Martina Battisti

Small business responses to a major economic downturn: Empirical perspectives from New Zealand and the United Kingdom

This article analyses small firm responses to a major economic downturn, based on empirical investigation in the UK and New Zealand. Despite differences in the timing and depth of the downturn, there is remarkable similarity in the sectoral composition of small enterprises and methods of financing in reported recession-related effects and business performance during 2008–2009. While recognising that the study focused on surviving businesses, in neither country did the downturn have a consistently negative impact on small businesses and in both countries a significant minority of firms surveyed performed well. The study provides much needed evidence on small businesse responses to major economic crisis. Conceptually it demonstrates that although many small firms are vulnerable to changes in circumstances over which they have no control, they show underlying resilience and a high level of adaptability and flexibility. Longitudinal follow-up is necessary to show how the types of adaptive behaviour observed impact on business performance.

Learning, innovation and firm performance: knowledge management in small firms

This study aims to examine the relationships between managerial learning as a facet of knowledge absorption (KA), firm innovation as a facet of knowledge exploitation (KE), and performance of small firms (i.e., firms with fewer than 50 employees). It builds on the knowledge-based view of the firm and the upper echelons theory to describe the effects of KA on KE, and that of KE on firm performance, in the small-firm context. Using survey data of 1441 small firms in New Zealand, the study applies a partial least squares approach to structural equation modelling to test the main hypotheses of the study. The main findings show the positive and significant effects of three types of managerial learning, namely, practice-based, proximal, and distal learning, on innovation and on innovation in firm performance. However, the curvilinear relationships suggest rather that the effects are finite and, potentially, confounded by factors unaccounted for in the models.

The reality of management development in SMEs

The literature suggests that improving the management skills of owner-managers of SMEs contributes to their survival and growth and that there is considerable scope for further improvement in skills.xa0 However, evidence suggests that current support for management development (MD) does not meet the needs of SMEs. Nevertheless, there have been few changes on the supply side with policy makers continuously being concerned about low take-up of training. This study contributes to an understanding of how existing MD activities in SMEs can be better supported. Using Mumford’s (1987) typology of MD activities to classify our interview data, findings from interviews with 25 owner-managers suggest two approaches to providing learning support: (1) incorporate structured opportunities for individual reflection and reflection within groups; and (2) address participants’ concerns about training and mentoring. These findings have implications for policy makers and are timely given the current economic situation, where previous patterns of growth are being challenged and new ways of supporting MD in SMEs need to be found.

Entrepreneurial skill and regulation: evidence from primary sector rural entrepreneurs

Purpose – The purpose of this paper is to undertake a qualitative case-based analysis of the factors affecting the capability of primary sector rural entrepreneurs to manage regulation. The authors suggest a conceptual framework to aid understanding of their skill and capability when managing regulation. Design/methodology/approach – Using a multiple case study approach the entrepreneurial skill of rural entrepreneurs is examined in light of three sets of factors: institutional regulatory, social capital and economic market. Findings – The case analysis indicates diversity in the skill of rural entrepreneurs to manage regulation across sub-sectors including dairy and stock farming, fruit growers and vegetable/horticultural producers. The conceptual framework indicates that there are three areas that influence entrepreneurial skill: relationships with national cooperatives, relationships with the institutional regulatory environment and relationships with the economic market environment. This provides the ...

The relationship between dynamic capabilities, the firm’s resource base and performance in a post-disaster environment

This article draws on quantitative survey evidence to explore the role of dynamic capabilities in a post-disaster environment, that of Christchurch in New Zealand after the 2010 and 2011 series of major earthquakes. We develop a model to examine the relationship between dynamic capabilities, disaster-related changes to the firm’s resource base and its performance. The hypotheses are tested using a sample of 545 small firms that have been affected by the earthquakes. Results highlight the importance of a firm’s proactive posture and capability to integrate resources in recognising new opportunities in an environment characterised by high volatility and increased uncertainty. These findings offer important theoretical and practical implications.

