Trust and strong ties in the selection and evaluation of business advisors by small firms

Principal Topic A small firm is unlikely to possess internally the full range of knowledge and skills that it requires or could benefit from for the development of its business. The ability to acquire suitable external expertise - defined as knowledge or competence that is rare in the firm and acquired from the outside - when needed thus becomes a competitive factor in itself. Access to external expertise enables the firm to focus on its core competencies and removes the necessity to internalize every skill and competence. However, research on how small firms access external expertise is still scarce. The present study contributes to this under-developed discussion by analysing the role of trust and strong ties in the small firm's selection and evaluation of sources of external expertise (henceforth referred to as the 'business advisor' or 'advisor'). Granovetter (1973, 1361) defines the strength of a network tie as 'a (probably linear) combination of the amount of time, the emotional intensity, the intimacy (mutual confiding) and the reciprocal services which characterize the tie'. Strong ties in the context of the present investigation refer to sources of external expertise who are well known to the owner-manager, and who may be either informal (e.g., family, friends) or professional advisors (e.g., consultants, enterprise support officers, accountants or solicitors). Previous research has suggested that strong and weak ties have different fortes and the choice of business advisors could thus be critical to business performance) While previous research results suggest that small businesses favour previously well known business advisors, prior studies have also pointed out that an excessive reliance on a network of well known actors might hamper business development, as the range of expertise available through strong ties is limited. But are owner-managers of small businesses aware of this limitation and does it matter to them? Or does working with a well-known advisor compensate for it? Hence, our research model first examines the impact of the strength of tie on the business advisor's perceived performance. Next, we ask what encourages a small business owner-manager to seek advice from a strong tie. A recent exploratory study by Welter and Kautonen (2005) drew attention to the central role of trust in this context. However, while their study found support for the general proposition that trust plays an important role in the choice of advisors, how trust and its different dimensions actually affect this choice remained ambiguous. The present paper develops this discussion by considering the impact of the different dimensions of perceived trustworthiness, defined as benevolence, integrity and ability, on the strength of tie. Further, we suggest that the dimensions of perceived trustworthiness relevant in the choice of a strong tie vary between professional and informal advisors. Methodology/Key Propositions Our propositions are examined empirically based on survey data comprising 153 Finnish small businesses. The data are analysed utilizing the partial least squares (PLS) approach to structural equation modelling with SmartPLS 2.0. Being non-parametric, the PLS algorithm is particularly well-suited to analysing small datasets with non-normally distributed variables. Results and Implications The path model shows that the stronger the tie, the more positively the advisor's performance is perceived. Hypothesis 1, that strong ties will be associated with higher perceptions of performance is clearly supported. Benevolence is clearly the most significant predictor of the choice of a strong tie for external expertise. While ability also reaches a moderate level of statistical significance, integrity does not have a statistically significant impact on the choice of a strong tie. Hence, we found support for two out of three independent variables included in Hypothesis 2. Path coefficients differed between the professional and informal advisor subsamples. The results of the exploratory group comparison show that Hypothesis 3a regarding ability being associated with strong ties more pronouncedly when choosing a professional advisor was not supported. Hypothesis 3b arguing that benevolence is more strongly associated with strong ties in the context of choosing an informal advisor received some support because the path coefficient in the informal advisor subsample was much larger than in the professional advisor subsample. Hypothesis 3c postulating that integrity would be more strongly associated with strong ties in the choice of a professional advisor was supported. Integrity is the most important dimension of trustworthiness in this context. However, integrity is of no concern, or even negative, when using strong ties to choose an informal advisor. The findings of this study have practical relevance to the enterprise support community. First of all, given that the strength of tie has a significant positive impact on the advisor's perceived performance, this implies that small business owners appreciate working with advisors in long-term relationships. Therefore, advisors are well advised to invest into relationship building and maintenance in their work with small firms. Secondly, the results show that, especially in the context of professional advisors, the advisor's perceived integrity and benevolence weigh more than ability. This again emphasizes the need to invest time and effort into building a personal relationship with the owner-manager, rather than merely maintaining a professional image and credentials. Finally, this study demonstrates that the dimensions of perceived trustworthiness are orthogonal with different effects on the strength of tie and ultimately perceived performance. This means that entrepreneurs and advisors should consider the specific dimensions of ability, benevolence and integrity, rather than rely on general perceptions of trustworthiness in their advice relationships.

