Small Service Firms Research Articles

Quality management and organizational context in selected service industries of China

By developing an empirical taxonomy of quality management systems (QMS) in selected service industries in China, we compare the taxonomy of QMS developed in the service industries to that found in previous studies in manufacturing industries. We further investigate contingency relationships between the development of a QMS and its organizational contexts. Based on cluster analyses of quality management practices measured by the Malcolm Baldrige National Quality Award (MBNQA) criteria, we found four patterns of service quality management practices: undeveloped, accommodating, strategic, and soft quality systems. Our research indicates that the type of quality system adopted by an organization is highly associated with organizational contextual factors. Our results indicate that environmental uncertainty shapes the development of a QMS in the early stage, while the perceived importance of quality induces the further development of a QMS to a strategic quality system. The results also show that small service firms that compete locally can achieve very good performance results using a soft quality system, a QMS with no formal process management systems. This research provides empirical evidence on contingent relationships among quality management practices, organizational context, and business performance, thus contributing to contingency theory in quality management.

Small Firm Growth in the UK Regions 1994-1997: Towards an Explanatory Framework

H ART M. and M C G UINNESS S. (2003) Small firm growth in the UK regions 1994-1997: towards an explanatory framework, Reg. Studies 37 , 109- 122. This paper examines the scale of regional variations in small firm growth in the United Kingdom in manufacturing and services over the period 1994-97. An attempt is made to develop a theoretical framework to explain these variations and to provide an empirical test with the use of multivariate techniques. The results demonstrate that, particularly for the service sector, the nature of the external business environment provides an important part of the explanation of the observed spatial variations in small firm growth for the period 1994-97. There were quite distinct processes at work in determining the spatial variation in growth rates for small firms in the manufacturing and service sectors. This finding has important implications for interventions at regional and national level designed to enhance the fortunes of the small firms. The manufacturing equation, for example, identified the positive role of regional financial assistance in stimulating growth, while the influx of service sector FDI was a significant factor for the growth of small service firms.

The Interface between Transactional and Relational Orientation in Small Service Firm’s Marketing Behaviour: A Study of Scottish and Swedish Small Firms in the Service Sector

This paper presents and discusses findings of a cross-country study of small service firm marketing behaviour. These findings demonstrate that small service firms are flexible in the marketing approaches that they adopt. They reveal that such firms are transactional and relational orientated in their marketing activities and that for growing firms, marketing activities are used to create short-term transactions and form relations with key stakeholders. This finding implies that transactional and relationship marketing should be regarded as complementary. The findings presented also demonstrate that the marketing approach selected by participating small firms is determined by a range of customer characteristics of which repeat business is only one. An integrated framework containing elements of transactional and relational approaches is proposed as an appropriate way of describing the marketing behaviours of investigated firms.

Community and managerial predictors of performance in small rural US retail and service firms

Conducting business in today's rural community environment offers social and economic promise along with uncertainty in facing the phenomenon of having fewer customers, who make fewer visits, and spend less per visit. This research highlights the importance of both community and managerial factors to performance evaluations of small rural retail and service firm owners. Using path analysis, direct and indirect effects on perceptual and financial performance were identified for a national US sample of 275 rural small-sized retail and service businesses. This study provides information from largely successful firms for developing marketing strategies and product/service offerings as a crucial step in assisting businesses in rural communities.

Estratégia nas empresas de internet: lições da informalidade

Pesquisas realizadas sobre o tema de formação de estratégias em pequenas empresas indicam que estas não usam abordagens formais para o apoio ao processo de planejamento estratégico. Elas tendem a utilizar uma abordagem informal e oportunista na criação de estratégias. Os resultados deste artigo mostram que pequenas firmas de prestação de serviços para a Internet não adotam ferramentas do tipo tool-kit. Elas aplicam um conjunto de atividades influenciadas por três dimensões características na formação de estratégias: "incrementalismo", informalidade e networking. Este estudo revela, ainda, que as empresas não empregam, de forma sistemática, as ferramentas acadêmicas concebidas para apoiar o processo de desenvolvimento de estratégias. Essas ferramentas foram percebidas como consumidoras de tempo e impróprias para a adoção pelas empresas analisadas.

