Colin Gray

Absorptive capacity, knowledge management and innovation in entrepreneurial small firms

– The purpose of this article is to explore SME capacity to absorb and manage knowledge as a prior condition to the successful adoption of innovations and entrepreneurial growth., – Drawing on the findings from more than 1,500 SME owners across regular quarterly SERTeam surveys and from other large scale studies, this article examines the effects of experiential and formal knowledge on the development of SME absorptive capacity., – There were significant age, educational and size effects that influence SME acquisition and assimilation of knowledge. Primarily, it is the small firms of 15+ employees that have the capacity to absorb and use new knowledge – especially those with higher educational levels and clear growth objectives. These firms are not startups but they do tend to be younger firms with younger founders., – Given the main policy aim is the development of clusters and of knowledge‐based firms, policy makers should focus on SMEs recently started by graduates or people with technical qualifications; educators need to develop technology and innovation management programmes for these firms., – This article makes an important contribution to the identification of priorities for public SME development support and areas where business schools and enterprise trainers could maximise their economic and developmental impact.

Entrepreneurship, resistance to change and growth in small firms

The focus of this paper is on existing small firms, with fewer than 50 employees, and their attitudes to change, using data from regular quarterly small firm surveys conducted by the Small Business Research Trust, especially from the 1,212 respondents to the fourth quarter of 1999 (15:4, motivation, objectives and targets) and the 812 respondents to the first quarter 2000 survey (16:1, changes). The overlap between the respondents to these successive surveys allows their responses to be cross‐tabulated. It was expected that there would be strong positive links between growth‐orientation, the setting of financial objectives (as opposed to lifestyle goals), propensity to introduce changes and actual growth, and that age and size of firm effects will also be present and likely, as intervening variables, to influence these relationships. The findings confirm these expectations (and the mirror image of resistance to change linked to non‐entrepreneurial performance).

Management Development Key Differences between Small and Large Businesses in Europe

Driven by concerns over Europes competitive position in global markets, the role of leadership and management in boosting efficiency, productivity and innovation in European firms has moved up the public policy agenda. However, small firm participation in formal management development has been significantly lower than that for large organizations. The main focus of this article is on management training and development as a strategic activity. Seven partners in Britain, Denmark, Norway, France, Germany, Spain and Romania, took part in the LEONARDO programmes European Management Development project. Each surveyed structured samples of 100 firms, interviewing at least one senior manager and one line manager in each firm. This article contrasts the 191 small firms (20–100 employees) with 201 large firms (500 or more employees). The main contrasts in management development practices were partly due to size effects but also partly due to key differences in strategic approaches to management development.

Determinants of management development in small businesses

This paper examines statistically the determinants of management development in small businesses, based on the results of a survey of 389 small businesses carried out in 1996. Generally, the immediate issues concern the factors that influence the development of owners and managers of growing and sustainable small businesses, considered by many to be the source of future innovation and jobs in both developed and developing economies. More particularly, the survey is part of a wider investigation into management development in Britain, and the paper parallels a previous analysis of statistical determinants based on a survey of larger businesses. While entrepreneurship has received a lot of attention in small business research, comparatively little attention has been paid to the development of management competencies in small firms. In the study reported here, regression analyses were used to develop a more detailed understanding of the factors which shape the amount and nature of management development in small businesses. The key research questions, in line with the previous analysis, are: (1) what are the relative importance of environmental and structural factors on the one hand, and strategic factors such as internal management development policy on the other, in explaining the amount and value of management development activity? (2) what does this tell us about the degree to which management development is determined by choice or circumstance? (3) what are the “drivers” of management development and their relative significance? (4) what factors are most influential in assessing the achievement of management development objectives?

Management development in European small and medium enterprises

The problem and the solution. Of the 20 million or so firms in Europe, 99% are small and medium enterprises (SMEs) that employ fewer than 250 people and account for two thirds of the European workforce. Faced with increased global competition, mainly from Asian and U.S. firms, Europe’s policy makers are concerned with improving the quality of management in the SME sector. Because of the marginality (economic, cultural, personal) of small firms, however, it is generally assumed that these firms are too preoccupied with entrepreneurial activity and/or survival to take a sustained interest in management development. Is this the case?

Organizational learning and entrepreneurial strategy

Globalization, deregulation and new information and communication technologies (ICT) are having enormous effects on all types of business. Indeed, ICT are now adding two new sources of entrepreneurial business alongside start-ups and management buy-ins and buy-outs — rejuvenated established firms and downsized, out-sourced former larger businesses. Schumpeters five key areas of innovation (drivers of competitive advantage and entrepreneurial strategy) have taken on a new resonance as ICT have added others such as supply chain management, market information, financing and distribution. Outsourcing and ICT have made economies of scale quicker and easier to achieve for SMEs, but deeper and more extensive knowledge is required of the capabilities of ICT and of potential partners. Economies of scope also require increased knowledge of internal organizational capabilities and of potential external partners. Various studies in the UK highlight the increased importance to entrepreneurial small firms of ICT-supported networking with other firms and of the organizational knowledge that lies behind successful strategies in these areas. Thus, the ability of individual owners and managers to learn and the capacity for organizational learning within an SME become crucial determinants of success in the new knowledge economy. This paper is based on an intensive study of organizational learning among the smaller members of the UKs Institute of Directors (IoD). It identifies different levels of organizational learning and the characteristics of SMEs at different levels, with particular attention to differences in business strategies. The findings of the IoD study are augmented by findings from the independent non-profit Small Business Research Trust (SBRT). SBRT has collaborated with the Open University Business School in studies on the determinants of management development in SMEs and has longitudinal data for analysing whether there is a connection between growth-oriented, innovative, entrepreneurial SMEs and their propensity to network, to use ICT and to support learning in their organizations. Exploring the linkages between organizational learning and SME behaviour, strategy and performance, the paper concludes with a typology of SME strategies related to organizational learning and suggestions for future research in this area.

Absorptive Capacity and ERP Implementation in Indian Medium-Sized Firms

Whilst absorptive capacity has been identified as an important contributor to the effective implementation of IT systems, previous studies have failed to explicitly consider the contribution of individual and organizational knowledge processes. Nine case studies of Enterprise Resource Planning ERP implementation were undertaken. The case studies were all undertaken in SMEs in a developing country since this is an important but under researched area for the application of the concept of absorptive capacity. A particular implication of the findings is that firms lacking knowledge of IT implementation cannot simply seek this from external sources but must develop internal organizational knowledge processes if their implementations of IT systems are to be effective. This finding is particularly pertinent to the developing country and SME context of this study, where low levels of experience within the firm and the loss of experienced staff are found to impact on the development of absorptive capacity.

Enterprise trainees' self-construals as entrepreneurs

Abstract Although the past decade has seen a resurgence of interest in the economic and political aspects of the entrepreneur, most psychological studies have tended to concentrate on the identification of the “entrepreneurial personality” or the repertoire of traits that identify successful entrepreneurs. Even in career theory, the entrepreneur has received only passing attention, usually as an aberration from a neat stage development model or in the context of a psychodynamic explanation for individual work behavior. This article starts from the premise that the social representation of the entrepreneur, reflecting the past 10 years of public promotion, does not vary significantly among various groups but that aspiring entrepreneurs with realistic levels of aspiration reveal distinct construals of themselves as self and as entrepreneur. Using a range of subjects from a variety of enterprise training courses, all of whom aspired to be entrepreneurs, I used locus-of-control and attitude scales and busines...