Micro-family-owned business : transitory survival mechanism or long term wealth creator?

Principal Topic: Entrepreneurship is key to employment, innovation and growth (Acs & Mueller, 2008), and as such, has been the subject of tremendous research in both the economic and management literatures since Solow (1957), Schumpeter (1934, 1943), and Penrose (1959). The presence of entrepreneurs in the economy is a key factor in the success or failure of countries to grow (Audretsch and Thurik, 2001; Dejardin, 2001). Further studies focus on the conditions of existence of entrepreneurship, influential factors invoked are historical, cultural, social, institutional, or purely economic (North, 1997; Thurik 1996 & 1999). Of particular interest, beyond the reasons behind the existence of entrepreneurship, are entrepreneurial survival and good ''performance'' factors. Using cross-country firm data analysis, La Porta & Schleifer (2008) confirm that informal micro-businesses provide on average half of all economic activity in developing countries. They find that these are utterly unproductive compared to formal firms, and conclude that the informal sector serves as a social security net ''keep[ing] millions of people alive, but disappearing over time'' (abstract). Robison (1986), Hill (1996, 1997) posit that the Indonesian government under Suharto always pointed to the lack of indigenous entrepreneurship , thereby motivating the nationalisation of all industries. Furthermore, the same literature also points to the fact that small businesses were mostly left out of development programmes because they were supposed less productive and having less productivity potential than larger ones. Vial (2008) challenges this view and shows that small firms represent about 70% of firms, 12% of total output, but contribute to 25% of total factor productivity growth on average over the period 1975-94 in the industrial sector (Table 10, p.316). ---------- Methodology/Key Propositions: A review of the empirical literature points at several under-researched questions. Firstly, we assess whether there is, evidence of small family-business entrepreneurship in Indonesia. Secondly, we examine and present the characteristics of these enterprises, along with the size of the sector, and its dynamics. Thirdly, we study whether these enterprises underperform compared to the larger scale industrial sector, as it is suggested in the literature. We reconsider performance measurements for micro-family owned businesses. We suggest that, beside productivity measures, performance could be appraised by both the survival probability of the firm, and by the amount of household assets formation. We compare micro-family-owned and larger industrial firms' survival probabilities after the 1997 crisis, their capital productivity, then compare household assets of families involved in business with those who do not. Finally, we examine human and social capital as moderators of enterprises' performance. In particular, we assess whether a higher level of education and community participation have an effect on the likelihood of running a family business, and whether it has an impact on households' assets level. We use the IFLS database compiled and published by RAND Corporation. The data is a rich community, households, and individuals panel dataset in four waves: 1993, 1997, 2000, 2007. We now focus on the waves 1997 and 2000 in order to investigate entrepreneurship behaviours in turbulent times, i.e. the 1997 Asian crisis. We use aggregate individual data, and focus on households data in order to study micro-family-owned businesses. IFLS data covers roughly 7,600 households in 1997 and over 10,000 households in 2000, with about 95% of 1997 households re-interviewed in 2000. Households were interviewed in 13 of the 27 provinces as defined before 2001. Those 13 provinces were targeted because accounting for 83% of the population. A full description of the data is provided in Frankenberg and Thomas (2000), and Strauss et alii (2004). We deflate all monetary values in Rupiah with the World Development Indicators Consumer Price Index base 100 in 2000. ---------- Results and Implications: We find that in Indonesia, entrepreneurship is widespread and two thirds of households hold one or several family businesses. In rural areas, in 2000, 75% of households run one or several businesses. The proportion of households holding both a farm and a non farm business is higher in rural areas, underlining the reliance of rural households on self-employment, especially after the crisis. Those businesses come in various sizes from very small to larger ones. The median business production value represents less than the annual national minimum wage. Figures show that at least 75% of farm businesses produce less than the annual minimum wage, with non farm businesses being more numerous to produce the minimum wage. However, this is only one part of the story, as production is not the only ''output'' or effect of the business. We show that the survival rate of those businesses ranks between 70 and 82% after the 1997 crisis, which contrasts with the 67% survival rate for the formal industrial sector (Ter Wengel & Rodriguez, 2006). Micro Family Owned Businesses might be relatively small in terms of production, they also provide stability in times of crisis. For those businesses that provide business assets figures, we show that capital productivity is fairly high, with rates that are ten times higher for non farm businesses. Results show that households running a business have larger family assets, and households are better off in urban areas. We run a panel logit model in order to test the effect of human and social capital on the existence of businesses among households. We find that non farm businesses are more likely to appear in households with higher human and social capital situated in urban areas. Farm businesses are more likely to appear in lower human capital and rural contexts, while still being supported by community participation. The estimation of our panel data model confirm that households are more likely to have higher family assets if situated in urban area, the higher the education level, the larger the assets, and running a business increase the likelihood of having larger assets. This is especially true for non farm businesses that have a clearly larger and more significant effect on assets than farm businesses. Finally, social capital in the form of community participation also has a positive effect on assets. Those results confirm the existence of a strong entrepreneurship culture among Indonesian households. Investigating survival rates also shows that those businesses are quite stable, even in the face of a violent crisis such as the 1997 one, and as a result, can provide a safety net. Finally, considering household assets - the returns of business to the household, rather than profit or productivity - the returns of business to itself, shows that households running a business are better off. While we demonstrate that uman and social capital are key to business existence, survival and performance, those results open avenues for further research regarding the factors that could hamper growth of those businesses in terms of output and employment.

