Small- To Medium-sized Enterprises Managers Research Articles

The perspective of managers on integrating HR practices to increase organizational performance in SME firms: An analysis of the interaction effect

Purpose: The aim of this paper is to clarify the human resource management (HRM) literature in small-to-medium-sized enterprises (SMEs) by empirically identifying possible combinations of HRM practices from the perspective of managers, and analyzing the relationships among them and with organizational performance in order to identify which combinations are most effective.Design/Methodology/Approach: Using the AMO (Ability- Motivation-Opportunity) framework, we ask whether there are significant interactions between AMO-based HRM bundles and, if so, to what degree and by what means they influence organizational performance. To explore this question, we tested a theoretical model using Partial Least Squares-Structural Equation Modeling (PLS-SEM) techniques and compared the interaction and main effects. The research sample comprises SMEs operating in the Basque Region of Spain.Findings: The study confirms the existence of hierarchies among bundles. The practices most strongly related to the SMEs’ performance lie in the bundle of motivation-enhancing practices. The results indicate that motivation-enhancing practices have a positive effect on organizational performance and when they are combined with ability-enhancing practices this effect grows.Research limitations/implications: The cross-sectional nature of the data means that it is not possible to establish clear causal relationships among the variables studied. It would therefore be beneficial in the future to use longitudinal designs and examine cause-effect over time, as well as use samples from other geographic locations.Practical Implications: High-performance HRM practices in the three Ability-Motivation-Opportunity (AMO) dimensions should not automatically be assumed to be complementary in an SME context, as many managers believe. Our results suggest that managers would be well advised to adopt motivational practices, combining them with training, to improve SMEs’ performance.Originality / value: This is one of the few studies to focus on testing the interaction effects among dimensions of Ability-Motivation-Opportunity-enhancing-practices on SMEs’ organizational performance, as observed by managers. It will encourage SME managers to consider more carefully the possible combinations of AMO dimensions and to focus on those combinations most likely to have positive effects.

Export duration and product innovations: do born globals learn by exporting differently?

PurposeThis paper aims to study the learning-by-exporting effect among small-to-medium-sized enterprises (SMEs). Specifically, the authors propose a dynamic perspective and suggest that learning-by-exporting is duration-dependent and contingent upon the born global internationalization strategy. In earlier phases of export activities, exporting has had a strong positive effect on SMEs’ innovations, which, however, diminishes over time. This inverted U-shape effect is even more distinct for born global firms.Design/methodology/approachThe authors used longitudinal data with 1,689 Canadian SMEs to test their hypotheses. A two-stage instrumental approach is used to take into account the endogeneity of the born global international strategy on new product innovations.FindingsBorn globals learn faster at the early stages of exporting but also restrain their innovations more strongly than gradual internationalizers in the longer run, leveling out the initial learning advantages of newness. Thus, this study suggests that born globals have a significantly different learning trajectory than gradual internationalizers.Practical implicationsTo maximize the benefits of exporting on innovation, managers should focus on learning during the initial years of exporting. However, once this period has passed, it is advisable for managers to invest in research and development as well as other innovation activities to complement the learning effect of exporting. Born global firms experience more rapid learning at the initial stage of exporting, but such learning effects wear off quicker later than gradually internationalized firms. For SME managers, this study helps draw their attention to the learning benefits of exporting in the initial years of export participation.Originality/valueThis study corroborates recent studies arguing for a “learning-by-exporting” effect. Providing longitudinal firm-level evidence, the authors also forward a dynamic perspective and show that learning by exporting is duration dependent and contingent upon the market entry strategy pursued by SMEs.

