Italian Small And Medium-sized Enterprises Research Articles

Industry 4.0 technologies and the servitization strategy: a good match?

Purpose of the paper: The paper aims at investigating whether a relationship exists between the servitization strategy and the adoption of Industry 4.0 (I4.0) technologies in small and medium sized enterprises (SMEs) operating in a B2B context. Methodology: Case study method based on in-depth interviews with the entrepreneurs and managers of 7 SMEs operating in the mechanical sector in Italy Findings: The article provides some preliminary evidence on the interplay between some I4.0 technologies (Internet of Things, cloud computing, simulation, big data and analytics) and the servitization strategies of B2B SMEs, and highlights its performance implications. The authors propose three research propositions to be tested in future studies. Research limits: Although the goal of the research is exploratory, it is worth mentioning that it considers a small sample of B2B SMEs operating in the metals and machinery sector. Future studies could investigate these relationships among larger samples of cross-sectional companies. Practical implications: This work identifies a selection of technologies belonging to I4.0, that could be compatible with one another and functional to the implementation of a servitization strategy of SMEs. Originality of the paper: This work contributes to servitization literature by investigating the role of I4.0 technologies. Also, it contributes to management literature by offering initial empirical evidence of Italian manufacturing SMEs that have adopted I4.0 technologies.

Trust, Control, and Value Creation in Strategic Networks of SMEs

This paper investigates the role of trust and control in networks of small and medium-sized enterprises (SMEs), with a focus on both their direct and interaction effects on value creation. To delve into the interplay between trust and control, we unpack control mechanisms into three different forms: output, process, and social control. Our hypotheses are tested on a sample of 58 Italian SME networks based on formal agreements. Results show that the competitiveness and sustainability of inter-firm networks require trust-based relationships among entrepreneurs. Additionally, the adoption of output control mechanisms reinforces the positive link between trust and value creation, whereas a substitution effect exists between trust and process control and, with limited significance, between trust and social control.

Small and Medium-Sized Enterprises in Italy and Challenges they Face

The aim of the paper is to draw attention to the challenges faced by small and medium sized enterprises (SMEs) in contemporary economy. Analysis of secondary data from four European countries show their crucial role in economy. They are important especially in Italy where the location in industrial districts (ID) has contributed to their success for many years. Due to the diminishing role of the factors contributing to the success of Italian SMEs they face new challenges which were identified.

Future trends and Italian SMEs

The stagnation of the domestic market has brought the majority of the small and medium-sized enterprises (SME) to their knees, leading them to reinvent their way of doing business and find new strategies in order to survive and grow when the environmental conditions are deeply changing. On the one hand, new trends create a strong disruption on a structural level among the productive fabrics, but on the other hand, they represent also an opportunity, which opens new scenarios and new possibilities for the relaunch of SMEs. Among the most important challenges for Italian SMEs is internationalization, which is the possibility for enterprises to trade their goods not only on the domestic market but also on the foreign markets trying to find new opportunities to obtain some advantages. This is a very complicated process, traumatic and challenging in term of resources, but the possibility to have a genetic patrimony and a productive value, as the ones of the “Made in Italy, gives to the products of Italian enterprises a high level of competition and strong differentiation, making this process more accessible. The growth and competitiveness of enterprises, in particular SMEs, increasingly depend on the ability to apply new knowledge, working methods, and technologies as well as on the opportunity to participate in the commercialization of research developments in order to create new products, services or processes. Therefore, companies should strive to benefit from the opportunities and competitive advantages that innovation brings. SMEs play an important role in economic growth and provide most of the new jobs in Italy. Within the framework of this paper, the insight into the SMEs internationalization process is presented. The article provides an analysis of SMEs in the process of internationalization. Besides it concentrates on the new threats and opportunities represented by the new industrial revolution - Industry 4.0. Analyzing the impact of Industry 4.0 on the internationalization of Italian SMEs, the authors explain the solutions that are being used and the ones that should be taken.