The sustainability of small businesses in recessionary times : Evidence from the strategies of urban and rural small businesses in New Zealand

Purpose – The aim of this paper is to consider empirical evidence on the strategic behaviour of rural SMEs compared to urban SMEs in times of difficult economic conditions. The authors build the paper from a theoretical discussion that suggests that there will be distinctive differences in SMEs’ strategic behaviour across different settlement patterns, utilising resource‐based and opportunity‐based theoretical perspectives. This leads to three research questions which are concerned with three elements when comparing urban and rural SMEs; their characteristics, their performance and their strategic behaviours. The paper argues that the role and strategic behaviour of SMEs in the literature has been neglected.Design/methodology/approach – For this study, the paper is able to draw upon a data set of 1,411 SMEs from an annual survey of New Zealands SMEs. This is a national survey of SMEs and the paper has analysed the data to draw out distinctive differences with firms located in different urban or rural loc...

Challenges of Social Capital Development in the University Science Incubator The Case of the Graduate Entrepreneur

University science incubators (USIs) are sites where new entrepreneurial firms can be nurtured from initial conception through to commercial viability, usually over a period of around three years. Evidence suggests that USIs are an effective support mechanism for new ventures originating from nearby universities through the provision of facilities, advice and ready access to entrepreneurial networks. In essence, a USI focuses on compensating for the resource deficits of inexperienced and newly founded firms to facilitate the development of both founder and business, with the overall aim of fostering a growth-oriented strategy. Little attention has been paid, however, to how USIs compensate for the resource deficit of social capital. This paper uses a qualitative social network approach to explore the challenges faced by graduate entrepreneurs when developing and managing their social capital in the context of a USI. The authors find that, in the start-up process, social capital is not static, but rather is in a state of ‘becoming’, adapting to the changing resource needs of the enterprise. Furthermore, graduate entrepreneurs face specific problems associated with the relational and cognitive dimensions of social capital. Thus, the paper offers insights into how the USI enables graduate entrepreneurs to address the challenges of social capital development and the consequent implications for theory and practice.

Explaining the levels of innovation and R&D in New Zealand's small and medium-sized enterprises: Too many small firms?

Abstract This paper is concerned with explaining the levels of innovative activity in New Zealand’s SMEs. It is arguable that New Zealand provides a special case where innovation and R&D levels are comparatively low in SMEs, yet, paradoxically, it is also a nation of high rates of entrepreneurial activity. This paper seeks to examine the factors that affect innovation levels in New Zealand SMEs from an analysis of panel data set of 1500 SMEs. We test research propositions based on existing theory and literature on innovation levels in SMEs and discuss our findings. Firm size is found to be significant; we argue that New Zealand has too few growth firms rather than too many small firms and we suggest that barriers to innovation, such as access to finance, remain an issue which should be a focus for government support.

The role of intermediaries in the small business transfer process

This paper contributes to the emerging field of business transfer studies by providing qualitative, in-depth evidence on the role of intermediaries at different stages of the transfer process. Building on the resource-based view of the firm and agency theory, this paper identifies the specific resources different types of intermediaries offer small businesses in the transfer process. Further, it explores the role of intermediaries in managing risk and uncertainty in the interaction between buyer and seller. The results suggest that small business owners may need to navigate the use of a variety of intermediaries throughout different times leading-up-to and throughout the business transfer process. Finally, opportunities for further research are explored.

Predicting management development and learning behaviour in New Zealand SMEs

Despite concern on the part of policy makers to raise managerial capability in SMEs, there is little evidence on the key drivers of owner-manager participation in management development programmes. The authors argue that such participation is poorly understood. The paper develops a predictive model of the drivers of participation in sources of learning by owner-managers. It tests a theoretical model, based on the small firm as a learning organization, which posits that participation is driven by owner-managers learning orientation and the extent of their belief in self-improvement. The implications of the results are discussed in light of the provision of management development programmes.