Impact of business model innovations on SME’s innovativeness and performance

PurposeBusiness model innovations (BMIs), their drivers and outcomes are attracting increasing attention in academic literature. However, previous studies have mainly focused on large companies, while knowledge of BMI in small-to-medium-sized enterprises (SMEs) is limited. Therefore, the purpose of this paper is to add new insights into how related BMI drivers, practices and outcomes are in relation to SMEs.Design/methodology/approachAn extensive review of the existing literature was performed. Consequently, the relationships between BMI drivers, BMI practices and outcomes of BMI were developed as a conceptual framework. An empirical study was carried out. A structural equation modeling (SEM) procedure was used to empirically test the model using a quantitative data set of Lithuanian SMEs (n=73).FindingsThe study provides insights into the relations between BMI drivers, BMI practices and outcomes of BMI in SMEs. The findings of SEM, four drivers (innovation activities, strategic orientation, market and technology turbulence, respectively) are indicated to contribute to BMI of SMEs. In addition, the results proved that the implementation of BMI practices leads to strategic and architectural changes in firms and has a positive impact on SMEs performance and innovativeness.Research limitations/implicationsEmpirical research is focused on a limited number of internal and external BMI drivers, which have an influence on BMI in SMEs from one geographical region. Consequently, there are many external and internal BMI drivers which also may have an influence on BMI in SMEs, such as industry life cycle, organizational inertia and leadership. Meanwhile, SMEs possess multiple characteristics, i.e. a phase of maturity, gender of CEO, firm size and industry; therefore, the aforesaid aspects are considered to be significant limitations. In addition, the importance of SMEs characteristics as mediators for the effects on a firm’s performance and innovativeness should be considered in future research avenues.Practical implicationsFindings of this research can be used by SME managers to better understand how firms might actively engage in BMI practices, what drivers lead to BMI and, in turn, affect their firm’s performance and innovativeness. SME managers should be encouraged to pay attention to strategic and architectural changes of BM that can contribute to enterprise performance and innovativeness.Originality/valueThis paper adds to the stream of BMI research by empirically exploring drivers and outcomes of BMI in SMEs. In addition, this paper fulfills research gaps proposed by Bouwman et al. (2018), Foss and Saebi (2017), Heikkilä, Bouwman and Heikkilä (2018) and Lambert and Davidson (2013), and enhances the current overall understanding of BMIs.

Information Security Practices in Small-to-Medium Sized Businesses

Small to medium-sized enterprises (SMEs) in North America do not always adequately address security. Based on responses from 232 SME owners and managers, the authors found that the adoption of security recommendations made by experts appear to be significantly influenced by the decisions of other local SMEs. A hot-spot analysis of information security practices suggested that local trends lead to prioritizing certain security practices and not adopting others. Follow-up interviews with business owners and Chamber of Commerce directors provided insights on how security hotspots developed or not. The study identified both hot spot and cold spot communities, and sought to assess how local business networking conduits like chambers of commerce help promote best security practices

SME ambidexterity during economic recessions: the role of managerial external capabilities

PurposeMost literature on ambidexterity has focused on large firms and on the influence of internal issues in this strategy, that is, organizational structures, top management integration, or internal knowledge management processes (Lutbatkin et al., 2006; Chang et al., 2011; Lee and Huang, 2012). The purpose of this paper is to assess small- to medium-sized enterprises (SMEs)’ ambidexterity strategies during economic recession periods in comparison with those of large firms and identify the managerial external capabilities which are associated with the development of SMEs’ ambidexterity.Design/methodology/approachA multinomial logit model and a probit model are proposed and tested using data collected from 2,150 Spanish firms during the period of 2009-2013.FindingsThe data analysis reveals that SMEs develop more ambidextrous innovation strategies in recession periods than larger firms do. Moreover, two managerial external capabilities have been identified as drivers of SMEs’ ambidextrous behavior in crisis periods: first, the capability of top management to anticipate scenarios; and second, the capacity to acquire adequate external resources through co-operation.Practical implicationsThe results show that SME managers wanting to develop ambidextrous strategies in recession periods have to forecast scenarios in terms of innovation difficulties and strengthen their resources through co-operation. Implementation of public policy is encouraged to support these capabilities, thus enhancing SME sustainability in uncertain contexts.Originality/valuePrior studies have paid little attention to the role of external capabilities. Although their role was revealed as a relevant dimension in the study of SME ambidexterity in adverse contexts by Cao et al. (2010), it remained underexplored. This paper aims to fill this gap.

Management for Sustainable Development and Its Impact on Firm Value in the SME Context: Does Size Matter?

AbstractWith the increasing demands from society towards sustainable and social responsible business practices, management for sustainable development has become a cornerstone to understand the success of many firms in the current competitive context. This article investigates corporate social responsibility (CSR) and examines the links between CSR practices and business outcomes – both financial and non‐financial (i.e. image and corporate reputation) – for small‐to‐medium sized enterprises (SMEs). In addition, we also attempt to determine whether the impact of such relationships is moderated by firm size.To this end, we carry out a quantitative study using PLS techniques to analyze a sample of SME owners and managers, with a view to test the proposed model in the light of social capital theory. In this sense, our study is pioneering in that it aims to determine – from a quantitative viewpoint – the degree to which firm size has a moderating impact on a series of relevant CSR‐driven outcomes. The data suggest that, in SME contexts, CSR impacts corporate reputation, brand image and financial value of the company. Importantly, we find that the larger the firm, the greater the intensity of the relationships linking CSR and business outcomes. Hence, our findings have important implications for CSR implementation in SME contexts. Finally, we provide a series of guidelines aimed at maximizing the effectiveness of CSR‐based business practices. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Competitiveness of African Economies: A Case Study on How SMEs Can Analyze and Select African Countries for FDI