Drivers, adoption, and evaluation of sustainability practices in Italian wine SMEs

AbstractBased on a survey with 64 small and medium‐sized enterprises (SMEs) in two Italian wine regions, this study aims to (a) identify key drivers and barriers of the adoption of sustainability and (b) compare the adoption and evaluation (use, financial/labor investments, and satisfaction) of sustainability practices in four management domains (marketing, chain, operational, and innovation). Results show that internal drivers were considered to be more important than external drivers. Economic sustainability‐oriented drivers scored significantly lower than drivers related to other dimensions, such as environmental sustainability and heritage. Key barriers refer to labor and investments costs, as well as concerns about greenwashing. Although there are substantial differences in adoption and evaluation of sustainability practices within and between management domains, this study confirms their widespread adoption in wineries. Among users, satisfaction levels outweigh the perceived investments. Except for innovation management practices, financial investments are considered to be lower than labor investments. Positive correlations between use‐satisfaction (within each management domain) and between investments or satisfaction levels (between management domains) further lend support for producers' adoption of multiple practices. At sustainability dimension level, heritage is negatively correlated with the evaluation indicators, indicating that it may act as a potential barrier to some sustainability practices. Segmentation analysis identified a low (30%) and high sustainability clusters (70%), which differ significantly in terms of sustainability perceptions and drivers, adoption, and evaluation of practices, as well as company characteristics. Future research needs to validate the findings on SMEs, compare our measures with more objective evaluation indicators, future adoption rates, and multidimensional sustainability practices.

Technological intensity as a moderating variable for the intellectual capital–performance relationship

AbstractThe purpose of this study is to provide empirical evidence of the moderating influence of technology intensity on the relationship between intellectual capital (IC) and corporate performance in Italian small‐ and medium‐sized enterprises (SMEs). An empirical analysis was developed for the period 2012–2016 and included 62,849 Italian SMEs. Data were collected from the AIDA database (Bureau Van Dijk—A Moody's Analytics Company), and the sample was composed of high‐tech, medium‐high‐tech, medium‐low‐tech, and low‐technology manufacturing firms, according to the “Classification of Manufacturing Industries by Technological Intensity,” as defined by the OECD. The empirical results highlight that profitability is significantly and positively affected by financial and physical capital efficiency and by human capital efficiency (HCE), but the effect of HCE is weak, and the structural capital efficiency has a negative effect on corporate performance. The time variables positively affect corporate performance, with the highest coefficient in 2016. Additionally, technology intensity reinforces the positive effect of HCE on firm performance: the higher the technological intensity, the higher the positive impact of HCE on corporate performance. The managerial implications are relevant; in fact, tangible, financial, and current assets (employed capital) represent the principal lever of performance for managers in technology sectors. The negative effect of structural capital could be caused by inefficient use of this resource, or the employed variable could not be adequate to effectively measure this IC component. It is necessary for managers to appreciate technological intensity as a contingency variable affecting the IC–performance relationship.

Circular economy in Italian SMEs: A multi-method study

Climate change, population growth, and current rate of consumption at global scale have prompted academic and business communities to challenge the current models of production towards more circular approaches. This study aims at understanding what actions small and medium-sized enterprises (SMEs) are taking to meet the challenges and opportunities of the circular economy (CE), analysing actions, barriers, enablers and the connection between CE, business strategy and performance. This research involved 254 Italian SMEs through a multi-method approach, including interviews, surveys, and focus groups. Twenty different CE practices related to waste management, packaging, supply chain and product/process design have been explored. The results show that several CE practices are simultaneously implemented by SMEs, thus supporting the notion that CE implies a systemic approach to company’s value creation. In particular, waste management was widely applied (e.g. separated waste collection was carried out by 84% of the companies surveyed), while resource saving practices were implemented by only 14% of the sample. Higher costs are the main barrier to CE for early adopters (5.13 on a 7-point Likert-type scale). However, companies implementing CE practices perceive them as a business opportunity rather than a cost, thus showing that CE may represent a source of value creation for companies, particularly SMEs. • The study involved 254 Italian SMEs through interviews, surveys, and focus groups. • Actions taken by SMEs to meet challenges and opportunities of CE are investigated. • CE Practices focused on waste management, packaging, supply chain and design. • Sustainability results an opportunity rather than a cost for CE-oriented firms. • Business opportunities emerge from the development of new value chains within CE.

The network contract in the agrifood industry: An exploratory study on collaborative drivers in central Italy

In 2008, the European Union (EU) started promoting the development of micro, small and medium sized enterprises (SMEs) in the context of Think Small First - Small Business Act (sba). As SMEs represent 99% of all European businesses, they are the backbone of Europe. This phenomenon is even more clear in the Italian agrifood industry where, in 2016, SMEs were about 1,5 million. Nevertheless, most of the Italian SMEs show unsatisfactory economic performances compared to European competitors. Indeed, the small size of firms is a challenge in terms of design and production capacity. To support inter-firms’ cooperation and to enact the principles of the sba, the Italian parliament introduced the network contract (NC) as industrial policy under Law n. 33 of 2009. The NC allows entrepreneurs to collaborate in order to improve, individually and collectively, their innovation capacity and/or their competitiveness. On one side, there is a positive economic return from cooperation. On the other hand, a deeper understanding of networks should be achieved by examining how networks operate and what is the content of the links. Indeed, one of the most challenging issue lies on the disposition of network members to be cooperative. This exploratory study aims to improve the understanding of the NC and its collaborative drivers, by analyzing whether, why and how features related to network characteristics and management perceptions affect companies’ collaboration, competitiveness and innovation capacity. To do this, we perform a multiple case study analysis by interviewing six key informants who have subscribed the NC in the agrifood industry. The study has managerial and policy implications. Findings highlight some keyelements that characterize a network approach and its related advantages, which can bring benefits to companies, while triggering competitiveness, innovation and sustainability at local level. .

