Swiss Small And Medium-sized Enterprises Research Articles

Understanding Managerial Action in Business Model Transformation of Small and Medium-Sized Enterprises

Small and Medium-Sized Enterprises (SMEs) typically adapt their business model opportunistically with new value propositions, adding partnerships or improving their cost structure. Business model transformation has been proven to drive SMEs innovation and success, however, the role of SME managers in facilitating such transformation remains unclear. While peer-to-peer sharing has received much attention in public debates and academic research, sharing among firms is largely neglected in both. Looking at current opportunities for SMEs in business-to-business (B2B) sharing, this research aims to identify recurring patterns of manager’s activities along a business model transformation for which a cross-case analysis with Swiss SMEs was used along several cycles of action research with semi-structured, deductively coded interviews.
 The research identified three phases of management action: managers focus on identifying the business opportunity, they adjust processes and technical infrastructure to enable their organization to seize the opportunity and involve the entire organization to ensure a lasting change in their business model. While the impact of B2B sharing on each SME may be considered limited, this research offers original insights how managers drive business model transformation in SMEs. It illustrates a novel process in three distinct phases while identifying dedicated managerial action for each phase.

Climate change awareness and mitigation practices in small and medium‐sized enterprises: Evidence from Swiss firms

AbstractThe objective of this paper is to investigate climate change awareness and mitigation effort and their associated motivating and limiting factors to pro‐environmental behavior and firm demographics in small and medium‐sized enterprises (SMEs) in Switzerland. For this purpose, a questionnaire was developed, conducted, and analyzed on motivating and limiting factors along with firm demographics, using descriptive statistics and ordinary least squares (OLS) and ordered probit regression models. The results show that Swiss SMEs are in general aware of climate change and their resulting consequences. SMEs have taken steps to help mitigate greenhouse gas emissions through recycling, reduction of energy and water consumption, and use of recycled packaging. SMEs could however improve their environmental impact through low‐carbon means of transport and use of public transport, sustainable raw material inputs, sustainable energy sources, and setting environmental goals and audits. There was a positive association between climate change awareness and mitigation. Motivating factors to pro‐environmental behavior included financial advantage and responsibility towards the environment, while firm size and human resources were limiting factors. Lastly, different mitigation measures might be influenced by different motivating and limiting factors including financial advantage and pressure from interest groups, as well as firm size.

The shift from owning to sharing: employing action research to facilitate SMEs’ business model transformation

The sharing economy has witnessed tremendous growth inamultitude of industries around the world over the past decade. Access to, and a more sustainable use of, resources, cost saving potential, and a multitude of strategic benefits have been identified as attractive opportunities for small and medium-sized enterprises (SMEs) to engage in business-to-business (B2B) sharing with some frustration by governments, researchers and practitioners that so little actual B2B sharing can be observed in industry practice. It remains a strategic challenge for SMEs to manage the shift from resource ownership to sharing since that transition requires a permanent change in their business model. In light of the transformational nature of this qualitative research gap, an Action Research methodology has been developed and implemented in partnership with a selected sample of Swiss SMEs favourably inclined towards B2B sharing activities. While discussing how Action Research might bridge the research gap and develop tangible, empirically grounded management recommendations, this paper also contributes specific Action Research methodology for other cases of transformational nature which present an ever more frequent and common scenario in business management research.

Swiss SMEs on Social Media Platforms: Own Profiles and Generated Reach

This research report describes the use of social media platforms by Swiss SMEs (small and medium-sized enterprises). For this purpose, numbers on own profiles (social media adoption) and numbers of followers (generated reach) were systematically collected and evaluated for a representative sample of SMEs in Switzerland (N=976).

Grabit: Gradient tree-boosted Tobit models for default prediction

Abstract A frequent problem in binary classification is class imbalance between a minority and a majority class such as defaults and non-defaults in default prediction. In this article, we introduce a novel binary classification model, the Grabit model, which is obtained by applying gradient tree boosting to the Tobit model. We show how this model can leverage auxiliary data to obtain increased predictive accuracy for imbalanced data. We apply the Grabit model to predicting defaults on loans made to Swiss small and medium-sized enterprises (SME) and obtain a large and significant improvement in predictive performance compared to other state-of-the-art approaches.

Profitability of RE-Technology Regarding the Economic Environment: A Case Study of Swiss SMEs

Considering the important changes in the Swiss energy sector, especially in renewable energy (RE) technologies, new revenue possibilities for small and medium sized enterprises (SMEs) emerge. However, the adaption of RE-technologies for Swiss enterprises relies on tangible financial returns, based on complex calculations. This article analyses business opportunities (BOs) of eight Swiss SMEs considering the net present value of RE-investments in an uncertain economic environment. We identify two profitable BOs for Swiss SMEs and three which are not profitable. Further, the article demonstrates that the profitability of such investments remains mostly positive even under economic uncertainties. Surprisingly the profitability does not change significantly if the SME receives a subsidy or not. The support instrument of the Swiss Government has not a ponderous impact on the decision to invest in RE-technologies or not. Therefore, the article emphasizes the importance of including SME in the Swiss attempt to decentralize the energy market.

