Small Business Context Research Articles

Firm Performance and the Impact of Entrepreneurial Education and Entrepreneurial Competencies

Small and medium-sized enterprises (SMEs) are considered to be the world’s largest. They play a vital role as they create jobs and improve the living conditions of their local communities as they contribute to the country’s GDP growth. Due to their contributions to the nation’s economy, they have been given much attention in entrepreneurship. This paper aims to study the impact of entrepreneurial education and entrepreneurial competencies on small and medium enterprises’ performance. Entrepreneurship is a vital component of any successful business strategy. It can be used to overcome the uncertainties of today’s business environment. The roles of these two independent factors in the business environment are also more relevant to small businesses. The goal of this paper is to develop a framework that explores the performance of firms from the perspective of their entrepreneurial education and entrepreneurial competencies. The proposed framework aims to provide a comprehensive view of the factors that influence the performance of businesses. It shows that entrepreneurial education is the antecedent of competencies that can affect firm performance, where entrepreneurial competencies is treated as a mediating variable. In addition, this study explores the role of entrepreneurial education and entrepreneurial competencies in developing financial and non-financial business performance. The framework is based on the resource-based view, a constantly applied approach to the small business context to utilize strengths and weaknesses to achieve sustainable competitive advantage. The paper provides valuable insights into the entrepreneurial factors that businesses can consider when enhancing their performance. It also helps entrepreneurs in developing their entrepreneurial education and competencies to increase their chances of achieving better results in their businesses which in return can help to reduce the number of business failures and thus, boost the country’s economy.

Cross-level effects of entrepreneurial orientation and ambidexterity on the resilience of small business owners

ABSTRACT This study explores the effect of a firm’s entrepreneurial orientation on the individual resilience of small business owners and how this relationship is moderated by firm-level ambidexterity. We build on social cognitive theory to discuss whether and how the three dimensions of entrepreneurial orientation that is, innovativeness, proactivity, and risk-taking) interact with the two components of ambidexterity (that is, exploration and exploitation) to jointly influence the resilience of small business owners. Our findings indicate that a risk-taking orientation is positively related to resilience and that an innovativeness orientation causes resilience to suffer when an exploitative approach is pursued. For firms with a proactivity orientation, however, exploitation has a positive moderating effect. Our study adds to the literature by linking firm-level determinants and individual-level outcomes in the special context of small businesses.

Innovation in Small Businesses: towards an Owner-Centered Approach to Innovation

Abstract Purpose: We aim to understand how small business owners develop innovations. Theoretical framework: We adopt social cognitive theory to understand innovative activities in small businesses. We draw on Schumpeter’s work to understand how owners may develop innovations and how an owner-centered approach to innovation should take form. Design/methodology/approach: We conducted a multiple case study in small businesses from different traditional sectors. We conducted in-depth semi-structured interviews with the participants and we accessed data from social networks such as the Facebook and Instagram fan pages of the businesses. Findings: The results explain what drives business owners towards innovation and what affects the innovation structure of their businesses. These results are expressed through the antecedents of innovation that emerged from the field and may help in explaining the differences between innovative small businesses and non-innovative small businesses. Research Practical & Social implications: We developed an approach designed for studying innovation within the context and reality of small businesses. In order to contribute to the development of innovations in forgotten businesses, we have listed some recommendations for supporting agencies, government bodies, and researchers alike. Originality/value: Small business innovation is influenced by the owner’s propensity to recognize and act on opportunities. Therefore, the owner can guide the innovation activity in a small business and this needs to be considered by researchers.

