A resource-based view of small export firms\u27 social capital in a Southeast Asian country

This study empirically examines the social capital that facilitates the flow of export knowledge, thereby supporting the entrepreneurial stance of small export firms. By applying the VRIO (value, rarity, inimitability and organisation of firm resources) framework to the resource-based view (RBV) of the firm, this study suggests that superior performance is a function of resources that are valuable, rare, inimitable and sufficiently organised to develop and sustain the firm\u27s competitive advantage. This study argues that small, resource-constrained export firms in a developing economy are able to adopt entrepreneurial tactics and reap positive rates of return by exploiting their relational capital to acquire export knowledge. A survey of 175 small export firms in the Philippines was conducted, and the data were analysed using structural equation modelling. The results suggest positive relationships between the firm\u27s social capital and export knowledge. Export knowledge is associated with entrepreneurial orientation, which then correlates with export performance.<br /

Managerial learning and management development in New Zealand SMEs

Objectives: Managerial capability in New Zealand SMEs has been perceived by policy makers as a factor that has constrained SME growth and development (MED, 2008). The New Zealand Centre for SME Research (NZSMERC) has undertaken a programme of research on managerial capability in New Zealand SMEs. This paper reports findings from the Centre’s 2009 annual survey of 1500 SMEs, the BusinesSMEasure. The survey builds on a previous qualitative study and is part of a programme of research which had the following objectives: (1) to understand how SME owner-managers assess their development needs and how they meet these needs; (2) to assess the extent of participation in management development; and (3) to assess the perceived impact of management development on their business. Prior Work: Previous literature and research evidence with SME owner managers suggests a low take up of formal managerial development programmes and a reliance on incidental and informal managerial learning processes (Massey et al, 2005). NZSMERC’s previous qualitative study with 25 SME owner-managers (Battisti, et al, 2009), enabled the development of a conceptual framework and typology to explain orientation to learning and management development. Further, it allowed the identification of variables that affected attitudes to managerial learning and participation in management development. The survey has enabled the testing of some of the propositions from the qualitative stage, such as the importance of sources of managerial learning and the importance of variables that influence owner manager participation in management development. Approach: The 2009 BusinesSMEasure survey involved 4,165 firms (including 694 firms who responded in the 2007 and 743 firms who responded in 2008 survey). There were 1447 usable responses after excluding 297 ineligible and unreachable firms, which gave an overall response rate of 35%, Building on the previous qualitative study and utilising the adapted theoretical framework, we have applied non-parametric analysis to examine the significance of SME profile characteristics affecting against typologies of learning and management development. Exploratory factor analysis has been undertaken on the range of variables affecting managerial learning and development to reveal clusters of variables driving managerial learning and development. Hypotheses generated by literature and theory have been tested and regression modelling completed. Results: Survey findings suggest incidental and informal managerial learning processes were predominant modes of owner-manager learning. These types of learning were associated with practice-based and proximal sources of learning, as opposed to more distal sources. Significant variables that affected the type and sources of SME managerial learning were gender, age, learning orientation and a belief of self improvement. There was a strong link between innovation and engagement in management development. Firms with at least one type of innovation activity reported to be more engaged in management development across all three types of learning i.e. incidental, informal and formal. Theoretical developments in the literature are used to provide the basis for testing hypotheses associated with learning orientation and belief in self improvement Implications: The research undertaken by the Centre was driven by a policy imperative: to investigate the causes of an underlying trend in New Zealand SMEs which suggested that there was a lack of managerial capability in SMEs and a failure of SMEs to engage with formal management development initiatives. Having revealed the drivers of managerial development and sources of learning we develop implications for supply side management development programmes and policy interventions

Institutions, Strategic Posture and Performance of Micro, Small and Medum Enterprises

