Josée St-Pierre

An expert diagnosis system for the benchmarking of SMEs' performance

Purpose – The purpose of this paper is to show that benchmarking allows SMEs to improve their operational performance.Design/methodology/approach – The paper presents a fully implemented expert diagnostic system which evaluates on a benchmarking basis the performance of SMEs.Findings – The research results with hundreds of SMEs show that benchmarking allows them to improve their operational and financial performance thus confirming the usefulness of benchmarking for SMEs, especially since traditional performance models for large enterprises do not apply well to SMEs.Research limitations/implications – Based on data mining techniques, future work should allow us to significantly extend our knowledge on SMEs, and further improve our evaluation model of SME performance.Practical implications – Practitioners and researchers should pay more attention to benchmarking as a valuable performance evaluation tool, not only for large businesses, but for SMEs as well.Originality/value – The paper highlights the develo...

Intangible assets and performance

Purpose – The purpose of this paper is to shed light on the nature of intellectual capital in small to medium‐sized enterprises (SMEs) and how it is linked to strategy and performance.Design/methodology/approach – Using structural equations, a multivariate model is presented where multiple relations are tested between different components of intellectual capital and performance. The model is tested first on a unique sample of 267 SMEs and second on two subsamples where SMEs are grouped according to their strategic profile.Findings – Findings confirm that SMEs that adopt different strategies organize their intellectual capital in a particular and adapted way. When an attempt is made to link intellectual capital components to performance, it is noticed that the latter is strategy specific, just as the variables that influence performance. Prospectors dominate defenders on most intellectual capital components.Research limitations/implications – Use of secondary data may provide less precise results that coul...

Strategic capability configurations for the internationalization of SMEs: A study in equifinality

With the advent of globalization and the knowledge economy, an important issue lies in the strategic capabilities that enable the internationalization of SMEs. Using a configurational approach grounded in strategic management and contingency theory, we argue that strategic capabilities can be leveraged for purposes of small business internationalization to the extent that they are coaligned and thus constitute capability configurations. This gives rise to a first research question: What are the different organizational configurations that characterize SMEs with regard to their strategic capabilities for internationalization? And aiming to analyze the configuration-internationalization performance relationship under the assumption of equifinality, a property of open systems, we pose a second research question: Do the different capability configurations that characterize SMEs lead to equally successful outcomes in terms of internationalization? In answer to these questions, this article presents the results of a study of 292 manufacturing firms located in Canada and France.

Customer dependency in manufacturing SMEs: implications for R&D and performance

In the now global business environment, SMEs are being subjected to increased pressures. In the manufacturing sector in particular, increased requirements for information and knowledge management, innovation, quality, and flexibility within new organisational forms such as the network enterprise entail organisational developments that can affect critical business processes, R&D in particular, and business performance. Hence, the customer dependency of manufacturing SMEs on certain important customers or the absence of diversification in their customer base can have significant impacts on the R&D activities, the productivity, and eventually the profitability of these organisations. Through an empirical study of 179 Canadian SMEs, it was found that more commercially dependent firms allocate more financial and human resources to product R&D. These firms are also less productive in that they have relatively fewer sales per employee. While customer dependency seems to negatively affect the SMEs’ profitability, firms whose product R&D activities are more intense report significantly higher gross margins. R&D activities could allow manufacturing SMEs to counter the influence of their major customers, by reversing the direction of commercial dependency, and thus to reduce their vulnerability.

Short‐term effects of benchmarking on the manufacturing practices and performance of SMEs

Facing increased competitive pressures due to globalisation and increased quality requirements from their customers, small and medium‐sized manufacturers must increase their productivity and their competitiveness in order to survive and prosper. One way of evaluating the attainment of this goal is to compare a firms business practices and performance with those of a group of comparable firms, or with those of firms that are recognised for their excellence – that is, to “benchmark” the organisation. As management challenges have increased in complexity, benchmarking has become a strategic tool for organisations, both large and small, and for governments seeking to assist them. However, given a lack of empirical research, little is known as to the actual impacts of benchmarking. With this in mind, the present study sought to test a model of the relationship between benchmarking, the adoption of advanced manufacturing systems, and the performance of small to medium‐sized enterprises (SMEs). The model was tested with data from 102 Canadian manufacturing SMEs that have participated in a benchmarking exercise.