Innovation capability in geographically dispersed R&D teams: The role of social capital and IT support

The internationalization of R&D activities has become crucial for small and medium-sized enterprises (SMEs) to create sources of competitive advantage. This research aims to analyze the role of social capital and information technology (IT) in enhancing knowledge sharing and innovation capabilities in the particular context of SMEs with geographically dispersed R&D teams. The study uses structural equation modeling (SEM) and fuzzy-set qualitative comparative analysis (FsQCA) to investigate data from an online survey of 265 R&D managers in Italian manufacturing SMEs with responsibility for at least one international R&D team. The results reveal the critical role of structural social capital and IT in enhancing knowledge sharing and innovation capabilities. The research contributes to existing knowledge and provides useful insights for marketers by highlighting how social capital, also in combination with IT, strengthens SMEs' competitiveness even when they operate in a mature industry.

What drives small and medium enterprises towards sustainability? Role of interactions between pressures, barriers, and benefits

AbstractThe literature on the subject of corporate social responsibility and environmental management in small‐ and medium‐sized enterprises (SMEs) has theorized about the different factors influencing the propensity of business owners/managers towards sustainability. However, the varying results and some gaps in these previous studies have highlighted the need to search for new models for the relationships among these drivers. This study theorizes and tests a model in which the decision flow of SME owners/managers is described as a multistep process in which the first push felt from internal and external pressures is mediated by two opposite forces: the positive influence exerted by the perceived benefits of sustainability and the negative influence exerted by the perceived barriers of implementing it. Data were collected from an Italian SME survey and analyzed through structural equation modelling. The results confirmed the hypotheses of a mediated path of influence, thus highlighting the different roles of factors that enable and block sustainability in SMEs, with prospective business and policy‐making implications in the light of the pursuit of the United Nation's recommended Sustainable Development Goals.

Capital structure, debt maturity, and financial crisis: empirical evidence from SMEs

Based on a unique dataset of Italian small- and medium-sized enterprises (SMEs) over the 2006–2016 period, we investigate how the recent global financial crisis impacted SMEs’ capital structure decisions and their determinants. Our results show that credit supply shocks negatively impacted Italian SMEs’ leverage. During and after the crisis, Italian SMEs significantly decreased their leverage, particularly their short-term debt exposure, relative to the pre-crisis period. As a result, the short-term debt channel is more sensitive to credit conditions than the long-term debt channel. Interestingly, we also show that trade credit does not compensate for the reduction in bank credit. Finally, our findings reveal that riskier and more profitable firms reduced their leverage more during the crisis than during the pre-crisis period. Implications for firms and policymakers are discussed.

Reporting on sustainable development: A comparison of three Italian small and medium‐sized enterprises

AbstractNowadays, we are facing a new phase of capitalism. Information that is beyond financial capital and able to provide a more comprehensive picture of the path towards sustainable development of organizations is increasingly needed. A remarkable body of evidence already exists on how large listed companies are facing this change, but very little is known about small and medium‐sized enterprises (SMEs). This work aims to analyse if and to what extent new forms of reporting such as sustainability and integrated reporting are adopted by SMEs to illustrate their journey to sustainable development. To this end, the reports of three Italian SMEs have been examined against the internationally set principles and contents of these reporting models. It emerges that, despite the shared ambition of these reports, they are different in nature and deliver a quite distinctive representation of the concerned SMEs and their ways to pursuing and communicating sustainable development at a micro level.

The advantages of formalizing networks: new evidence from Italian SMEs

Using a large sample of Italian small and medium-sized enterprises (SMEs), we investigate the effect of business cooperation realized through a “network contract” on the economic performance of network members. We find that establishing a formal business network has a positive effect on a firm’s gross margin ratio and exports, but not on profits. The advantages of this type of networking are stronger in the cases of the following: smaller firms; firms operating in traditional markets; firms operating in turbulent markets; firms located in less developed areas; and firms not part of an industrial district. The characteristics of a network (such as its size, geographical dispersion, and the sectorial diversity of its members) also have an impact on firm performance.