The thesis of this study is that perceptions of formal and informal institutions permeating the business environment in a city in an emerging economy have significant influence on the strategic posture of micro, small and medium enterprises (MSMEs); and that strategic posture is viewed to have significant influence on the firms' overall organisational performance. The study emphasises the mediating role of strategic posture, being the conduit through which perceptions of sub-national institutions exert their influence on organisational performance. Institutional theory, which considers institutions as 'the rules of the game' that govern human interaction, serves as the study's theoretical foundation. An extensive review of the literature was undertaken in the areas of institutional theory, strategic management, organisational performance, investment or business climates, MSME/entrepreneurial development, decentralisation and local economic development at the city level. The study adopts an empirical-deductive research design through which a survey generated a total sample of 900 MSMEs located in two cities in the south-eastern region of the Philippines. Hierarchical multiple regression modelling, using ordinary least squares method with confirmatory robust technique, was applied to test the hypotheses. Results suggest that all of the five formal institutions and two of the five informal institutions had positive relationships with an entrepreneurial strategic posture, which in turn, was shown to be positively associated with higher levels of product/service, strategic and financial performance. Moreover, strategic posture was shown to partially mediate the relationships between three formal institutions and two facets of organisational performance. However, when the five formal institutions and five informal institutions were aggregated into two sets of indices, mediation analysis revealed that the index of formal institutions - product/service performance relationship was partially mediated by strategic posture. The index of formal institutions - strategic performance relationship was shown to be fully mediated by strategic posture. On the other hand, the index of informal institutions - product/service performance relationship was shown to be fully mediated by strategic posture. Overall, the empirical results offer acceptable level of support to the main thesis of the study

Sustainability from the perspective of the small firm owner-manager

[Abstract]: The role of SMEs in corporate sustainability has attracted increasing attention in recent years with much of the evidence pointing to the low number of SMEs that are taking up sustainability programmes and the difficulties to engage SMEs in the sustainable business debate (Rutherfoord et al. 2000, Revell and Rutherfoord 2003). Definitions of corporate sustainability are very broad and do not take into account specific business contexts. Some commentators claim that this plethora of definitions is of little practical relevance to organisations (Marrewijk 2003). This seems to be particularly important in the context of SME research, given the heterogeneity of this sector. However, theories and practices on corporate sustainability have been predominantly developed for and in large firms (Jenkins 2004, 2006). Although the specific characteristics of small firms are acknowledged, for example resource constraints, personalised management style, lack of formal structures and ownership structure (Storey 1994, Gibb 2000), attempts to engage small firms in sustainable practices have centred on the modification of conventional approaches to sustainability to fit the needs of small firms. Assumptions are often made that measures to engage SME firms in corporate sustainability can be scaled down versions of those developed in large firm contexts (Jenkins 2004, 2006). As a result many of the programmes that have been developed are not relevant for SMEs and therefore making it difficult for SME owner-managers to buy into it. There is a perceived need to understand sustainability from the perspective of small firm owner-managers. The focus of the present study is to understand how small business owners define sustainability in the context of their firm and explore how they put this understanding into practice. This paper reports on a qualitative study funded by Massey University Research Fund. It is based on face-to-face interviews with 50 owner-managers of firms with less than 50 employees. Results suggested four different perspectives on sustainability which were labelled as “It’s about making money”, “It’s a business opportunity”, “It’s a lifestyle” and “It’s about keeping the business running”. These four perspectives are discussed in the paper and then linked to the firms’ sustainability practices. The paper contributes to the academic discourse by identifying a range of different perspectives on sustainability within the SME context. However, results suggest that these perspectives are not mutually exclusive as we found multiple perspectives being evident in a single owner-manager’s understanding and experience of sustainability. Following-on from the results it is suggested that taking into account the owner-managers values, beliefs and most importantly their motivations of doing business might help to understand why emphasising the business case for sustainability might be contra productive within the SME sector. The reasons for being in business are far more complex than purely economic reasons (Revell and Blackburn 2007). From the analysis, recommendations are drawn that might assist policy makers and practitioners in the design of sustainability programmes for SMEs