Ethics of the firm, for the firm or in the firm? Purpose of extrinsic and intrinsic CSR in Switzerland

Purpose Despite the increased recognition and emphasis on corporate social responsibility (CSR) as a topic and highly formalised CSR control systems, numerous well-publicised problems and scandals often involving multinational enterprises (MNEs) continue to emerge. These companies are mostly extrinsically motivated in CSR. They operate with highly formalised CSR systems that, in many cases, miss the prevention of anti-social and illegal behaviour. This might reflect the failure of extrinsic CSR to integrate the ethical dimension and/or the failure of intrinsic CSR to formalise and thus benefit from economies of scale. Currently, the conviction is growing that if CSR is to have a meaningful impact, it should be a matter of intrinsic motives, morale and ethical values rather than a formalised management tool. This research aims to focus on a sample of small and large companies in Switzerland, aiming at a comparison of key motives for CSR related to actual CSR implementation, performance and company size. Design/methodology/approach The study examined two groups: seven owner-managers of small- and medium-sized enterprises (SMEs) and seven managers of MNEs. Each group met for two focus group discussions that were qualitatively and visually analysed using MAXQDA. Findings The results show that CSR implementation in the examined Swiss SMEs is more related to moral commitment than to profit maximisation. These companies are often driven by soft assets, such as networks, by the nexus of mission and value set; by a system of initiatives and integrated behaviour; by proximity and informal, flat organisational structures; by the aspiration and ambition of craftsmanship or excellent service (instead of profit); by community involvement; by recruiting from the local community; by the willingness to grow slowly and steadily; by the avoidance of atomic markets; and finally, by the mental set up and sociological tradition of the stewardship concept. This contrasts with the extrinsically motivated approach of the MNEs under research. While MNEs follow their approach of “ethics for the firm that must pay”, the findings here identified potential transition cases of “ethics in the firm” and “ethics of the firm” within Swiss SMEs. This is consistent with others, resembling the need of this dichotomy to be revised. Research limitations/implications The cross-sectorial approach limits the degree to which motives can clearly be attributed to actual CSR performance or company size. Practical implications The results imply that policymakers, public institutions, scientific community, etc. should be careful when establishing systems that favour financial returns from CSR engagement, because, first, other research showed that a behaviour attributed to extrinsic motives is mostly perceived as dishonest and misleading, for instance, consumers. Second, extrinsic motivation might crowd out morale and paying lead actors for behaving altruistically or philanthropically might decline their intrinsic motivation. Notably, the crowding out of intrinsic motivation by extrinsic incentives is a phenomenon well-researched not only in regard to CSR but in various other areas linked to human behaviour. This has important implications for nearly every business operation, especially for mergers and acquisitions, as well as for the growth of businesses. Social implications It seems unsuitable to support social goods in intrinsic CSR by the implementation of a system of financial incentives (or consequences). Thus, an economic cost-benefit is inappropriate where CSR needs an ethical stand. The difference between extrinsic and intrinsic CSR is very difficult to bridge – both have powerful incentives and drivers preventing a potential cross-over. Originality/value In sum, this study showed that CSR is meaningful and justifiable even if it is not profitable in the first place or implemented in and managed through formalised systems. This leads to two conclusions: first, care should be taken when emphasising the extrinsic approach in relation to social goods and second, the cost of a possible mismatch in a climate of ethical principles might be substantial for societies’ moral inclination.

‘I want this firm to be in good hands’: Emotional pricing of resigning entrepreneurs

Given the importance of non-economic considerations throughout the entrepreneurial life cycle, I aim to investigate the drivers of owner-managers’ ‘emotional pricing’ when they wish to sell their firms to successors. Emotional pricing thereby denotes those elements of the owner-managers’ price expectations that cannot be traced to economic considerations. Building on arguments from behavioral finance, I hypothesize that ‘emotional pricing’, which in this study reflects owner-managers’ willingness to sell the firm at a discount, is driven by the reluctance to lose access to information about the firm and to lose influence on the firm, and by an aversion to putting the firm’s future at risk. In particular, I argue that a long-term relationship between an owner-manager and a firm, a familiar relationship between an owner-manager and a successor, and situational contingencies – especially unsatisfactory firm performance – increase the owner-manager’s emotional-pricing component. I test the hypotheses using a sample of 1354 owner-managers of Swiss small and medium-sized enterprises (SMEs), who provided their views on their exit intentions. I subsequently compare those results to 455 actual ownership transfers involving Swiss SMEs.

Swiss CSR-driven business models extending the mainstream or the need for new templates?