Internationalisation of Service Activities in the Haute-Garonne

Business service activities are more and more concerned with the internationalisation of their markets. Besides the well known examples of large global service firms, this process is also affecting an ever growing number of small-sized enterprises now acting at the international level. This article presents some empirical results from an original survey conducted in a French region with the Toulouse Chamber of Commerce. It shows the recent extent of the opening towards foreign markets, which concerns particularly the professional services. Business service firms having developed an international market activity (whether exporting by themselves or acting indirectly through local affiliates) belong mainly to three major types of activities: technical consultancy (including software industries and engineering), management consultancy (including also advertising, commercial intelligence and human resources consulting) and logistics (transportation and related activities). Most of them have begun without any local investment but have now developed different kinds of networks which are discussed in the article. Others remain 'pure' exporters exclusively relying on new telecommunication means to maintain relationships with their clients abroad. The survey reveals that small professional services firms are using original methods to cope with the difficulties of international service markets.

“Professionals at work” – transition in a small service firm

Small professional service firms constitute an important segment of the small business population. Explanations of the emergence, employment potential and economic contribution of such firms have been much debated. Yet, comparatively little is known of the “people dimension” in such enterprises, particularly in firms undergoing some form of organisational transition. This paper aims to examine the interplay of work relations and “growth” in the particular case of WhitCo (an organisation that was attempting the transition from its entrepreneurial beginnings to a more formally configured set‐up). The study, which is based on an ethnographic investigation in the case firm over a year‐long period, addresses three issues: the motivations for growth in the small professional service firm; the manner in which attempts at organisational transition impinge upon “collegial” patterns of work relations typical in these firms; and the importance of interpersonal relations to “growth”. The study provides a rare insight into the management of social relations within a firm typical of many in the business services sector. It highlights the critical role of “people management” to shaping the trajectory of small firm growth.

Small service firms – creating value through innovation

The debate over the innovative role of small firms has largely been resolved. However, researchers have yet to establish the basis for some small firms being more innovative than others and the impact of their innovations on their industry. There is also an imperative to augment current literature on small service firms. This paper presents a study of small service exporters and differentiates between three groups based upon their innovativeness. Using analysis of variance as the analytical technique, significant differences are found between groups, indicating that the more innovative firms are of greater potential value to their industry. The findings displayed in this paper support the push for innovation strategy as a means of developing new and emerging markets by pioneering small firms.

Examination of US Hispanic-owned, small retail and service businesses: an organizational life cycle approach

The importance of Hispanic-owned small businesses to the US economy has grown in recent years, yet, many of these businesses lag behind the performance of mainstream firms. One problem may be the lack of research on the strategic issues central to these businesses. This study attempts to fill this gap by examining the characteristics of Hispanic-owned small service and retail firms through the employment of the Churchill and Lewis (1983, Business Review, 30–50) organizational life cycle model. Five stages of business growth, typified by business performance indicators, problems, structural characteristics, and Hispanic owners’ demographics, were identified. Growth stages were found to be similar to those experienced by majority-owned small businesses. Theoretical and practical implications are discussed.

Management by association

A key characteristic of small business service firms is their capacity to draw on similar businesses or self‐employed professionals in order to compete with large organisations. This paper presents a qualitative account of the ways in which three small firms from the business services sector managed the critical relationship with associates. The rationale, recruitment and management of associates is explored. It is argued that “matching” approaches that suggest an easy alignment between the firms’ competitive strategy and use of associates fail to appreciate tensions inherent in the relationship. Rather, relations between such enterprises and associates have to be managed in a manner that recognises the particular expectations of the parties, the dynamics of “in‐house” work relations, and the often conflicting pressures occasioned by having to operate in a dynamic and unpredictable market environment.

Managing Autonomy: Employment Relations in Small Professional Service Firms

D R. MONDER RAM IS PROFESSOR OF Small Business and Director of' the Enterprise Research Centre at the University of Central England Buisiness School, United Kingdom. An inicreasingly noted feature of the small business population is the rise of the small professional service firm, yet comparatively little is known of the niature of employment relations in such enterprises. This paper aims to explore the maniner in which work is regulated in such settings by examining the internal management processes of three firms engaged in the provision of business and 'professional' services. The study, which is based on an ethnographic investigation over a year-long period, examines three particular processes that are deemed to be distinctive in this sector: recruitment, performance and supervision. Much of the rhetoric associated with social relations in such firms, for example collegialitv, person-centredness, trust, was evident in the study. BuLt it was clear that emiployee autonomiv still had to bc imanaged' and this process xwas a contingent and fluid one that often- contained a harsher edge thaIn existing accouints suggest.