Clarifying the link between social capital and MSME innovation performance: the role of absorptive capacity

A conceptual framework is proposed in this article showing how the social capital of a community shapes the innovation performance of micro, small and medium enterprises (MSMEs) through the exercise of absorptive capacity as the mediating phenomenon between the two. Its significance stems from the unprecedented effort of explaining how community social capital matters in the innovation performance of MSMEs, a departure from previous studies which typically examined market-related or hierarchical social capital in the form of formal networks and directly linking them to firm innovation without due regard to knowledge management within the firm as an antecedent of organizational innovation. The aim is to stimulate further thinking and empirical research on the subject of social capital of a community in an MSME and/or entrepreneurial context

Management development, innovation and performance of small exporting firms in New Zealand

The study investigates the impact of engagement in management development (MD) activities by the owner-managers of small exporting firms on firm-level innovation and the latter’s impact on the firms’ overall performance. Guided by the resource-based view of the firm, the study argues that MD can endow firms with valuable resources that fuel organisational innovation which enables firms to reap positive rates of return from their export operations. The study addresses a lacuna in the literature on the role of MD in the internationalisation of small firms. The study is a survey of 263 small exporting firms in New Zealand’s service and manufacturing industries. Logistic regression technique was used to examine the hypotheses on the MD – innovation – export performance nexus

Do institutions matter to the strategic posture and performance of SMEs? Lessons from an emerging economy

Can the institutional environment explain why some SMEs are more entrepreneurial and better performers than others? This study seeks answers to this question by developing and testing measurement and structural models of formal institutions as they relate to the strategic posture and organisational performance of small and medium enterprises (SMEs) in an emerging economy context. Guided by institutional theory, the study proposes a set of formal institutions which reflects the SMEs' institutional environment at the sub-national or city-level as opposed to the more common institutional analyses with country-wide focus. The study involves a survey of 955 owners and/or managers of SMEs in two cities in the Philippines. The study attempts to determine the owners'/managers' perceptions on how the formal institutional environment impacts their firms' overall entrepreneurial strategic posture, and consequently, the firms' overall organisational performance. The empirical analysis makes use of structural equation modelling (SEM) to examine the measurement and structural models to test the hypothesised relationships in the institutions-strategic posture-organisational performance nexus. The study’s results show that four types of formal institutions are significantly associated with an entrepreneurial strategic posture and that the latter is positively associated with higher levels of organisational performance. Our analysis also demonstrates the partial mediating role of strategic posture in the majority of the formal institutions - organisational performance relationships. Implications of the results and future research directions are discussed with strong emphasis on the lessons that may be applicable to small firms or SMEs in developed economies like Australia and New Zealand

Institutions, Strategic Posture and Performance of Micro, Small and Medum Enterprises

The thesis of this study is that perceptions of formal and informal institutions permeating the business environment in a city in an emerging economy have significant influence on the strategic posture of micro, small and medium enterprises (MSMEs); and that strategic posture is viewed to have significant influence on the firms' overall organisational performance. The study emphasises the mediating role of strategic posture, being the conduit through which perceptions of sub-national institutions exert their influence on organisational performance. Institutional theory, which considers institutions as 'the rules of the game' that govern human interaction, serves as the study's theoretical foundation. An extensive review of the literature was undertaken in the areas of institutional theory, strategic management, organisational performance, investment or business climates, MSME/entrepreneurial development, decentralisation and local economic development at the city level. The study adopts an empirical-deductive research design through which a survey generated a total sample of 900 MSMEs located in two cities in the south-eastern region of the Philippines. Hierarchical multiple regression modelling, using ordinary least squares method with confirmatory robust technique, was applied to test the hypotheses. Results suggest that all of the five formal institutions and two of the five informal institutions had positive relationships with an entrepreneurial strategic posture, which in turn, was shown to be positively associated with higher levels of product/service, strategic and financial performance. Moreover, strategic posture was shown to partially mediate the relationships between three formal institutions and two facets of organisational performance. However, when the five formal institutions and five informal institutions were aggregated into two sets of indices, mediation analysis revealed that the index of formal institutions - product/service performance relationship was partially mediated by strategic posture. The index of formal institutions - strategic performance relationship was shown to be fully mediated by strategic posture. On the other hand, the index of informal institutions - product/service performance relationship was shown to be fully mediated by strategic posture. Overall, the empirical results offer acceptable level of support to the main thesis of the study

