Aidan Berry

The evolution of managerial information, control and decision‐making processes in small growth‐oriented service sector businesses: exploratory lessons from four cases of success

Research into management information, control and decision‐making in small businesses appears on the surface to be contradictory. Some research suggests that small businesses have little management information, poor control and that decision‐making is ad hoc. Other research suggests that small businesses acquire effective information and control through informal means, and that decision‐making can be sophisticated. This research addresses these apparent contradications by conducting a longitudinal, in‐depth exploration of the management information and decision‐making processes in four service sector businesses that have recently broken through the micro‐enterprise barrier. Multiple sources of evidence were used to construct a longitudinal history of information provision and decision‐making in each case. These included taped, oral, accounts of each owner‐manager’s life, focused semi‐structured interview questions and documentary evidence. The quality of the data has allowed a cross case causal network to be constructed which synthesises the evidence. This traces the chains of causality from the informal systems at the start of the businesses through to the later developments of more formal systems. This leads to a consideration of implications for small businesses, practitioners and policy makers.

The role of non‐executive directors in UK SMEs

Influential reports combined with media attention on directors’ remuneration has sparked academic and practitioner interest in the whole area of corporate governance. Cadbury’s suggestion to strengthen the independent governance role has led to particular interest in non‐executive directors (NEDs). More recently, the role of NEDs in the governance of small and medium‐size enterprises (SMEs) has started to generate attention, and a number of registers of NEDs are established. Indeed, the role of NEDs in SMEs received special attention in the recent Hampel report (1998). Until recently, only two papers directly addressed the role of NEDs in SMEs; both papers were by Mileham and used data obtained from a survey concerned with the role of NEDs carried out with Institute of Management members. This research made a useful contribution, but had a number of limitations. More recently, the increased interest in the role of NEDs in SMEs has sparked further research, but there is still a need for an overall picture of NED and mentor involvement in UK SMEs. The research in this paper addresses this need by presenting the results from a survey sent to 5,279 UK SMEs selected from the Yellow Pages Business Database. The questionnaire was designed to provide a general overview of NED and mentor involvement in SMEs and to allow the following questions to be answered: How many SMEs have NEDs, and are there any firm size patterns? Are there firm age patterns? Are there firm sector patterns? Does firm size influence the formality of NED procedures? What does the managing director believe NEDs add? Are firms with NEDs more successful than those without a NED? Does the profile of the managing director matter? Does a firm’s size influence NED involvement? How do firms acquire NEDs? Why do some SMEs not have NEDs? The paper presents these findings and explores the implications for SMEs and policy advisors.

Encouraging group skills in accountancy students: an innovative apporach

This paper evalutes a three year programme in a UK university which recently won the Partnership Award from Cooper & Lybrand, Deloitte for innovation in higher education. The programme aims to encourage student to work in groups and to reflect upon the processes and the group dynamics involved. The first part of the paper provides the context for the paper and the context in which the programme runs. n example of a case study used in the programme is described in detail and the way in which it draws together subject areas within the degree is illustrated. Finally the programme is evaluted in terms of its successes and its problem areas.

Learning by doing: a case study of qualitative accounting research

The increasing number of masters degrees in accounting as well as specialist MBAs mean that an understanding of research methods is now an important part of the toolkit of accounting educators. In the literature there has been an increasing interest in qualitative accounting research. Whilst this interest has been mirrored by an increase in qualitative methods textbooks, less is known about the experience of undertaking such research. This presents a problem for educators, as they need material for students to work with and analyse before they are able to design their own research projects. This paper presents a case study based upon an extensive piece of qualitative research concerned with the use of accounting information in decision-making processes in banking. Review, exploratory and application questions provide a framework through which the case study can be used as a learning resource for accounting educators, supervisors and students.