Businesses without glamour? an analysis of resources on performance by size and age in small service and retail firms

Businesses without glamour? an analysis of resources on performance by size and age in small service and retail firms

Entrepreneurial dynamics in small business service firms

This paper examines the nature of entrepreneurial dynamics in small business service firms. The past decade has seen a rapid growth in the number of small business service firms, with a corresponding increase in their importance in terms of employment and income generation. Despite the growing body of research on the impact that the entrepreneur has on the performance of small firms, very little of this research has focused on small business service firms. This paper reports findings from a study of the entrepreneurship process in a sample of 20 small business service firms based in the west of Scotland. Using a qualitative research design, evidence is found that entrepreneurs revise their motivations, objectives and strategies over time as a result of changes in market conditions or their own expectations. The most prevalent new objective is found to be business growth which was pursued as a means of increasing profitability, which in turn satisfies both pecuniary and non‐pecuniary intrinsic motivations.

Regional Patterns of Business Performance Among Small and Medium Sized Public Accounting Firms in New York State

SEN J. and MACPHERSON A. (1998) Regional patterns of business performance among small and medium sized public accounting firms in New York State, Reg. Studies 32 , 827-838.This paper assesses the extent to which regional variations exist with regard to the growth performance and operating characteristics of small and medium sized firms (SMFs) in New York State's public accounting sector. Empirical evidence from a regionally stratified survey of 180 accounting firms is presented. Contrary to popular opinion, the results suggest that locational factors play only a modest role in the strategic behaviour of these firms. In addition, the data suggest that most SMFs in this sector have only recently been considering international markets as possible sources of new income. It is argued that non-local markets, and especially foreign ones, are not easily tapped by small producer service firms. Further, it is argued that the recent literature on producer service exports must be tempered by a more detailed consideration of the types of firms that operate within this segment of the economy. SEN J. et MACPHERSON A. (1998) La distribution régionale de la performance des petits et moyens cabinets d'experts-comptable situés dans l'état de New York, Reg. Studies 32 , 827‐838. Cet article cherche à évaluer dans quelle mesure il existe des variations régionales quant aux caractéristiques de croissance et d'exploitation des petits et moyens cabinets d'experts-comptable situe ´s dans l'état de New York. Des preuves empiriques provenant d'une enquête régionale de 180 cabinets d'experts-comptable se voient présenter. Contrairement à ce que l'on peut croire, les résultats laissent supposer que les facteurs de localisation ne jouent qu'un rôle peu important pour ce qui est du comportement stratégique de ces cabinets-là. Les données laissent supposer aussi que la plupart n'ont considéré que récemment les marchés internationaux comme une source nouvelle de revenu. On soutient qu'il s'avère difficile pour les petites sociétés de services à la production de pénétrer les marchés externes, et surtout les marchés extérieurs. En outre, on soutient que la documentation récente au sujet des exportations des services à a la production devrait être relativiséè a partir d'une réflexion plus mûre des catégories d'entreprises qui existent au sein de ce secteur d'activité économique. SEN J. und MACPHERSON A. (1998) Regionale Muster der Betriebsleistung kleiner und mittlerer öffentlicher Buchhaltungsfirmen im Staate New York, Reg. Studies 32 , 827‐ 838. Dieser Aufsatz schätzt das Ausmaß, in dem bei kleinen und mittleren Firmen des öffentlichen Buchhaltungssektors im Staate New York regionale Abweichungen im Hinblick auf Wachstumsleistung und Betriebseigenschaften bestehen. Es werden empirische Beweise von einer regional Schichten zugeordneten Untersuchung von 180 Buchhaltungsfirmen vorgelegt. Allgemeinen Annahmen zuwider lassen die Ergebnisse darauf schließen, daß Standortfaktoren nur eine geringe Rolle beim strategischen Vorgehen dieser Firmen spielen. Mehr noch: daß die meisten kleinen und mittleren Firmen dieses Sektors erst vor kurzem internationale Märkte als mögliche Quellen zusätzlichen Einkommens in Betracht gezogen haben. Es wird festgestellt, daß nicht-ortsansässige Märkte, und besonders solche im Ausland, nicht leicht von kleinen, Herstellern Dienstleistungen anbietenden, Firmen anzuzapfen sind, und darüberhinaus, daß kürzlich erschienene Literatur zum Export von Leistungen für Hersteller durch eine mehr Einzelheiten berücksichtigende Betrachtung der Firmentypen, die in diesem Teil der Wirtschaft operieren, ergänzt werden muß.