Corporate governance and performance of Italian gambling SMEs during recession

PurposeThis study aims to explore how the economic recession and some corporate governance (CG) provisions can affect the performance of Italian gambling small and medium-sized enterprises (SMEs) across different business segments.Design/methodology/approachThis study uses a panel sample of 2,135 observations before and during the global financial crisis. Specifically, the roles of ownership, boards of directors, chief executive officer gender and gambling business segments are investigated in the Italian gambling market.FindingsOwnership concentration has a negative relationship with the performance of foreigner- and financial-owned firms, while boards exert a positive role on performance. Interestingly, the financial crisis does not impact the performance of Italian gambling SMEs and some business segments, such as bingo, perform even better during the crisis.Research limitations/implicationsFurther investigations should analyze the role of single games on firm performance. The consumer- and firm-level examinations offer very different perspectives and scholars should be aware of this when investigating the gambling industry.Practical implicationsThis study might help both policymakers and other gambling firms, such as casinos, to better understand which appropriate CG model should be adopted and how it can positively influence performance, especially in recessionary times.Originality/valueThis study contributes to studies on hospitality and tourism by focusing on the complementary role of gambling SMEs with respect to casinos. It also increases knowledge on the role of CG in privately owned gambling firms, which thus far has been scantly investigated by scholars.

Italian firms in emerging markets: relationships and networks for internationalization in Africa

This paper concerns the process of internationalization of Italian small and medium-sized enterprises (SMEs) in Africa. The African continent is an interesting and valuable emerging target market for the international expansion of Italian companies. Using network theory on internationalization, this paper considers which actors play relevant roles in the penetration of the African market. We determine how the knowledge acquired could be used for growing within the African continent. This paper proposes findings emerging from a cross-case analysis of 18 SMEs and their internationalization strategies in Africa. The main results show that networks play a relevant role in the internationalization of Italian SMEs in Africa, but their constituent relationships are often built on contingencies rather than on deliberate strategies. Only some actors (such as business partners, NGOs, and destination-market institutions) are crucial for internationalization in Africa, while other actors, such as local and national Italian institutions, do not seem to be facilitators for this path of growth. Finally, our findings highlight how in Mediterranean Africa (and only rarely in sub-Saharan Africa), the knowledge acquired in one market is useful for growth in the closest countries to it. We conclude by proposing a taxonomy of potential networks in the African continent.

Financial distress cost of Italian small and medium enterprises

PurposeThis paper aims to propose a theoretical model designed to predict the likelihood of financial distress of an enterprise and to quantify the damages whenever the financial crisis became full-blown.Design/methodology/approachCoherently with the objectives of the paper, the analysis considers the last seven exercises (period: 1999/2006) of a sample of 25.000 small- and medium-sized enterprises (SMEs) (volume of sales: < 20 mlns; number of employees: < 250) organized in the form of Ltd. The empirical investigation has been affected through the use of BvD database: Aida and Mint Italy.FindingsThe analysis shows that the ex post costs of financial distress decrease in relation to the company’s increased ability to use intangible assets and in relation to the local roots of the banks (local banks rather than international banking groups).Research limitations/implicationsThe instruments used for this study need to be subjected to more statistical tests to establish a more robust validity and reliability. Replication of this study using larger samples and a broader geographic base (extended at European level) is suggested.Practical implicationsThe timely monitoring of investigated variables allows you to mitigate the costs of exit from the market.Originality/valueFollowing the global financial crisis, this paper sheds new light on the financial distress cost of Italian SMEs.

The value and significance of corporate community relations: an Italian SME perspective

PurposeThe purpose of this paper is to investigate the link between community of place and small- and medium-sized enterprises (SMEs) in Lombard industrial districts in Italy.Design/methodology/approachA brief literature review of international authors from the stakeholder approach and Corporate Community Relations (CCRs) field is presented. This paper refers to a survey of Lombard industrial districts conducted by ALTIS. The data were collected via a telephone survey from 834 firms.FindingsThe main finding is that managing CCRs is of major importance for company success. The results of the survey show that there are some tools and actions that Italian industrial district SMEs use to interact with their particular communities of place to develop effective and coherent relationships with their stakeholder groups. Moreover, although the survey shows that though SMEs do implement different CCR activities, they are not able to communicate these effectively through systematic communication strategies. However, the narrow sample includes only a sample of some Lombard districts. Nonetheless, the findings indicate that effective CCR seems to confer competitive advantage based on stakeholder responses and rewards sought.Research limitations/implicationsThe framework could assist in supporting CCR developments between industrial districts as various players would know how to improve CCR activities. One further suggestion is that University and Research Centers could have a role to play in creating and communicating codified knowledge concerning community relations in industrial districts, while other public players still have to develop specific tasks in improving infrastructures.Originality/valueThis study is in line with the main focus of CCR, which is in striving to meet stakeholder and societal needs. However, industrial district SMEs have to learn how to communicate their CCR activities from the examples set by large Italian companies. The paper links the notion of CCR with tools and actions to develop meaningful relationships with both community of place and interest. Moreover, considering the survey results, a new framework for local player roles is proposed.