SME top management team and non-executive director cohesion: precarious equilibrium through information asymmetry

Purpose – Research into top management team (TMT) performance and consensus has been equivocal; furthermore, research into the role of non‐executive directors (NEDs) in UK SMEs concluded that multiple perceptions of “reality” exist between directors. By adopting an innovative methodological approach to analysis, the “black box” complexity of SME board information processes, perceptions and TMT relationships are made visible. This allows the tension caused by differing perceptions of the NED role on a small company TMT to be explored. The aim of this paper is to do this.Design/methodology/approach – In an in‐depth case study of one SME board, four directors information and perception differences are investigated using a combined Johari window and set theory framework.Findings – Application of this innovative analytical framework allowed the information process and differing perceptions of multiple directors to be plotted systematically. This surfaces the normally hidden “generative mechanisms” underlying ...

The UK small business research community and its publication channels: perceptions and ratings

Research and dissemination of the results has always been an important activity for those in the academic community. The Research Assessment Exercise (RAE) has brought the whole area of research publication and dissemination into sharp relief, and striving for high research rankings seems, for some, to have become an end in itself. Some argue that the RAE has restricted the wider dissemination of research as academics focus on refereed journal articles to the detriment of other forms of output, eg professional articles, consultancy, books and practitioner conferences. The RAE has intensified interest in the purpose and process of publication in most discipline areas and has created considerable controversy regarding the status of different publication channels. The small business research area is no exception. This research provides a profile of the UK small business research community, it explores their perceptions regarding research and establishes the esteem that various publication channels are held. Defining precisely what constitutes the area of small business research is problematic. Indeed, providing a specific boundary would create a false precision, small business research overlaps with areas such as entrepreneurship and innovation, and it also draws upon a range of disciplines. Nevertheless, relative limits were placed on this research by the nature of the people who were asked to express their opinion and the questions they were asked. The attitudes were sought through a survey of active UK researchers (97 per cent of respondents had published in the area, 81 per cent were academics, 7 per cent were policy makers and 4 per cent business practitioners) listed on the Institute of Small Business Affairs/Small Business Research Trust database. The title and nature of these organisations suggests that those listed at least identify with the notion of small business research as an area. In addition, the questionnaire emphasised small business research throughout, and no mention was made of entrepreneurship, innovation or associated areas. Ninety‐eight questionnaires were returned, representing a 47 per cent response rate. The community was found to be more stable and mature than expected, but small business researchers held other research areas in greater esteem and most regarded themselves as empiricists rather than theorists. The implications of these results are explored for the next RAE and for the future of small business research.

Differing perceptions of non-executive directors’ roles in UK SMEs: Governance conundrum or cultural anomaly?

Abstract This paper presents a new model for the development of trust in the working relationships between managing director (MD) and non-executive director (NED) dyads in UK small- and medium-sized enterprises (SMEs). It proposes a NED role trust typology of NED tells, NED advises and NED acts. This typology is influenced by the literature on trust development in working relationships within corporate governance and in small business contexts. When UK SME NED role practice is mapped against this new model, different patterns of NED role trust emerge for MDs and NEDs. The MDs perceive a role biased towards NED advises, whereas the NEDs perceive a role that is balanced between NED tells and NED advises. This dual role was described by one NED respondent as being ‘schizophrenic’. This paper presents and discusses these findings and the implications for the wider corporate governance debate on NEDs, with particular reference to the recent UK banking crisis. The new model presents a possible explanation for governance failure attributed to the NEDs’ behavior and recommends that further research investigate whether the CEOs and the MDs that also act as NEDs on other boards exhibit these different patterns of NED role trust. Do they exhibit another form of schizophrenia or are they chameleons, that is, able to switch between different patterns of NED role trust with ease? Or are they just NED role impersonators, analogous to a contestant on Stars in Their Eyes? “Tonight Matthew I’m going to be … a non-executive director!”

SME managing director and non-executive director trust relations: The dynamic interplay between structure and agency

This article explores the trust relations between managing directors (MDs) and non-executive directors (NEDs) within small- and medium-sized enterprises. Complex mechanisms are revealed within repeated cycles of social interaction that result in the NED changing from an effective agent acting rationally on behalf of the company to an ineffective agent acting subjectively on behalf of the MD. Inherent tensions exist during this change of role and trust relations that threaten the self-esteem of both parties. NEDs being part of a peer network, serving for a fixed term and succession planning are proposed to counter these detrimental effects.