In today’s global economy, small and medium sized enterprises (SMEs) have greater opportunities to venture into foreign markets—an opportunity that was less feasible a few decades ago. While ...macro-factors of free-trade and lower transaction costs are the necessary conditions for all firms to expand globally, these are not sufficient for SMEs to expand. SMEs face significant challenges in entering new geographic markets due to their small size and the need for partnerships. Unlike larger firms, SMEs lack “natural market mechanism” to penetrate foreign markets. Instead, small and medium sized enterprises must rely on network ties to opportunistically expand internationally. Drawing from academic literature around embeddedness theory and network ties, this paper explores effective strategies for SMEs aiming to achieve global expansion. Specifically, how small and medium sized enterprises form effective international partnerships, with a focus on the benefits of weak ties over strong ties in providing complementary knowledge, broader access to partners, and avoiding entanglements.
Academic literature is rich with studies of small firms and of cultural diversity in the workforce—but very few academic studies have researched the intersection of the two. Academic research has ...looked at small firms and the factors that impact small firm performance, growth, and failure. Cultural diversity studies have included research focused directly on the degree of cultural diversity of firms regardless of size. However, the impact of cultural diversity on small firm strategy has not been extensively reviewed. The intersection of small firms and cultural diversity yields a number of interesting hypotheses. Specifically, this paper examines: (1) The level of managerial skill at diversity management has a disproportionately large impact on small business capability to develop competitive advantage out of diversity; (2) Niche-based cultural competitive advantage is stronger in small business than in large organizations; and (3) There is an inverse correlation between number of cultures and strength of diversity strategy in small firms—while the correlation is positive in larger firms that can handle more complex interactions.
Despite the influence and resources that large firms possess, small and medium size enterprises (SMEs) can find great success of their own when they find a niche with a sustainable competitive ...advantage. The literature has extensively discussed how SMEs can demand a price premium in a consumer segment based on focus differentiation. This paper explores how SMEs focus-based competitive advantage relies upon on competency-based factors that support their strategy. First, they have a non-scalable core competency that global firms cannot easily recreate due to their large size. Second, the emphasis for SMEs are on people or differentiation-based process core competencies, which also tend to be the most non-scalable. Third, SMEs find growth by shifting away from a niche to a differentiation strategy (if their core competency is scalable) or leveraging their non-scalable core competency to find a “string of opportunities” that are too small for large firms to notice separately, but taken together form a decent size business.
Despite the influence and resources that large firms possess, small and medium size enterprises (SMEs) can find great success of their own when they find a niche with a sustainable competitive ...advantage. The literature has extensively discussed how SMEs can demand a price premium in a consumer segment based on focus differentiation. This paper explores how SMEs focus-based competitive advantage relies upon on competency-based factors that support their strategy. First, they have a non-scalable core competency that global firms cannot easily recreate due to their large size. Second, the emphasis for SMEs are on people or differentiation-based process core competencies, which also tend to be the most non-scalable. Third, SMEs find growth by shifting away from a niche to a differentiation strategy (if their core competency is scalable) or leveraging their non-scalable core competency to find a "string of opportunities" that are too small for large firms to notice separately, but taken together form a decent size business.
In an attempt to support entrepreneurs, the U.S. Small Business Administration (SBA) offers loans to small firms. The SBA claims that it not only offers capital to small firms, but that it offers ...services and support to help them build capabilities. This study investigates whether the empirical evidence demonstrates an improvement in four-year survival rates for SBA-aided firms over the general population of small firms, and if there is any correlation between loan size and survival rates. Additionally, the study examines if women and minority-owned SBA-aided small firms (who are a traditionally under-represented demographic) improve their four-year survival rate. The results suggest that small firms that receive SBA loans do improve the four-year survival rate over the general population of small firms. However, loan size was not correlated with higher survival rates. The results also suggest that women-owned small firms experience a similar increase in survival rate, while minority-owned small firms do not receive a statistically significant increase.
Tacit knowledge is the key to business continuity and retaining core knowledge during organizational change. Corporations have recognized its importance and implemented knowledge management ...strategies to ensure valuable knowledge is preserved. While much of the academic research has looked into the nature of tacit knowledge, the role of social networks in maintaining tacit knowledge has been largely unexplored. The following paper seeks to link existing tacit knowledge theory with social network theory through theoretical analysis and literature review. First, social networks are more important when tacit knowledge cannot be codified and when the nature of that knowledge is process-based. Second, while the strength of relationships tends to increase the effectiveness of tacit knowledge transfer, weaker relationships tend to dominate the actual transfer of knowledge. Third, asymmetry in relationships tends to decrease effectiveness of tacit knowledge transfer. The purpose of the paper is to explore when social networks matter more for tacit knowledge communications and what types of social networks are most effective at transmitting tacit knowledge.
Leaders have a significant role in teams and groups, as they affect employee performance, motivation, and productivity. Given the significant position that leaders occupy in teams and group projects, ...this paper argues that it is important to simultaneously examine how trust in a leader, team interactions, and team performance interact with each other. Specifically, we formulated three hypotheses: First, we predicted a positive relationship between the level of trust that team members have in their team leader and the level of team performance; second, we predicted a positive relationship between the level of trust in a leader and the level of team interactions; last, we predicted that increased trust in a leader will increase team interactions and team performance. To test the model, we utilized data from 112 MBA students engaged in a web-based simulation game wherein students develop and execute the strategies for manufacturing and distributing a product. We used structural equation modeling to test these hypotheses. Our results support the importance and value of leader trust in team interactions. The results also indicate that team interaction positively influences team performance. However, they do not support our hypothesis that trust in a leader will positively influence team performance.
This study examines how customer interactions affects the organizational structure of service organizations, as well as how the alignment between firm structure and customer contact influences ...organizational performance. Results obtained from 234 service organizations in 96 different industries support our contention that variance in demand generated by the level of customer interaction strongly influences the type of structure a service firm adopts. High degrees of customer contact were significantly related to the use of higher degrees of organizational flexibility. In addition, the results indicate that firms that align organizational flexibility with customer contact achieve superior performance.
Families are an integral part of small and medium size enterprises (SMEs). Often family members are heavily involved with the operations of an SME, yet hold no formal role or title in the ...organization. The owner and CEO's spouse, children, or other relatives could hold disproportionate influence over decisions without any formal responsibilities. These active non-employee owners could have an impact on the organization culture or influence over employees. This paper looks at active non-employee owners' in SMEs and the emotional impact they have on non-family employees in hopes to explore in future research their organizational impact.
Experienced maintenance workers have acquired tacit knowledge: activities that made them proficient at their job. Activities most of them take for granted were learned over time and became a part of ...their skill set. Very basic skills such as knowing which way to turn a bolt to tighten or loosen it are honed at an early age. More complex skills become part of their tacit knowledge with training and practice. An electrician who quickly troubleshoots motor control circuits is using a higher level of tacit knowledge that has been honed by practice. Many companies fail to realize the importance of tacit knowledge in their employees until they are gone. This knowledge loss is now being compounded with the looming shortage in skilled trade labor. With fewer young workers entering the skilled trades, many maintenance jobs will go unfilled. At the same time, the few new workers entering maintenance do not possess the skill set needed to replace those retiring. A scarcity in maintenance labor will develop during the next five to 10 years as the Baby Boom generation begins to retire. A proactive approach to a skills deficiency is imperative for a company hoping to remain competitive. Let's face it, many industrial companies will be competing for the same group of skilled workers in the future.
PDF