Institutions, Strategic Posture and Performance of Micro, Small and Medum Enterprises

The thesis of this study is that perceptions of formal and informal institutions permeating the business environment in a city in an emerging economy have significant influence on the strategic posture of micro, small and medium enterprises (MSMEs); and that strategic posture is viewed to have significant influence on the firms' overall organisational performance. The study emphasises the mediating role of strategic posture, being the conduit through which perceptions of sub-national institutions exert their influence on organisational performance. Institutional theory, which considers institutions as 'the rules of the game' that govern human interaction, serves as the study's theoretical foundation. An extensive review of the literature was undertaken in the areas of institutional theory, strategic management, organisational performance, investment or business climates, MSME/entrepreneurial development, decentralisation and local economic development at the city level. The study adopts an empirical-deductive research design through which a survey generated a total sample of 900 MSMEs located in two cities in the south-eastern region of the Philippines. Hierarchical multiple regression modelling, using ordinary least squares method with confirmatory robust technique, was applied to test the hypotheses. Results suggest that all of the five formal institutions and two of the five informal institutions had positive relationships with an entrepreneurial strategic posture, which in turn, was shown to be positively associated with higher levels of product/service, strategic and financial performance. Moreover, strategic posture was shown to partially mediate the relationships between three formal institutions and two facets of organisational performance. However, when the five formal institutions and five informal institutions were aggregated into two sets of indices, mediation analysis revealed that the index of formal institutions - product/service performance relationship was partially mediated by strategic posture. The index of formal institutions - strategic performance relationship was shown to be fully mediated by strategic posture. On the other hand, the index of informal institutions - product/service performance relationship was shown to be fully mediated by strategic posture. Overall, the empirical results offer acceptable level of support to the main thesis of the study.</p

Management development from the perspective of small firm owner-managers

The literature suggests that improving the management knowledge and skills of owner-managers of small and medium enterprises (SMEs) contributes to their survival and growth (Fuller-Love 2006; Thomson et al 2001). New Zealand commentators contend that there is considerable scope for further improvement in management knowledge and skills, especially in the SME sector (Jayne 2007; Massey, Gawith, Perry, Ruth & Wilson 2005). The debates about the need for management development programmes for SMEs and the effectiveness of such programmes have a long tradition in policy and research. Much of the existing research on management development in small firm focuses on the effectiveness of government-supported training programmes and the barriers to engagement in management training faced by SME owner-managers (Fuller-Love 2006; Thomson et al 2001). There is substantial empirical evidence that suggests the current provision of management training does not meet the needs of SMEs (Kitching & Blackburn 2002; Matlay 2000; Marlow 1998). However, so far few changes have been seen on the supply side, with policy makers continuing to be concerned with the low take-up rate of management training by SMEs. We argue that there is a need to shift the focus to the demand side i.e. SMEs and to examine how owner-managers perceive and meet their management development needs (Clarke, Thorpe, Anderson & Gold 2006; Thomson et al 2001). Against this background this paper reports on a study of 1400 (data collection currently underway) SMEs in New Zealand. The specific research objectives are to: (1) to understand how SME owner/managers assess their developmental needs and how they meet these needs and (2) to assess the perceived impact of management development on the business. Based on the findings we draw conclusions related to SME support and policy programmes