraisals (Jackson et al., 1989). In spite of the size effect, a growing base of research evidence suggests that far from being homogeneous, small firms nevertheless vary widely in the professional HRM practices in use (De Kok and Uhlaner, 2001). For example, Deshpande and Golhar (1994) find HRM practices within many small manufacturing firms to be as sophisticated as those in larger companies. Similarly, Hornsby and Kuratko (1990) find that while firms of all sizes use primarily informal recruitment and selection techniques (mainly employee referrals and the interview), even among small firms, HRM practices are often more sophisticated than they had expected. Using a small set of cases, Hill and Stewart (1999) also demonstrate variation in level of sophistication of HRM practices among smaller organizations