The Psychological Contract: Examining the Differences in Entrepreneurial and Bureaucratic Contexts

The highly uncertain, fast-paced, opportunistic, change and challenge driven entrepreneurial context offers a distinctive backdrop for employment relationships relative to more bureaucratic, policy-guided organizational environments. It is proposed here that the entrepreneurial context influences employment relationships in a manner that tends to result in work arrangements that are often broader in scope, more open-ended and more customized than the more narrowly-focused standardized work agreements typical of bureaucratic organizations. Since psychological contracts lay at the foundation of employment relationships (Morrison & Robinson, 1997; Rousseau, 1989; Schein, 1965), we argue that entrepreneurial context imprints its own specific characteristics on the concept of a psychological contract (PC). Much of the previous research on psychological contracts has focused on what is defined here as psychological contracts in the bureaucratic organizational context. To date, relatively few studies have aimed at placing psychological contracts into the context of entrepreneurship and small business – the gap that the present article addresses through conceptualization. We demonstrate how psychological contract theory provides a unique framework to contrast the structure and content of employment relations within bureaucratic/organizational and entrepreneurial contexts, and makes it possible to bring to surface the primary distinctive characteristics and building blocks of psychological contracts in these two contexts. Previous research shows that work environments impact psychological contracts since the nature of the environment influences the nature of the obligations covered (Kissler, 1994; Morrison, 1994; Morrison & Robinson, 1997). Understanding the special characteristics of a psychological contract in entrepreneurial context provides theoretical grounding for explaining the employment dynamics in start-ups and scale-ups, corporate intra-preneurship and skunkworks/task forces.

Determinants of small business performance in a selected region in South Africa : the role of entrepreneurial orientation and competitive advantage

Background: Small businesses in South Africa are an important engine for economic growth. However, the failure rate amongst such businesses remains high. Purpose of study: There is an increasing need for research that explores how small business performs especially on the African continent noted to have a high failure rate of enterprises. The aim of the study was two-fold. Firstly, to ascertain the relationship between entrepreneurial orientation and business performance. Secondly, the study sought to ascertain the mediating effect of competitive advantage on the relationship between entrepreneurial orientation and performance. Design/Methodology/Approach: The study adopted a positivist approach utilising the quantitative methodology to survey a sample of 177 small business owners/managers. Results/Findings: The findings show the existence of a positive and significant relationship between entrepreneurial orientation and business performance. Further, the findings also show that competitive advantage mediates the relationship between entrepreneurial orientation and business performance. Recommendations: Based on these findings, interventions are proposed that relate to how business performance can be improved within an African small business context. Managerial implication: In addressing the failure rate challenge faced by small businesses, the study encourages continued quests and interventions that promote competitive advantage and entrepreneurial capability development.

The levels of base pay and incentive pay used by small firms to compensate professional employees with general and specific human capital

ABSTRACT Drawing on human-capital theory, we propose divergent associations of professional employees’ base pay and incentive pay with their levels of human capital in the small business context. Based on secondary data on 3,750 professional employees representing 65 small firms, we found that, whereas human capital has a positive relationship with base pay, the relationship between human capital and incentive pay is less apparent. Specifically, we found that the relationship between incentive pay and position-specific experience is negative. Our findings suggest that small firms may use higher incentive pay to initially attract talent. Yet, the incentive pay does not grow as professional employees gain firm-specific experience. Moreover, the incentive pay significantly falls as professionals gain more position-specific experience, and this negative relationship is stronger in small firms with higher sales productivity. Further, firm longevity shows a moderately significant positive relationship with base pay; however, the findings show that firm longevity is negatively related to incentive pay.

Exploring the link between management training and organizational performance in the small business context

PurposeThis study aims to explore the impact of management training on organizational performance in the small business context to evaluate whether formal management learning interventions bring organizational benefits to small enterprises.Design/methodology/approachA qualitative approach was adopted consisting of 100 interviews with small firm owners/managers and employees working in 50 Greek small enterprises operating in the manufacturing and services sectors. Participant firms consisted of 25 small enterprises (9 manufacturing firms and 16 firms in the services sector) whose owners/managers have completed various formal training interventions (i.e. accredited seminars and workshops, business and management courses, etc.,) and 25 small enterprises (16 manufacturing firms and 9 firms in the services sector) whose owners/managers have not completed any sort of formal business training and have never attended formal management courses.FindingsThe findings revealed that management training in small businesses had a positive impact on organizational performance. In particular, those respondents that completed formal training interventions argued that their firms achieved increased profitability during 2017 and 2018; improved staff productivity; very low staff turnover rate; and enhanced staff satisfaction and motivation compared with the less-trained owners of small firms in the same sector. The participants pointed out that their formal education in business and management has enabled them to realize the importance of employee learning and job design for staff motivation, whereas it has helped them to manage change more effectively.Practical implicationsThe present findings have major implications for practitioners (i.e. small firm owners/managers), as they point to a positive link between management training and organizational performance, thus encouraging them to invest in their self-development.Originality/valueThe existing evidence around the impact of management training on firm performance has been based mostly on quantitative research in large organizations. However, the available empirical studies fail to explore in-depth how formal management training can help smaller enterprises achieve improved organizational performance. Against this background, the present study sheds new light on this area.