Corporate social responsibility–oriented compliances and SMEs access to global market : evidence from Bangladesh

The convergence of corporate social responsibility (CSR) and corporate governance has immense impact on the participants in global supply chains. The global buyers and retailers tend to incorporate CSR in all stages of product manufacturing within their supply chains. The incorporated CSR thus creates the difficulty to small- and medium-sized manufacturing enterprises (SMEs). Incompetence in standardized CSR practices is an important issue that causes SMEs either losing their scope to access global market directly or serving as subcontractors to large enterprises. This article explores this issue by focusing on Bangladeshi SMEs under the CSR requirement of the important global buyer.

Internet-enabled tourism entrepreneurs. International entrepreneurial values elicited through repertory test and laddering analysis

Although the tourism industry has been dramatically altered due to the Internet, there has been limited research published about international entrepreneurial values and Internet use in tourism firms. The findings of this study point to a relationship between the values of Internet-enabled international entrepreneurs in small-sized to medium-sized enterprises and the inclination of the firm to develop and initiate international activity. The findings of this study suggest that Internet-enabled tourism entrepreneurs share similar construct values. Two effective but underutilized qualitative methods were used in this study. The first method, repertory test, is an efficient technique for exploring constructs in decision making; the second method, laddering analysis, facilitates understanding of the perceived consequences and personal values guiding behaviour.

How nonprofit boards monitor, judge and influence organisational performance

The law and popular opinion expect boards of directors will actively monitor their organisations. Further, public opinion is that boards should have a positive impact on organisational performance. However, the processes of board monitoring and judgment are poorly understood, and board influence on organisational performance needs to be better understood. This thesis responds to the repeated calls to open the ‘black box’ linking board practices and organisational performance by investigating the processual behaviours of boards. The work of four boards1 of micro and small-sized nonprofit organisations were studied for periods of at least one year, using a processual research approach, drawing on observations of board meetings, interviews with directors, and the documents of the boards. The research shows that director turnover, the difficulty recruiting and engaging directors, and the administration of reporting, had strong impacts upon board monitoring, judging and/or influence. In addition, board monitoring of organisational performance was adversely affected by directors’ limited awareness of their legal responsibilities and directors’ limited financial literacy. Directors on average found all sources of information about their organisation’s work useful. Board judgments about the financial aspects of organisational performance were regulated by the routines of financial reporting. However, there were no comparable routines facilitating judgments about non-financial performance, and such judgments tended to be limited to specific aspects of performance and were ad hoc, largely in response to new information or the repackaging of existing information in a new form. The thesis argues that Weick’s theory of sensemaking offers insight into the way boards went about the task of understanding organisational performance. Board influence on organisational performance was demonstrated in the areas of: compliance; instrumental influence through service and through discussion and decision-making; and by symbolic, legitimating and protective means. The degree of instrumental influence achieved by boards depended on director competency, access to networks of influence, and understandings of board roles, and by the agency demonstrated by directors. The thesis concludes that there is a crowding out effect whereby CEO competence and capability limits board influence. The thesis also suggests that there is a second ‘agency problem’, a problem of director volition. The research potentially has profound implications for the work of nonprofit boards. Rather than purporting to establish a general theory of board governance, the thesis embraces calls to build situation-specific mini-theories about board behaviour.

Adapting, renewing, subverting : what place the performing arts in the creative industries?

