Canadian Small- And Medium-sized Enterprises Research Articles

Breaking Boundaries: A Study on the Innovative Network Strategies of Canadian SMEs Expanding into Unfamiliar Markets

Small and medium-sized enterprises (SMEs) rely on network ties to facilitate overseas expansion. However, the expansion may be hindered when geographical and institutional distance is great, and boundaries of network connections are reached since the information from those networks may be distorted and lack objectivity. Nevertheless, Canadian SMEs with native-born owners have succeeded in expanding into geographically and institutionally distant markets despite possessing no pre-existing ties. Drawing on insights from institution- and network-based views, we investigate this understudied issue through a generic inductive interview of six Canadian SMEs that have either expanded into or plan expansion into the United Arab Emirates in which they had no pre-existing ties. Results reveal that all firms understood that institutional differences affect the business environment. They embarked on a distinct networking approach, focusing on broadening their existing network in the early stage and making full use of outsourcing networking activities. The research helps pave the way for further clarity and understanding of the dynamic nature of international entrepreneurship when relating to distant yet commercially attractive markets.

Home Peers, Business Owners’ Gender, and the Export Intensity of SMEs

Small and medium-sized enterprises (SMEs) can improve their export performance by co-locating with export firms from the same industry and country. However, the export implications are yet to be addressed systematically. This study investigates when and how women-owned SMEs convert their geographic proximity to home peers through social proximity and cognitive proximity into high export intensity. We develop a nuanced knowledge spillover perspective incorporating gender mechanisms to clarify the relationship between home peers and SMEs’ export intensity at the regional and national levels. To test our hypotheses, we designed quantitative research using a survey database from Statistics Canada, Survey on Financing and Growth of Small and Medium Enterprises (SFGSME), with a sample of 9,977 Canadian SMEs. Our study shows that, among other things, home peers’ positive impact on SMEs’ export intensity is more significant when their owners are exposed to a larger number of relatively close same-gender home peers (i.e., same-gender regional home peers). Moreover, we show that such positive home-peer effects on SMEs’ export intensity are even stronger for women business owners than men business owners. We clarify our contributions by discussing the theoretical and practical implications of our findings. By demonstrating the significance of same-gender regional home peers for women owners, we contribute to the knowledge spillover perspective on exporting, emerging research streams on home peers, and women entrepreneurship research in the international entrepreneurship field. Our findings also suggest that women entrepreneurs can particularly benefit from government-funded export promotion programs when the programs are appropriately designed and promoted to women entrepreneurs.

Direct or Indirect Exporting? The Joint Influence of Gender and Immigration Background on Export Strategies of Canadian SMEs

Given the challenges women-owned small and medium-sized enterprises (SMEs) face in global markets, we investigate the effects of gender and immigrant background on their direct versus indirect export strategies. Drawing on insights from social capital theory, our analysis consists of a sample of 109 Canadian SMEs. We found that although women-majority-owned SMEs are less likely to export directly compared to their men-majority-owned counterparts, women owners with an immigrant background have the potential to overcome network-related barriers, thus weakening the negative effect of gender on direct exporting. These results point to the significance of having access to international networks and the necessity to leverage this linkage to support the direct exporting approach for women-majority-owned SMEs. Our research guides SME owners and managers with global aspirations. We suggest policymakers develop initiatives to encourage women owners to identify, build, and cultivate international business relationships and improve the design and implementation of policies targeted at immigrant export businesses.

Beyond Technological Capabilities: The Mediating Effects of Analytics Culture and Absorptive Capacity on Big Data Analytics Value Creation in Small- and Medium-Sized Enterprises

Research on the ability of small- and medium-sized enterprises (SMEs) to harness value from their big data analytics (BDA) investment is a major challenge facing executives but research on this issue involving SMEs is scant. Drawing on the BDA capabilities literature, this article tests the mediating roles of two factors—analytics culture and BDA-specific absorptive capacity—on the ability of SMEs to generate strategic business value from their BDA investments. This article is based on a sample of 447 Canadian SMEs using structural equation modeling with partial least squares. The results confirm that both analytics culture and BDA-specific absorptive capacity amplify the impact of technological and human capabilities on strategic business value. The findings contribute theoretically and empirically to the emerging BDA literature on SMEs. The findings can help executives develop BDA strategies to harness their investments.