Operationalizing Business Model Innovation through Big Data Analytics for Sustainable Organizations

Business model innovation is considered key for organizations to achieve sustainability. However, there are many problems involving the operationalization of business model innovation. We used a design science methodology to develop an artifact to assist business model innovation efforts. The artifact uses performance measurement indicators of the company’s business model, which are powered by Big Data analytics to endow customer-driven business model innovation. Then, we applied the artifact in a critical case study. The selected company is a fashion ecommerce that proposes a vegan and sustainable value using recycled plastic bottle yarn as raw material, and ensures that no material with animal origin is used. Our findings show that the artifact successfully assists a proactive and continuous effort towards business model innovation. Although based on technical concepts, the artifact is accessible to the context of small businesses, which helps to democratize the practices of business model innovation and Big Data analytics beyond large organizations. We contribute to the business model innovation literature by connecting it to performance management and Big Data and providing paths for its operationalization. Consequently, in practice, the proposed artifact can assist managers dealing with business model as a dynamic element towards a sustainable company.

Innovation capability in SMEs: A systematic review of the literature

Despite the profusion of innovation reviews, there is lack of reviews of innovation capability in small business context. There is a need to define the construct from a practical point of view by utilizing existing innovation research. Thus, this study aims to enhance the understanding about the characteristics of innovation capability in small business context by reviewing the empirical literature. This paper presents the results of a systematic review on the innovation capability in small businesses. As the main contribution, the paper identifies a holistic view of the evolving research on innovation capability in small businesses. Thus, the paper draws a picture of the topics investigated in the literature, and provides an understanding about the different communities of innovation capability research. There are no prior systematic literature reviews on innovation capability in small businesses. The results enhance understanding about the special characteristics of innovation capability in small business context. The presented characterization of innovation capability can guide further studies by offering precepts for how innovation capability can be comprehended among small businesses. Further, using the findings of this review, managers can improve their firms’ capability to innovate by acknowledging the multiple facets of innovation capability.

Driving Organizational Innovation as a form of Intrapreneurship within the Context of Small Businesses

In past decades the majority of intrapreneurship research refers to the process of improving organizational profitability, thus enhancing the competitive position within large organizations, while largely ignoring such value to smaller companies (Antonic & Hirsch, 2003; Garvin & Levesque, 2006; Ibrahim, 2016; Kocjancic & Bojnec, 2013). The purpose of this article is to stress the importance of practicing entrepreneurship, known as intrapreneurship, within the context small businesses. It is our belief that small businesses, like their larger counterparts, must evolve within a highly competitive environment where innovation is vital. We argue that intrapreneurship is not exclusively for large firms.

ICT Strategy and Micro-Entrepreneurs Growth: The Indonesian Case

The importance of Information and Communication Technology has been recognized but often undervalued by small businesses. Furthermore, best practices of ICT use in large companies do not always translate to a small business environment. Few studies have been done at the intersection of ICT and Micro and Small Enterprises (MSEs) in a ‘holistic’ manner taking into consideration various aspects of ICT adoption and use. The LIAISE framework provides guidelines for investigating various aspects of ICT adoption and use, including ICT literacy, information, and content, access, infrastructure and support, and evaluation. The framework was originally developed for the non-profit sector and has been applied in the small business context by examining MSEs in developing countries. Using a case study in Indonesia, this paper will use LIAISE as an analytical framework to investigate mobile phone adoption and use by micro-entrepreneurs.