Creative Industries was adopted as a platform in the 90s by the Blair government in the UK to describe the convergence of the arts, media, communication and information technologies as a newly formed cluster, providing economic and cultural capital for the knowledge economy. The philosophy and rhetoric which has grown around this concept (Leadbeater 2000, Castells 2000, Florida 2000, Caves 2000, Hartley 2000) has been influential in re-contextualising culture and the arts in the 21st century. Where governments and educational institutions have embraced the context of the creative industries, it is having a profound effect on the way arts are being positioned, originally as ‘creative content’ for the new economy. Countries and regions which have actively targeted the Creative Industries as an important economic growth factor in a post-industrial environment are numerous, but it is interesting to note that North and South East Asia and Australia have been at the forefront of developing the Creative Industries in its various guises. It could be argued that the initial phase of Creative Industries concentrated on media and communication technologies to provide commercial outcomes in small incubator business models; developing, for example, products for the games industry. Creative Industries is now entering a second phase of development; one in which the broader palette of the arts, though still not at the forefront of debate, is being re-examined. Both phases of Creative Industries have emphasised creativity and innovation as key drivers in the success and effectiveness of this sector, and although the arts by no means has a monopoly on these drivers, it is where they have an important part to play in the creative industries context. Arguably, the second wave of the creative industries acknowledges to a greater extent that commercialisation works in tandem with government and other support in a complex mixed economic model. In relation to the performing arts, the global market has seen an increase in large-scale cultural events such as festivals which are providing employment for the arts industry and multiplier effects in other parts of the economy. Differentiated product is important in this competitive arena and the use of mediated and digitised environments has been able to increase the amount of arts product available to an international market. This changed environment requires the development of new skills for our artists and producers and has given rise to a reappraisal of approaches to arts training and research in the Higher Degree Education sector (Brown 2007, Cunningham 2006). This paper examines pedagogical changes which took place in the first Creative Industries Faculty in the world at Queensland University of Technology as well as the increased opportunities for leading research initiatives. It concludes with the example of an interdisciplinary artwork produced in a creative industries precinct, exemplifying the convergence of arts and communication technologies and that of artistic practice and research.

Kaolinite-NMF intercalates

Bulk and size-fractionated kaolinites from seven localities in Australia as well as the Clay Minerals Society Source Clays Georgia KGa-1 and KGa-2 have been studied by X-ray diffraction (XRD), laser scattering, and electron microscopy in order to understand the variation of particle characteristics across a range of environments and to correlate specific particle characteristics with intercalation behavior. All kaolinites have been intercalated with N-methyl (NMF) after pretreatment with hydrazine hydrate, and the relative efficiency of intercalation has been determined using XRD. Intercalate yields of kaolinite: NMF are consistently low for bulk samples that have a high proportion of small-sized particles (i.e., <0.5 µm) and for biphased kaolinites with a high percentage (>60%) of low-defect phase. In general, particle size appears to be a more significant controlling factor than defect distribution in determining the relative yield of kaolinite: NMF intercalate.

Kaolinite - NMF intercalates

Bulk and size-fractionated kaolinites from seven localities in Australia as well as the Clay Minerals Society Source Clays Georgia KGa-1 and KGa-2 have been studied by X-ray diffraction (XRD), laser scattering, and electron microscopy in order to understand the variation of particle characteristics across a range of environments and to correlate specific particle characteristics with intercalation behavior. All kaolinites have been intercalated with N-methyl formamide (NMF) after pretreatment with hydrazine hydrate, and the relative efficiency of intercalation has been determined using XRD. Intercalate yields of kaolinite: NMF are consistently low for bulk samples that have a high proportion of small-sized particles (i.e., <0.5 µm) and for biphased kaolinites with a high percentage (>60%) of low-defect phase. In general, particle size appears to be a more significant controlling factor than defect distribution in determining the relative yield of kaolinite: NMF intercalate.