This paper overviews a valuable method by which world-wide countries/markets can be analyzed and compared for their relative attractiveness in terms of foreign direct investment and international trade. The method is grounded in theory developed by Wood and Robertson (2000), and is aimed specifically at aiding small to medium sized enterprises (SME) who may find global markets daunting. A case study focusing on a U.S. based SME, an alternative energy company investigating Sub-Saharan African market options is presented. The paper allows readers to understand why knowledge of a countries’ political and legal environment, infrastructure, economic trajectory, cultural realities and market potential are critical for international business success. In particular, SME managers can glean from this work, the importance of viewing multiple dimensions of global business (again, politics, economic, infrastructure, culture, legal systems and market potential), in a theoretically sound framework. The case of Sub-Saharan markets will demonstrate how such knowledge can be utilized to systematically and objectively assess which market(s) are the most promising for any company wishing to market any product or service to any country in the world.

Do family SME managers value marketing capabilities' contribution to firm performance?

PurposeThis paper seeks to extend knowledge on the impact of different marketing capabilities on various measures of organisational performance in the context of family‐run small to medium‐sized enterprises (SMEs).Design/methodology/approachAspects regarding marketing capabilities in family‐owned SMEs and their impact on superior performance are identified and briefly discussed according to the existing literature. Then, quantitative research is presented followed by a discussion of the findings. The paper ends with the conclusion, managerial implications, limitations and lines for future research.FindingsThe results of the study show the relevance of marketing capabilities for product differentiation to gain stakeholders' satisfaction. Other marketing capabilities related to marketing planning and pricing have a positive impact on financial performance.Originality/valueDifferent marketing capabilities have a different impact on various measures of performance. The nature of the marketing capabilities under consideration determines whether their main impact is on financial performance rather than on stakeholders' satisfaction.

Mapping of supply chain learning: a framework for SMEs

Purpose – The aim of this paper is to propose a mapping framework for evaluating supply chain learning potential for the context of small‐ to medium‐sized enterprises (SMEs).Design/methodology/approach – The extracts of recently completed case based research for ten manufacturing SME units and facts reported in the previous research are utilized for the deduction of proposed framework. Initially, 25 learning factors were extracted from the literature which were related to various learning characteristics of SMEs. This helped to develop a mapping framework comprising 55 arguments for evaluating supply chain learning potential/penetration in SME organizations.Findings – An application of the mapping framework is demonstrated for two case organizations.Practical implications – The framework will help SME managers to identify weak areas in their supply chain and adopt learning and knowledge management perspectives to improve upon select dimensions, such as customer responsiveness, flexibility, inventory manag...

Purchasing practices in small- to medium-sized enterprises: An examination of strategic purchasing adoption, supplier evaluation and supplier capabilities

The benefits that can be derived from effective purchasing have long been recognised in the management literature. Despite a growing body of research on purchasing practices in small- to medium-sized enterprises (SMEs), a number of key issues remain under-examined. We investigate SME purchasing practices in terms of (1) the degree to which purchasing is regarded as a ‘strategic’ activity by SMEs, (2) the use of supplier evaluation systems by SMEs and (3) the supplier capabilities emphasised by SME buyers. Through a survey of UK SME managers, we find that purchasing practices varied greatly across SMEs. Purchasing formality is generally low with limited evidence of purchasing being employed strategically and with many firms not undertaking formal supplier evaluations. In terms of supplier capabilities, we find that SMEs differ in the capabilities they prioritise, with three distinct groups evident. These groups are labelled ‘holistic’, ‘process’ and ‘logistics’ based on the supplier capabilities they emphasise. These three groups of firms also differed in terms of the emphasis they placed on strategic purchasing, supplier evaluation, technological focus and how they compete in their main markets, but not in terms of firm size or number of suppliers utilised. The implications of these findings are discussed and areas meriting future research are proposed.