An exploratory investigation of performance criteria in managing and controlling new product development projects: Canadian SMEs' perspectives

PurposeThis paper aims to understand and document evaluation criteria used in the new product development (NPD) process of small- and medium-sized enterprises (SMEs) to support the management and control of their NPD projects.Design/methodology/approachThis study combines exploratory and explanatory methodology (case studies) involving five Canadian small and medium enterprises (SMEs) that are successful in NPD. The authors conducted semi-structured interviews with nine selected managers and project managers to explore the process and evaluation criteria used to manage and control NPD projects.FindingsThe results highlight that cost, time and quality are key evaluation criteria used by SMEs to make decisions relative to the NPD project's success. Profitability, return on investment, expected sales and customer satisfaction are additional criteria used to evaluate NPD project's success. It has been also found that the SMEs did not consider sustainability issues in the criteria used as their focus are on the needs of stakeholders, mainly customers.Research limitations/implicationsLimitations: The evaluation criteria are extracted from a limited number of SMEs that have successfully carried out NPD projects and may therefore be influenced by some contextual factors. The results cannot be generalized to all SMEs or to all projects, as their characteristics may differ. Implications: This study offers a novel outlook on NPD process in SMEs, by documenting criteria related to constraints in project management. The integration of theory of constraints contributes to increasing theoretical knowledge about the management and control of NPD projects in SMEs. It provides insight into how project managers (and other decision makers) can increase the chances of project success by managing project constraints and criteria.Practical implicationsThe evaluation criteria identified in this study can therefore be of use to SMEs managers and project leaders seeking to improve the management and control of their NPD projects. These criteria can help them better manage their limited resources and skills and allocate them to the most promising projects. They can also help them conduct their NPD process more efficiently to achieve the intended objectives, including the desired project profitability targets.Originality/valueThis paper offers new insight and practical implications about evaluation criteria within the stages and activities of the NPD process that needed to be considered by SMEs' managers involved in NPD projects.

Privacy enhancing technology adoption and its impact on SMEs’ performance

As society places greater emphasis on information privacy and data protection, organizations are increasingly adopting Privacy Enhancing Technologies (PETs) to safeguard the personal information of their stakeholders. This trend is fueled by growing consumer awareness and the introduction of government regulations aimed at protecting personal data. By implementing PETs, organizations can ensure compliance with privacy regulations and establish trust with their customers. This study aims to deepen the understanding of the determinants of Privacy Enhancing Technology (PET) adoption in small and medium-sized enterprises (SMEs) and its impact on their performance. It focuses on the technology-organization-environment (TOE) model, managerial readiness, firm size, industry sector, and intent to adopt PETs as potential drivers of PET adoption. By using a large-scale survey of 202 Canadian SMEs, the study evaluates the mediating role of intent in the relationship between the TOE model, managerial readiness, and market performance. The results of this study contribute to the growing body of research on PET adoption in SMEs and provide insights for organizations and managers to effectively adopt PETs. The results of this study indicate that technological, environmental, organizational, and managerial readiness have a positive effect on the intention to adopt PETs. Additionally, the intention to adopt PETs was found to have a positive relationship with firm performance. The findings also reveal that the intention to adopt PETs fully mediates the relationship between the four dimensions of readiness and firm performance. These findings highlight the important role that readiness and intention play in the adoption of PETs and its impact on firm performance. This study also found that firm size moderates the relationship between technological and organizational readiness with intention to adopt PETs, as well as the relationship between environmental and managerial readiness with intention to adopt PETs. The study identified the top five factors affecting PET adoption as cybersecurity awareness, perceived cost of adoption, ease of use, perceived benefits, and IT infrastructure. The findings suggest that technological readiness is the most influential of the four dimensions, followed by organizational, environmental, and managerial factors. This study presents crucial considerations for SMEs to evaluate when deciding on the use of PET technologies, as it pertains to practitioners.

Differences between women- and men-owned export businesses: are women-owned export businesses more financially successful when they adopt an intensive export strategy?

Women-owned businesses are still underrepresented in terms of export activity. This study compares the financial returns that small- and medium-sized enterprises (SMEs) generate with women- versus men-owned export businesses. We examine competing hypotheses about how gender moderates the relationship between export intensity and SMEs' financial performance based on differing perspectives of women entrepreneurs. Based on these theoretical elaborations, we analyzed the export activity and profitability of 7,761 Canadian SMEs with women versus men owners. We found that women-owned export businesses achieve superior financial performance when they adopt an intensive export strategy. We discuss the implications of this finding for international entrepreneurship theory, practice and policy.