Concentration of voting rights and board resistance to takeover bids

Abstract In this paper, we test the hypothesis that the probability of the targets board of directors resisting a takeover bid can be explained by two factors, transaction-specific variables and distribution of voting rights. Our study is conducted in Canada where the distribution of ownership and especially voting rights is more concentrated than in the United States. We find first that some transaction-specific variables are relevant. The past performance of the target, the premium and prior negotiations are negatively associated with the probability of resistance by the managers. Competing bids cause it to increase, but their effect is felt through their interaction with the premium. Given our specific information on prior negotiations, we interpret their effect as unambiguous evidence of risk-reducing behavior on the part of the board. The distribution of voting rights is also relevant: blocks of shares held by the directors are associated with an increase in the probability of resistance. This may be seen as evidence of managerial entrenchment. We document the degree to which these findings differ from those in the United States and seek to explain these differences. Our proxies for board composition are not statistically significant.

Strategic Capabilities for Product Innovation in SMEs A Gestalts Perspective

With the advent of globalization and the knowledge economy, an important issue has arisen concerning the relationship between the strategic capabilities of SMEs and their capacity to innovate. From a contingency perspective, one would argue that the firms strategic capabilities can be leveraged for the purposes of innovation to the extent that these capabilities are in strategic co-alignment. This gives rise to the following empirical research questions: (a) are the networking, R&D and technological capabilities of SMEs co-aligned such that one can observe different organizational gestalts, and (b) does co-alignment of these capabilities lead to a successful outcome in terms of innovation? In answer to these questions, the authors present the results of a study of 205 Canadian manufacturing firms. Through cluster analysis, three gestalts are identified – entrepreneurial SMEs, engineering SMEs and administrative SMEs. Analysis of these gestalts indicates that entrepreneurial SMEs clearly lead the other two in R&D capability and product innovation.

THE DETERMINANTS OF RISK PREMIUM: THE CASE OF BANK LINES OF CREDIT GRANTED TO SMEs

The goal of this paper is to gain a better understanding of the factors that determine the risk premium on bank lines of credit obtained by SMEs, and whether firm size, which may be used by banks to segment their client base, also has an impact on credit costs. An analysis of data from 406 SMEs in Canada showed the main determinants of risk premium were firm size, line of credit size, ability to repay, the relationship between banker and entrepreneur, and the length of the relationship with the bank. These determinants change according to the market segment in which the potential borrower operates. Banks appear to use a transactional approach for smaller borrowers, where credit terms are based on quantitative financial data, and a relational approach for larger firms, where relationship length and quality become significant.

A taxonomic approach to studying the performance of manufacturing SMEs

In this paper, we propose a taxonomic approach to organisational performance, that is, a holistic, multidimensional and integrated approach for a deeper understanding of the performance management task faced by SME owner-managers. The first research objective is to identify performance configurations or gestalts that allow one to characterise manufacturing SMEs in a meaningful and eloquent manner with regard to their organisational performance. The second objective is to determine the extent to which these configurations are conditioned by the environmental and organisational context in which performance is managed. To answer these questions, the results of an empirical study of 205 Canadian manufacturing SMEs are presented. Three configurations are found, that is, global performers, gazelles, and mature performers. These configurations are characterised and contextualised, the key finding being that a holistic perspective on performance is particularly useful in apprehending the behaviour of SMEs.

HRM capabilities as a determinant and enabler of productivity for manufacturing SMEs

In this article we assume that the entrepreneurial capability of SME owner-managers is reflected in the choices they make to coordinate their action in terms of human resource management (HRM), research and development (R&D), and advanced manufacturing technologies (AMT). However, to what extent do managerial choices made in these areas affect the performance of SMEs? And to what extent do the interactions of HRM capabilities with R&D and AMT capabilities also affect the performance of these enterprises? In order to answer these questions, an empirical study was conducted among 182 Canadian SMEs. Emanating from a perspective based on human systems and contingency theory, the results of this study indicate that the development of HRM capabilities allow SMEs not only to improve their productivity but also to significantly amplify the effect of R&D and AMT capabilities on this same productivity.