The Standardization of Down-Streamed Small Business Social Responsibility (SBSR)

Scholars have begun to investigate the prevalence of Corporate Social Responsibility (CSR) within the context of small and medium-sized enterprises (SMEs). This paper studies the implementation of non-financial sustainability reporting tools in Italian SMEs as part of their Small Business Social Responsibility (SBSR) long supply chain compact with large multinationals. The fundamental finding of this work is that because of the down-streaming effect of CSR reporting from large companies to small ones, SMEs approach sustainability as a standard management practice. The sample is composed of 73 Italian multi-certified entities (SA8000/ISO14001/EMAS) that have published their sustainability report online between 2011 and 2013. Principal Component Analysis (PCA) was used to discover three otherwise un-observable underlying effects.

Influences of cognitive dimensions on the collaborative entry mode choice of small- and medium-sized enterprises

PurposeThe purpose of this paper is to address internationalisation of small- and medium-sized enterprises (SMEs) by specifically focussing on collaborative entry modes. Despite significant research done on market entry and internationalisation strategies of firms, the use of collaborative entry modes by SMEs during internationalisation has not received a lot of attention. The authors contribute to foreign market entry studies by analysing the influences of cognitive dimensions on collaborative entry mode choice (equity vs non-equity modes) of SMEs in their international markets.Design/methodology/approachThe authors analyse the influences of cognitive dimensions on the choice between equity-based vs non-equity-based collaborative entry modes. The empirical sample consists of internationalisation strategies of 345 Italian SMEs, where the authors used a questionnaire to collect the data. The authors use structural equation modelling to analyse influences of factors like asymmetric information, informal institutional distance, time trends of country, perception of size and resources of potential host country partners, and perception of host country partners’ power on this important market entry mode.FindingsThe results show that high informal institutional distance leads to preference of non-equity-based collaborative entry mode by Italian SMEs. The authors also find that positive time trends of the host country, positive perception of size and resource of the local partner, as well as the local partners’ power leads to preference of equity-based collaborative entry mode by Italian SMEs.Originality/valueThis study focusses on an ignored aspect of market entry strategies, i.e., equity vs non-equity collaborative entry mode choice of SMEs. The authors use insights from resource-based view and cognitive dimensions literature, to address the influences of five cognitive dimensions on the collaborative entry mode choice of SMEs during their internationalisation.

Logistics Outsourcing: Why Do Not Some Italian SMEs Adopt the Externalization?

Logistics is a one of the common function that companies usually outsourced. The decision to keep this function in-house or contract with one or many third-party logistics (3PL) companies is entirely strategic and can dramatically impact any organization's bottom line. 3PL users report an average of 44% of their total logistics expenditures are related to outsourcing. 72% of firms are increasing their use of outsourced logistics services in 2015, which is up slightly from the average reported in recent years. Most developed outsourcing logistics market belongs to the U.S. with 88%. It is followed by Asia 48%, and Europe – 46% (O’Reilly, 2010). In Italy some industries can reach the 70%, in particular food, groceries and fashion (Osservatorio Contract Logistics del Politecnico di Milano). There are many researches about logistics and large enterprises. There are less studies about Small and medium-sized enterprises (SMEs) and logistics outsourcing. SMEs play a major role in the Italian economic system. Their business activities have become an important component of the Italian economy.This paper aims to depict the adoption level of outsourcing by Italian SMEs. By direct interviews to 28 companies’ representatives we investigate which services or processes are outsourced. We investigate the reasons why companies adopt or don’t adopt the externalization. Moreover, for every company we calculate the logistics costs of simple logistics processes. In effect, we wish to compare the logistics costs communicated by the firms and the same costs calculated with ABC (Activity Based Cost) model. This research demonstrate that SMEs adopt 3PLs only for transportation. SMEs do not know all the logistics services offered by 3PLs and SMEs think the services are dedicated only to large enterprises. Finally, many companies are not able to calculate logistics costs, then they cannot compare a 3PL offer with their real costs.