Human resource professionals’ human and social capital in SMEs: small firm, big impact

HR professionals have been widely ignored in the Human Resource (HR) management literature pertaining to small and medium-sized enterprises (SME). Given that entrepreneurs may be reluctant to hire HR professionals, it is important to investigate the value that HR people may bring to an SME. Addressing this literature gap, our research draws on resource orchestration theory (ROT) to link the interaction between HR professionals’ human and social capital to firm performance via the use of high-performance work practices (HPWPs). Further, this relationship depends on the SME’s size: in small firms, the link is strengthened because HR professionals’ human and social capital is more likely to create a competitive advantage in a context of resource poverty. We test the research model among a sample of 174 Canadian SMEs with fewer than 250 employees. Our results show that HR professionals’ human and social capital is more closely related to firm performance through the adoption of HPWPs in small SMEs than in large ones. Overall, our study highlights the value that HR professionals bring to small SMEs and advocates for a greater presence of HR professionals in SMEs.

Are SMEs with immigrant owners exceptional exporters?

Immigrant owners possess valuable human and social capital from which small and medium-sized enterprises (SMEs) might derive advantages when internationalizing. According to this resource-based perspective, such advantages might be manifested in immigrant-owned SMEs' enhanced ability to identify, evaluate, develop and exploit opportunities in international markets. However, a cognitive perspective offers an opposing view: insofar as immigrant owners are more prone to overconfidence than their non-immigrant counterparts when making internationalization decisions, immigrant-owned SMEs might reap less financial rewards from potentially high-risk international markets. We pit the two perspectives against each other theoretically and empirically by evaluating a) the relationship between business owners' immigrant background and SMEs' export intensity, and b) the extent to which such background moderates the relationship between SMEs' export intensity and (risk-adjusted) financial performance. Based on a representative sample of 9977 Canadian SMEs, we find that the presence of immigrant owners positively impacts export intensity, but negatively moderates the relationship between export intensity and financial performance. We interpret this evidence, combined with supplementary analyses, as support for a cognitive theory of international entrepreneurship in general, and particularly in relation to the role and consequences of entrepreneurs' immigrant background.

External Financing, Export Intensity and Inter‐Organizational Collaborations: Evidence from Canadian SMEs

Drawing on institutional theory, resource‐based perspective and internationalization theory, we propose that the domestic collaborations of small and medium‐sized enterprises (SMEs) have a direct positive effect on their export intensity, as well as an indirect effect through enhancing these firms' access to external financing. We test our hypotheses on a sample of 151 Canadian manufacturing SMEs and find partial support for the indirect relationship. Overall, our results suggest that domestic collaborations positively affect SMEs' access to equity financing but not to bank financing. While both equity and bank financing are found to enhance these firms' export intensity, bank financing seems to have a greater impact. The implications of these results are discussed.

Internationalization of immigrant-owned SMEs: The role of language

Immigrant entrepreneurs have become increasingly important to economic development, and there is substantial debate regarding their enhanced potential to expand their activities across national borders. However, research regarding how immigrant-owned small- and medium-sized enterprises (SMEs) engage in internationalization and how entrepreneurs’ native languages might influence such processes remains in its infancy. Drawing on a sample of 3077 Canadian SMEs, we evaluated the impact of immigrant ownership and the moderating role of native language on companies’ decisions to export to global markets and to the English-speaking regional market. Immigrant ownership generally fostered a global orientation, particularly for French and Allophone owners.

Small and medium-sized enterprises, intellectual property, and public policy

The objective of this paper is to study the use of intellectual property (IP) rights by small and medium-sized enterprises (SMEs). The paper draws on different surveys and studies in selected countries, with an emphasis on Canadian SMEs, to compare the use and exploitation of IP by company size. The paper finds that despite the potential benefits of acquiring formal IP rights for SMEs, they use IP rights to a lesser degree than large companies due to several factors, mainly the low rate of innovation compared to large companies and the cost and complexity of the IP system. The paper also presents a framework to analyze whether there is a role for government to play in this area, and how the government could address this under-utilization of IP rights by SMEs.

Internationalization capabilities of SMEs: A comparative study of the manufacturing and industrial service sectors

Nowadays, the global economy requires developed countries to undergo industrial restructuring. In this context, industrial small- and medium-sized enterprises (SMEs) need to collaborate with the service sector to enhance their competitiveness and strategic capabilities. Indeed, industrial service SMEs have been the object of particular attention from governments since these enterprises have become a key element for manufacturing and innovation networks in developed countries. However, these firms, as well as the manufacturing SMEs they serve, now face the challenge to internationalize. This paper addresses the of the strategic capabilities required by SMEs in general, and manufacturing and industrial service SMEs in particular, to internationalize, as well as the effect of these capabilities on their export performance. These strategic capabilities are presented in a research model, which relates human resources (HR), product development capabilities and market development capabilities to export performance. In testing this model with a sample of 347 Canadian and French SMEs, similarities and differences between the two types of SMEs are highlighted.