Influence of mentors on networking behaviour of small business owners: a conceptual framework

The core purpose of this paper is to review the literature on networks and networking in relation to mentors within the small business context. The method was a review of literature including research and case studies related to mentors and networks and networking within the small business context from various databases. This literature review presents six propositions and a research framework for future studies in these areas where gaps are identified. New directions offered include: 1) examining the influence of mentors on small business owners' networks (structure, interaction and content) during different stages of network formation for both planned and accidental, or one off interactions; 2) researching the influence of mentors on the two main types of barriers to networking: operational and psychological barriers; 3) whether mentors can affect the success of inter-firm networks between a small business and other businesses.

Influence of mentors on networking behaviour of small business owners: a conceptual framework

The core purpose of this paper is to review the literature on networks and networking in relation to mentors within the small business context. The method was a review of literature including research and case studies related to mentors and networks and networking within the small business context from various databases. This literature review presents six propositions and a research framework for future studies in these areas where gaps are identified. New directions offered include: 1) examining the influence of mentors on small business owners' networks (structure, interaction and content) during different stages of network formation for both planned and accidental, or one off interactions; 2) researching the influence of mentors on the two main types of barriers to networking: operational and psychological barriers; 3) whether mentors can affect the success of inter-firm networks between a small business and other businesses.

Small business Total Worker Health: A conceptual and methodological approach to facilitating organizational change.

Nearly half of Americans are employed by small businesses, and future projections suggest that the number of those employed by small businesses will rise. Despite this, there is relatively little small business intervention research on the integration of health protection and health promotion, known as Total Worker Health® (TWH). We first discuss the importance of studying small businesses in TWH research and practice. Second, we describe an example of a small business TWH intervention, Health Links™ plus TWH owner/senior manager leadership training, that we are evaluating via the Small+Safe+Well (SSWell) study. Key features of the intervention and the SSWell study include attention to multi-level influences on worker health, safety and well-being; organizational change; and dissemination and implementation science strategies via the RE-AIM model. We offer several considerations for future small business TWH research and practice both in terms of the small business context as well as intervention development and evaluation. Our goal is to provide TWH researchers and practitioners with a framework and an example of how to approach small business TWH interventions. Ultimately, through the SSWell study, we aim to provide small businesses with strong evidence to support the use of TWH strategies that are practical, effective and sustainable.

Global sourcing risk management approaches: A study of small clothing and textile retailers in Gauteng

Background: Global sourcing has increased as buyers searched for new markets that offered better pricing, quality, variety and delivery lead times than their local markets. However, the increase in global sourcing has also exposed businesses to many supply risks.Purpose: The purpose of this descriptive qualitative study was to explore the global sourcing supply risks encountered by small clothing and textile retailers in Gauteng and to determine what supply risk identification and management approaches they utilise.Method: This study utilised semi-structured interviews conducted with 12 small clothing and textile retail owners.Results: The study found that the three major supply risks encountered by these retailers were fluctuating exchange rates, communication barriers and costly and complicated logistics, which included high customs costs. Furthermore, although aware of the supply risks, none of the small clothing and textile retailers had formal identification and management approaches in place. Instead, risks are dealt with at the sole discretion of the owner as and when they occur. The study also found that informal identification and management approaches were being applied by some of the retailers. These included factoring exchange rate fluctuations into the profit margins and using translators to combat communication barriers.Contribution: The study is one of the first empirical studies conducted on global supply risks and the associated identification and management approaches in the South African small business context, specifically focused on clothing and textile retailers.Conclusion: Small clothing and textile retailers need to proactively identify and manage global sourcing risk using the identified approaches in order to reduce and mitigate potential supply disruptions.