Multi-criteria ranking and source apportionment of airborne particulate matter

Particulate matter research is essential because of the well known significant adverse effects of aerosol particles on human health and the environment. In particular, identification of the origin or sources of particulate matter emissions is of paramount importance in assisting efforts to control and reduce air pollution in the atmosphere. This thesis aims to: identify the sources of particulate matter; compare pollution conditions at urban, rural and roadside receptor sites; combine information about the sources with meteorological conditions at the sites to locate the emission sources; compare sources based on particle size or mass; and ultimately, provide the basis for control and reduction in particulate matter concentrations in the atmosphere. To achieve these objectives, data was obtained from assorted local and international receptor sites over long sampling periods. The samples were analysed using Ion Beam Analysis and Scanning Mobility Particle Sizer methods to measure the particle mass with chemical composition and the particle size distribution, respectively. Advanced data analysis techniques were employed to derive information from large, complex data sets. Multi-Criteria Decision Making (MCDM), a ranking method, drew on data variability to examine the overall trends, and provided the rank ordering of the sites and years that sampling was conducted. Coupled with the receptor model Positive Matrix Factorisation (PMF), the pollution emission sources were identified and meaningful information pertinent to the prioritisation of control and reduction strategies was obtained. This thesis is presented in the thesis by publication format. It includes four refereed papers which together demonstrate a novel combination of data analysis techniques that enabled particulate matter sources to be identified and sampling site/year ranked. The strength of this source identification process was corroborated when the analysis procedure was expanded to encompass multiple receptor sites. Initially applied to identify the contributing sources at roadside and suburban sites in Brisbane, the technique was subsequently applied to three receptor sites (roadside, urban and rural) located in Hong Kong. The comparable results from these international and national sites over several sampling periods indicated similarities in source contributions between receptor site-types, irrespective of global location and suggested the need to apply these methods to air pollution investigations worldwide. Furthermore, an investigation into particle size distribution data was conducted to deduce the sources of aerosol emissions based on particle size and elemental composition. Considering the adverse effects on human health caused by small-sized particles, knowledge of particle size distribution and their elemental composition provides a different perspective on the pollution problem. This thesis clearly illustrates that the application of an innovative combination of advanced data interpretation methods to identify particulate matter sources and rank sampling sites/years provides the basis for the prioritisation of future air pollution control measures. Moreover, this study contributes significantly to knowledge based on chemical composition of airborne particulate matter in Brisbane, Australia and on the identity and plausible locations of the contributing sources. Such novel source apportionment and ranking procedures are ultimately applicable to environmental investigations worldwide.

Safety management in repair, maintenance, minor alteration, and addition works : knowledge management perspective

Safety of repair, maintenance, alteration, and addition (RMAA) works have long been neglected because RMAAworks are often minute and only last for a short period of time. With rising importance of the RMAA sector in many developed societies, safety of RMAA works has begun to draw attention. Many RMAA contracting companies are small- and medium-sized enterprises (SMEs) that do not have comprehensive safety management systems. Existing safety legislation and regulations for new construction sites are not fully applicable to RMAAworks. Instead of relying on explicit and well-established safety systems, tacit safety knowledge plays an extremely important role in RMAA projects. To improve safety of RMAAworks, safety knowledge should be better managed. However, safety knowledge is difficult to capture in RMAA works. This study aims to examine safety management practices of RMAA contracting companies to see how safety knowledge of RMAA projects is managed. Findings show that RMAA contracting companies undertaking large-scale RMAA projects have more initiatives of safety management. Safety management of small-scale RMAA works relies heavily on the motivation of site supervisors and self-regulation of workers. Better tacit knowledge management improves safety performance. To enhance safety capability of RMAA contracting companies, a knowledge sharing culture should be cultivated. The government should provide assistance to SMEs to implement proper safety management practices in small-sized projects. Potentials of applying computer software technology in RMAA projects to capture, store, and retrieve safety information should be explored. Employees should be motivated to share safety knowledge by giving proper recognition to those who are willing to share.

Compressed sensing using hidden Markov models with application to vision based aircraft tracking

This paper investigates compressed sensing using hidden Markov models (HMMs) and hence provides an extension of recent single frame, bounded error sparse decoding problems into a class of sparse estimation problems containing both temporal evolution and stochastic aspects. This paper presents two optimal estimators for compressed HMMs. The impact of measurement compression on HMM filtering performance is experimentally examined in the context of an important image based aircraft target tracking application. Surprisingly, tracking of dim small-sized targets (as small as 5-10 pixels, with local detectability/SNR as low as − 1.05 dB) was only mildly impacted by compressed sensing down to 15% of original image size.

Functionalized Ag nanoparticles with tunable optical properties for selective protein analysis

We present a preparation procedure for small sized biocompatibly coated Ag nanoparticles with tunable surface plasmon resonances. The conditions were optimised with respect to the resonance Raman signal enhancement of heme proteins and to the preservation of the native protein structure....