ERP implementation at SMEs: analysis of five Canadian cases

PurposeThe purpose of this paper is to explore the critical success factors (CSFs) of enterprise resource planning (ERP) system implementation in small and medium‐sized enterprises (SMEs).Design/methodology/approachFive case studies of Canadian SMEs were conducted. They included interviewing individuals from five roles at each organization and gathering project documents. Following an evaluation of each project's success (within‐case analysis), cross‐case analysis was conducted to elicit influential and distinctive factors.FindingsFactors were identified that appeared to explain variation between successful and unsuccessful implementations at SMEs, besides factors that appeared to be innovative or counter‐intuitive in light of the established literature.Research limitations/implicationsThe study reinforces the need for more research that is focused on SMEs. All cases were of Canadian SMEs with either a manufacturing or distribution focus, potentially limiting the generalizability of findings to other industries or countries.Practical implicationsBy identifying relevant CSFs for SMEs, managers can better prioritize implementation efforts and resources to maximize success of ERP implementations.Originality/valueThe paper appears to be one of the first studies to focus on the CSFs of ERP implementation at SMEs.

Applying asset‐based community development as a strategy for CSR: a Canadian perspective on a win–win for stakeholders and SMEs

In the December 2006 edition of Harvard Business Review, Michael Porter and Mark Kramer argue that by approaching corporate social responsibility (CSR) based on corporate priorities, strengths and abilities, firms can develop socially and fiscally responsible solutions to current CSR issues, which will provide operational and competitive advantages. We agree that an effective approach to CSR includes a mapping of strategy, risk and opportunity. However, we also caution that the identification of these to the exclusion of societal input may not be to the corporation's advantage. Instead, an investment in both strategic analysis and social capital can pay off from a social and an organizational standpoint. Compared with their larger counterparts, small‐ and medium‐sized enterprises (SMEs) frequently have stronger relationships with their internal and external stakeholders that foster the development of social capital. As such, we believe that the sector offers a unique opportunity to identify additional models and frameworks in order to approach a strategic CSR model as espoused by Porter and Kramer. This paper explores a case study of one Canadian SME that uses a community development framework called Asset Based Community Development (ABCD) for its CSR programming. Because ABCD relies heavily on the development and maintenance of social capital and can be utilized to attain set objectives, we propose that it provides a supplementary framework through which the arguments of Porter and Kramer can be expanded. In applying the ABCD framework for CSR, we can begin to establish a programme that supports strategy, integrates employees and stakeholders towards a common vision, and creates unique and sustainable alternatives towards the resolution of social and corporate goals.

An investigation into the use of collaborative ventures in the internationalization of high performing Canadian SMEs

This paper provides data involving the internationalization strategies of high performing Canadian small and medium-sized enterprises (SMEs) with a focus on issues associated with the management of collaborative ventures. Interviews with managers of award winning businesses suggest that a number of factors can be associated with the management of collaborative ventures in overseas markets. While common characteristics were identified and a model was proposed from the data, the findings nevertheless suggest that the effective performance of collaborative ventures is contingent on the circumstances facing particular management teams, highlighting the complexity of managerial decision making. The study uncovered behaviour contributing to collaborative ventures’ success, that is both planned and unplanned. More specifically, vision and entrepreneurial managerial style should be considered as variables contributing to the performance of collaborative ventures. The findings suggest that the performance measures of such ventures should not only include both process and outcome measures tailored to partners’ objectives but also include each company’s commitment in the venture.

A model of e-commerce use by internationalizing SMEs

Abstract Globalization and e-commerce pose new challenges and provide new competitive opportunities, especially for small- and medium-sized enterprises (SMEs) seeking to broaden their involvement into new international markets. Yet, SMEs are only beginning to embrace these new opportunities. The authors derive a model describing the use of e-commerce by internationalizing SMEs, developed by integrating findings from case studies of 12 Canadian SMEs exporting to Japan with a broad range of management theories. The cases represent two very different sectors: hospitality/tourism and high tech. The research first describes how the firms use e-commerce internationally, by examining resource commitment, web function and cultural adaptation. It then explains why the firms use e-commerce, by relating two types of environmental variables — market changes and industry norms — and three firm factors — technical capability, cultural capability and firm size — to the firms' adoption of e-commerce. Implications for SME managers are discussed and nine propositions are put forth to guide and focus future research.