The influence of strategy‐making types on IT alignment in SMEs

PurposeThe purpose of this paper is to evaluate and compare the influence of three strategy‐making modes (planned, adaptive and entrepreneurial) on IT‐business strategy alignment in small to medium‐sized enterprises (SMEs).Design/methodology/approachEmpirical research using a questionnaire was conducted. In total, 108 SME owners and managers participated in the study and the data were analysed using quantitative techniques.FindingsThe planned mode provided better results as predicted. Each strategy‐making mode was found to influence certain specific aspects of alignment and performance. For instance the planned mode ensures better understanding of business and IT objectives and provides high growth sales. The adaptive mode encourages participation of stakeholders in planning and improves communication and staff productivity. The entrepreneurial mode can facilitate immediate revision of plans in organizations operating in dynamic and competitive environment.Research limitations/implicationsMany factors influencing alignment were excluded. Second, the study was conducted in only three provinces and excluded the views of staff and IT personnel. These limit generalization of findings.Practical implicationsAssistance in planning and access to support programmes are necessary. Understanding the impact of SME characteristics can also assist the government in prioritizing resource allocations and focusing development programmes. The inconclusive results of this study, the impact on alignment of practices such as corporate governance, use of the balanced scorecard, and affirmative action should be researched further.Originality/valueThis was the first attempt to investigate the relationship between strategy‐making practices and IT alignment in South African SMEs. It provides empirical evidence confirming that these practices influence specific aspects of alignment and performance. SME managers can adopt the approach used to identify practices that ensure better alignment.

Toward understanding inter‐organizational knowledge transfer needs in SMEs: insight from a UK investigation

PurposeExternal knowledge is generally believed to be of prime importance to small to medium‐sized enterprises (SMEs). However, a review of the literature shows that no empirical research has looked at knowledge management issues at the inter‐organizational level in SMEs. This paper seeks to report on an empirical investigation with UK SMEs in the service sector to identify their needs and practices regarding inter‐organizational knowledge transfer, and thus provide empirical evidence to support the above belief.Design/methodology/approachA two‐tier methodology (i.e. using both questionnaire survey and interview approaches) is deployed to address the main research objectives. A questionnaire survey of SMEs is carried out to investigate their current inter‐organizational knowledge transfer situation and managers' perception on various relevant issues. Then 12 face‐to‐face interviews with SME managers are conducted to further validate key findings drawn from the questionnaire survey.FindingsThe empirical evidence collected from the survey and interviews confirms the general belief that external knowledge is of prime importance for SMEs, and demonstrates that SMEs have very strong needs for external knowledge and inter‐organizational knowledge transfer.Research limitations/implicationsThe findings provide very strong underpinning for further theoretical research on inter‐organizational knowledge transfer in SMEs. However, this study has certain limitations: its results may not be applicable to other industrial sectors or the same sector in other countries; or to micro or large companies; nor does it involve cross‐cultural issues.Originality/valueBy adopting a two‐tier research methodology, this study provides more reliable understanding and knowledge on SMEs' inter‐organizational knowledge transfer needs and practices, and fills the gap that exists in the empirical investigations on the subject.

Does size matter? Gender‐based equal opportunity in UK small and medium enterprises

PurposeThe purpose of this paper is to examine the take up of gender‐based equal opportunities policies and practices in small to medium‐sized enterprises (SMEs) and explores the relationship between size and take up within the SME sector.Design/methodology/approachThe paper draws on detailed data generated by a European Social Fund sponsored equality audit tool (breakthrough). This is an interactive, questionnaire‐based programme incorporating 60 questions on human resources policies and practices relevant to gender‐based equal opportunity. The questionnaire was administered within a structured interview, which was recorded and transcribed. In the North West of England, 80 SMEs, across a range of sectors, participated.FindingsThe data revealed that, while there was some evidence of take up of good equality practice in SMEs, many small businesses were not active in this area and indeed a sizeable minority were perpetuating discriminatory practices. Medium‐sized organisations were more likely to have, and implement, equality policies than small ones. However, in one area, around flexibility to meet carer responsibilities, the small organisations performed better. Analysis of moderating variables suggests that it is factors related to size, rather than size per se, that explain the differences in take up between small‐ and medium‐sized firms.Originality/valueThe paper highlights the need to find ways to engage SME managers with the equality agenda. It explores the distinctive features of the small firms and their environment which may inhibit this at present and set out an agenda for future research which will deepen understanding in this area and inform policy.

Small Firm Growth: Intentions, Implementation and Impediments

Recent evidence suggests that many small to medium sized enterprises (SMEs) in the UK experience difficulty growing from the start‐up phase into larger well established firms. This research uses survey data from UK instruments, printing and software SMEs to explore the attitudes of SME managers towards growth, to identify the strategies they pursue to achieve growth, and to establish the main factors they perceive to be limiting their growth. We find that although most managers profess to value growth and follow expansionary strategies, the main limits on the growth of SMEs are the intensity of competition stemming from the recession, and the inability or unwillingness of management to deal with the increased administrative burden arising from expansion.