Antecedents of Business Intelligence Implementation for Addressing Organizational Agility in Small Business Context

Research on business intelligence (BI) has been rapidly proliferated in the field of information systems (IS). However, a limited number of studies has discovered its practical value and impact in business sectors. A lack of research on BI implementation specifically within small businesses may have an adverse impact on the effective decision making, especially to meet the demand of their organizational agility. The aim of this study is to conduct a theoretical analysis to identify antecedents of BI implementation in the small business context for improving the decision-making capability towards organizational agility. We operate a literature survey within the IS research domain to reveal the insights about the relation between BI and organizational agility. In this regard, 75 key articles have been reviewed and analyzed to find contributions towards BI and its impact on organizational agility. It is anticipated that the important antecedents are organizational, technological and personnel capabilities for BI implementation. The findings provide valuable insights for further research on BI implementation, especially to address organizational agility in small businesses

Automated Screw Type Briquetting Machine as A Small Business Venture

This study aims to develop an automated screw briquetting system that will be applicable as a small business venture in provincial areas of the Philippines. The existing manual briquette machine was integrated with automation equipment and software to facilitate continuous briquette production. The automated machine uses an induction motor fitted with a Variable Frequency Drive to control the motor’s rotational speed. A Programmable Logic Controller was used to facilitate the overall control of the briquetting system through the synchronization of the sensors and drivers. In addition, the machine features a band heater with a temperature controller and a control panel for safety and ease of operation. A simulation was performed to determine the optimal design configuration of the screw geometry applicable for automation. Experiments were performed by varying the temperature and screw speed to achieve optimal briquette quality. The automation results showed that briquettes of high quality can be produced at a rate of 10kg/hr. An economic feasibility study was done to show the machine’s viability in a provincial small business context.

The role of absorbed slack and potential slack in improving small business performance during economic uncertainty

PurposeWhile previous strategy research has provided significant attention to resource slack and its important roles in firm performance, particularly through strategic agility and flexibility in responding to environmental conditions, the majority of such theory and empirical work was developed for large business contexts. Therefore, the understanding of the relative contributions of absorbed and potential slack, particularly for resource-constrained small businesses, remains largely under theorized and unexamined. As many small businesses often face internal resource limitations, the ability to access external resources, in addition to internal resources, is likely significant, for firm performance, especially when small firms face high economic uncertainty. The paper aims to discuss these issues.Design/methodology/approachIn this paper the authors utilize a data set from National Federation of Independent Business on small business economic trends. The sample consists of approximately 13,000 US-based small and medium businesses.FindingsThe findings highlight the importance of resource slack in firm performance offering general support for the applicability of classic management theories to the small business context. Environmental hostility and competitive intensity appear to positively moderate the observed relationship between both absorbed and potential resource slack and performance, but in different ways. Environmental hostility positively moderates the relationship between potential slack and firm performance, while competitive intensity positively moderates the relationship between absorbed slack and firm performance.Research limitations/implicationsBecause most classic theories in strategic management were only theorized for, and examined through, large organizations, entrepreneurship research should consider these potential limitations and carefully consider factors differing between large and small firms.Practical implicationsBusiness owners and managers should be aware that not all types of slack have equal performance implications. Absorbed slack is extremely valuable in highly competitive situation. Therefore, business owners should develop plans to recover absorbed slack during highly competitive situations as a defensive strategy. One the other hand, potential slack forces more accountability, which lowers the possibility of small firms using it to engage in price wars, but it is extremely valuable during worsening economic conditions.Originality/valueIn this paper the authors separate absorbed slack from potential slack conceptually and then test their individual effects on firm performance. Through this study, the authors establish boundary conditions for the important role of resource slack on performance through the moderating roles of environmental hostility and competitive intensity.

The “Fairness Paradox” and “Small-Firm Growth Resistance Strategies”