Many Swiss small and medium-sized enterprises (SMEs) have highly sophisticated Corporate Social Responsibility (CSR) agendas embedded in corporate cultures that nurture a “raison d’être” far beyond formalisation. Previous research culminated in the characterisation of this core logic as “L’EPOQuE”, the overarching SME business model making Switzerland, arguably, a hidden champion in CSR. This paper explored by the method of a two-stage Delphi process the model’s consistency with criteria of conventional business models. It confirmed the core logic of L’EPOQuE and encouraged at the same time slight modifications with regard to nomenclature of sub-features resulting in L’EPOQuE 2.0. This heightened the power of this CSR-driven approach to be a new template for informal set-ups, and niches. It emerges from the difficulties some mainstream business models have to satisfy the needs of business at the nexus of culture and economic rationale.

Doing well or doing good?

Arguably, within Corporate Social Responsibility (CSR) the intrinsic motive is more significant than the extrinsic because the former induces a stronger involvement. Others showed that a behaviour attributed to extrinsic motives is mostly perceived as dishonest and misleading. This highlights how important the underlying motivation is for the perception, and thus, design and effectiveness of CSR frameworks. This study discusses these divergent motives with two focus groups: together with seven owner-managers of Small and Medium-sized Enterprises (SME) and seven managers of large companies. The results show that CSR implementation in Swiss SMEs is related more strongly to moral commitment than to profit-maximisation. Accordingly, small business CSR emerges from the nexus of mission and value-set and the sociological tradition of the stewardship concept. This contrasts the extrinsically motivated approach of the large companies under research. In sum, this study showed that CSR is meaningful and justifiable even if it is not profitable in the first place.

An emerging template of CSR in Switzerland

This paper investigates current Corporate Social Responsibility (CSR) practices of Swiss Small and Medium-sized Enterprises (SMEs) with the aim to aggregate an underlying SME business model as value driver of Swiss CSR. To analyse these patterns this study conducted 30 interviews. A two-step Delphi process challenged the results and enabled the aggregation and visualisation of – L’EPOQuE – as emerging template of CSR. Overall, there is a strong emphasis on ownership, or to be precise, ownership-within-tradition. Family/middle class capitalism and the political/historical background of Switzerland are deciding as well, whereas size and capacities astonishingly seem to matter less. This generated some testable hypothesis, e.g., on how the Swiss SME model will be received in particular settings to which it is “exported”. Further, Swiss SMEs turned out to be genuine “social enterprises” so that the relevance of “social business planning” needs to be questioned, certainly as a novel idea in Switzerland. Overall, this study challenges the primacy of formal management systems to support CSR in companies, especially SMEs, and addresses critical moments at which the nexus between small businesses, Swiss society, and the state might be adjusted

Domestic Business-to-Business Relationships and the Internationalization of SMEs

Relationships and networks are considered to play an important role in the internationalization process of firms. Our paper addresses this issue, by investigating the link between domestic business-to-business relationships and the internationalization of firms using a sample of 502 Swiss small and medium-sized enterprises (SMEs). Following a two-step approach we analyze how transactional relationships between SMEs and domestic companies listed at the stock exchange influence the export propensity and export intensity of SMEs. Our empirical results reveal heterogeneous effects of these relationships. While the domestic business-to-business relationships increase the export propensity of SMEs they decrease their export intensity.

Exploring innovating cultures in small and medium-sized enterprises: Findings from Central Switzerland

To date, knowledge about innovating culture in small and medium-sized enterprises (SMEs) remains a puzzle. In literature, entrepreneurship studies focus primarily on the entrepreneur or founder in start-ups. Most other SME innovation studies deliver a fragmented picture as they investigate singular aspects of innovating culture. Therefore, studies exploring the role of culture in SME innovation holistically are rare. This article presents the findings from a longitudinal study exploring innovating cultures in SMEs. The study applied an explorative research design based upon semi-structured and narrative interviews with those responsible for innovation management in 85 Central Swiss SMEs. From this data, four different SME innovation profiles representing clearly discernible innovating cultures were developed. The findings provide in-depth insights into SME innovation reality, thereby enhancing the understanding of the role of culture in SME innovation and providing a framework for improving innovation management.

Enterprise system investments for competitive advantage: An empirical study of Swiss SMEs

AbstractPrevious research identifies various reasons companies invest in information technology (IT), often as a means to generate value. To add to the discussion of IT value generation, this study investigates investments in enterprise software systems that support business processes. Managers of more than 500 Swiss small and medium‐sized enterprises (SMEs) responded to a survey regarding the levels of their IT investment in enterprise software systems and the perceived utility of those investments. The authors use logistic and ordinary least squares regression to examine whether IT investments in two business processes affect SMEs' performance and competitive advantage. Using cluster analysis, they also develop a firm typology with four distinct groups that differ in their investments in enterprise software systems. These findings offer key implications for both research and managerial practice.