Social Networks: Their Impact on the Innovative Behaviour of Small Service Firms

This paper presents and discusses some findings of a research study that applied social network theory to small, professional business service firms. These findings demonstrate that social networks impact upon the innovative behaviour of small firms. They reveal that through the innovative use of social networks, small, professional business service firms are able to expand their customer and resource base while minimising the costs involved. The paper draws attention to the contents of the social networks in which a purposive sample of graphic design agencies are embedded. It demonstrates that multiplex relationships, particularly with individuals holding broker positions within these networks, are perceived to be important to innovative behaviour. The paper concludes by suggesting a number of recommendations for owner-managers, policymakers and researchers.

Predictors of organisational performance in small and medium-sized professional service firms

The paper sets out our theoretical and empirical approach to delineating predictors of stakeholder performance in medium-sized computer service firms. It combines a resource-based approach with recent insights from the literature on small and medium-sized firms, professional service, and computer-service firms. Top managerial capital (in terms of inspiration, competence, and communication) and organisational capital (in terms of external, professional, and employee orientation as well as networking, financial management, and market focus) are assumed to be major predictors of organisational performance.

Export decision-making in small firms: the role of organizational learning

The United States government and many state governments are promoting exports of technology and services in order to strengthen the nation's trade balance and increase its world market share in critical industries. Environmental technology and services have been targeted as an industry with strong export potential. Small- and medium-sized U.S. environmental firms, however, earn only a small percentage of their revenues from international sales. Many obstacles seem to inhibit small firms from responding positively to U.S. export promotion policies, but many of the problems may be rooted in their organizational paradigms and perceptions of external business conditions. This study analyzes how the organizational paradigms of small environmental service firms influence their competitive orientations and interpretations of the opportunities or threats involved in exporting. Our survey found that when these small firms value organizational learning they are more likely to consider exporting as an opportunity and more likely to act on that interpretation. The findings imply that it is not enough for export promotion programs to address small firms' concerns with economic results, they must also enhance their perceptions of the value of learning from exporting.

The Creation and Growth of Small Business Service Firms in Post-Industrial Britain

Since 1980, the United Kingdom has experienced a dramatic growth in firms and employment in information-intensive business services, such as management consultancy and market research. This article reports the results of the first substantial nation-wide investigation into the nature and causes of small professional business service firm growth in Britain, undertaken in 1991. It reveals marked differences in the characteristics, markets and competitive requirements of such firms, compared with small manufacturing firms. The demand for their services comes predominantly from large companies, and is more focussed on financial and other services and government. But small firms are also making increasing use of business services. Specialised expertise, reputation and educational and professional qualifications are essential prerequisites for the establishment of new business service firms. Their success is also being enhanced by increasing use of informal networking, collaborative partnerships, and subcontracting.

Small Firms and Local Economic Development in South London

A growing body of literature has identified a number of potential constraints on small firm growth. Arguably, the severity of these constraints is closely related to the differing fortunes of industries and firms and the extent of localised external economies or diseconomies. This paper looks at the constraints facing manufacturing and business service firms in a large urban area. The paper draws on findings from a survey of small firms in Croydon. Data from the survey reveal some differences between small manufacturing and service firms in their experience of the urban environment. Physical constraints on expansion and labour shortages appear to be hindering small manufacturing firms in Croydon. Deficiencies in specific niches of the local business service sector may be preventing small business service firms from complementing and enhancing their internal capabilities. The problems facing small firms in Croydon and the sorts of local policy initiatives being developed are likely to be applicable to other large urban areas.

EUROPEAN EXPORT STRATEGIES OF UK SMALL SERVICE FIRMS

The development of the Single European Market and the resulting publicity has persuaded many smaller firms to look to continental Europe as their first choice for market expansion opportunities. These include many UK small firms in the service sector where the economic benefits of a reduction in trade barriers are not so apparent. The approaches used by small service companies and professional practices in dealing with Europe are examined to identify the lessons learnt and to draw comparisons with Central Government advice. Semi‐structured interviews were held with managers from a randomly drawn sample of small firms in the UK with experience of exporting their services to Europe. The firms had experienced varying degrees of success with their forays into Europe. The study suggests that some small service sector firms may have greater potential in non‐EEC and/or English‐speaking nations than in Europe and that for many the experience of Europe has been expensive and erroneous. Small service firms should look to match their strengths to the market, which may be in Eastern Europe, South Africa or the Middle East, rather than tackle an EEC country where their competitive advantages are limited and market conditions may be hostile.