Purpose– The purpose of this paper is to examine and explore why “Small-Businesses” resist employing outside the immediate family and investigate the employee as an outsider and entrepreneurial resource.Design/methodology/approach– The authors review the literature on barriers to small-business growth concentrating on key empirical and theoretical studies. The authors use empirical data from the Federation of Small Business in which informants commented on growth and employing outside the family.Findings– The findings suggest that small business owners adopt a polemical stance, arguing that a barrage of employment regulations deters them from employing outsiders because doing so brings trouble in terms of costs such as insurance, taxes, paperwork, leave (maternity and paternity) entitlement, etc. They argue that employing from inside the family or ones peer group is much cheaper, convenient and less hassle. This ignores the entrepreneurial employee as a potential ingredient of growth and points to a paradox whereby the very values and emotions characterized by fairness of which of “smallness” and “familialness” is composed compound the issues of discrimination central to the debate.Research limitations/implications– The paper offer important insights for growth issues among small businesses and challenge the contemporary equilibrium in terms of small “family-orientated” business philosophy relating to employment practices. Ideologically, the entrepreneur is an “outsider” fighting the establishment, yet paradoxically, in a small-business context s/he becomes the establishment by employing outsiders. This results in the fairness vs unfairness paradox.Originality/value– The paper contributes to the existing knowledge and understanding on growth issues among small businesses by illuminating a paradoxical insider vs outsider tension.

Проблематика «устойчивого туризма» в науке и образовании в России и за рубежом: сравнительный анализ

This article analyzes the current state and prospects of mainstreaming sustainable tourism in the basic educational programs of Russian universities, as well as identifying obstacles to the expansion of research topics in the field of sustainable tourism in Russia. The overview of Russian works in the field of sustainable tourism demonstrates that the most studied are natural, environmental aspects of sustainable tourism development in terms of long-term interests of society, while the social and economic dimensions of sustainable development of tourism are presented by a limited number of fragmented works. This situation in the domestic tourism science greatly contrasts with the ways of international tourism research in this area, where can be found a more balanced mix of studies, as the share of socio-economic research in the total volume of works on sustainable tourism is much higher.
 A significant lack of research on the socio-economic aspects of sustainable tourism development is established by content analysis of domestic and foreign publications, and by their comparative analysis. Thematic focus of international projects on sustainable tourism in Russia is also analyzed to arrive to some indicative conclusions. The only comprehensive project in the field of sustainable tourism is currently under way between the Russian State University of Tourism and Service and Telemark University College (Norway), and in many ways it is still the first and only one. The main reason for the observed bias in domestic research, according to the author, is a strong starting position of natural sciences in comparison to social onesl. Another reason may be the rigidity of domestic tourism researchers of the humanitarian and economic profile in relation to the issues of sustainability, when Russian economists and specialists in humanities are under the influence of more successful researches in natural science and they underestimate the whole palette of concepts and approaches of socio-economic nature, relevant to the issues of sustainable tourism, and that is the reason why they are mentally limited to just the recognition and enumeration of the most obvious and basic socio-economic aspects of sustainable tourism (such as local employment, infrastructure development, replenishment of local budgets, integration into the world economy), and do no not go further, do not proceed with conducting specific studies within broader and more concrete settings of sustainability issues.
 The issues of sustainable tourism in domestic tourist education are even less represented than in science. Over the past few years, only six Russian universities as part of their basic educational programs offered individual subjects to study sustainable tourism. To this can indirectly be added another dozen or so universities that offer disciplines in eco-tourism, and about two dozen universities offering courses on sustainable development, including some problems of tourism development. And only one university in Russia offers modules in sustainable tourism at the Master level, and that institution delivers three subjrects on sustainable tourism. It seems that the main problem in the Russian tourist education in the context of sustainable tourism is in some sense too "respectful" attitude to the subject of sustainable tourism, when it is believed that students should "grow" up to some level to get acquainted with this concept at a Master degree course of studies. In Europe, the concept of susyainable tourism is more culturaland widespread, and it is brought to bachelors just in more simple words and then at the Master level it is just taught with a higher academic rigor. This approach is in general culturally and professionally more productive. The second advantage of the European way of teaching sustainable tourism is that there is a much greater linkage between the concept and the context of small businesses, in other words sustainable developed not necessarily linked to the context of destination development and planning. Therefore, sustainable tourism is quite often studied in business schools.
 In his publication the author tries to draw the attention of the national scientific community to the problem of conceptual and epistemological backwardness of the Russian tourism science in comparison to the international tourism science when it comes to sustainable tourism issues. Present deficiencies in socio-economic research and educational programs can be eliminated within a few years if the national scientific and educational communities duly appreciate the whole range of issues of sustainable tourism and the promising outlook for research and educational programs in this field.