Entrepreneurship and family firms : a case study in growth and survival

Entrepreneurial marketing has gained popularity in both the entrepreneurship and marketing disciplines in recent times. The success of ventures that have pursued what are considered non-traditional marketing approaches has been attributed to entrepreneurial marketing practices. Despite the multitude of marketing concepts and models, there are prominent venture successes that do not conform to these and have thus been put in the ''entrepreneurial'' box. One only has to look to the ''Virgin'' model to put this in context. Branson has proven for example that not ''sticking to the knitting'' can work with the ways the Virgin portfolio has been diversified. Consequently, an entrepreneurial orientation is considered a desirable philosophy and has become prominent in such industries as airlines and information technology. Miles and Arnold (1991) found that entrepreneurial orientation is positively correlated to marketing orientation. They propose that entrepreneurial orientation is a strategic response by firms to turbulence in the environment. While many marketing successes are analysed in hindsight using traditional marketing concepts and strategies, there are those that challenge standard marketing textbook recommendations. Marketing strategy is often viewed as a process of targeting, segmenting and positioning (STP). Academics and consultants advocate this approach along with the marketing and business plans. The reality however is that a number of businesses do not practice these and pursue alternative approaches. Other schools of thought and business models have been developing to explain differences in orientation such as branding (Keller 2001), the service-dominant logic (Vargo and Lusch 2004) and effectuation logic (Sarasvathy 2001). This indicates that scholars are now looking to cognate fields to explain a given phenomenon beyond their own disciplines. Bucking this trend is a growing number of researchers working at the interface between entrepreneurship and marketing. There is now an emerging body of work dedicated to this interface, hence the development of entrepreneurial marketing as an alternative to the traditional approaches. Hills and Hultman (2008:3) define entrepreneurial marketing as ''a spirit, an orientation as well as a process of passionately pursuing opportunities and launching and growing ventures that create perceived customer value through relationships by employing innovativeness, creativity, selling, market immersion, networking and flexibility.'' Although it started as a special interest group, entrepreneurial marketing is now gaining recognition in mainstream entrepreneurship and marketing literature. For example new marketing textbooks now incorporate an entrepreneurial marketing focus (Grewal and Levy 2008). The purpose of this paper is to explore what entrepreneurial approaches are used by entrepreneurs and their impact on the success of marketing activities. Methodology/Key Propositions In order to investigate this, we employ two cases: 42Below, vodka producers from New Zealand and Penderyn Distillery, whisky distillers from Wales. The cases were chosen based on the following criteria. Firstly, both companies originate from small economies. Secondly, both make products (spirits) from locations that are not traditionally regarded as producers of their flagship products and thirdly, the two companies are different from each other in terms of their age. Penderyn is an old company established in 1882, whereas 42Below was founded only in 1999. Vodka has never been associated with New Zealand. By the same token, whisky has always been associated with Scotland and Ireland but never been with Wales. Both companies defied traditional stereotypes in marketing their flagship products and found international success. Using a comparative a case study approach, we use Covin and Slevin's (1989) set of items that purport to measure entrepreneurial orientation and apply a qualitative lens on the approaches of both companies. These are: 1. cultural emphases on innovation and R&D 2. high rate of new product introduction 3. bold, innovative product development 4. initiator proactive posture 5. first to introduce new technologies and products 6. competitive posture toward competitor 7. strong prolictivity for high risk, high return projects 8. environment requires boldness to achieve objectives 9. when faced with risk, adopts aggressive, bold posture. Results and Implications We find that both companies have employed entrepreneurial marketing approaches but with different intensities. While acknowledging that they are different from the norm, the specifics of their individual approaches are dissimilar. Both companies have positioned their products at the premium end of their product categories and have emphasised quality and awards in their communication strategies. 42Below has carved an image of irreverence and being non-conformist. They have unashamedly utilised viral marketing and entered international markets by training bartenders and hosting unconventional events. They use edgy language such as vodka university, vodka professors and vodka ambassadors. Penderyn Distillery has taken a more traditional approach to marketing its products and portraying romantic images of age-old tradition of distilling as key to their positioning. Both companies enjoy success as evidenced by industry awards and international acclaim.

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.

Financial accounting: building accounting knowledge

Financial Accounting: Building Accounting Knowledge is a new textbook written for the first financial accounting subject that a student majoring in accounting is required to study. Based on the successful introductory accounting textbook, 'Accounting: building business skills', this text will provide students and academics with a well written and accessible textbook on the principles of financial accounting, with ample illustrations and applications to business. The text maintains the balance between a 'user' and 'preparer' perspective effectively by integrating real financial information and business decision choices throughout the chapters. Through the use of real company information and financial statements students will quickly appreciate the use of accounting information. The textbook clearly outlines to students how accounting information communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for studying accounting.

Human resource management and innovation: what are knowledge-intensive firms doing?

An undeniable shift in focus from traditional production companies to Knowledge-Intensive Firms (KIFs) poses challenges for academics and practioners alike. In particular, effective management of an organization's human resources has become a critical issue for ensuring sustained innovation capacity. The relationship between Human Resource Management (HRM) in KIFs is however still a largely unexplored arena. The objective of this paper is to explore this relationship in an effort to identify HRM practices that support innovation. To this end, the paper includes reviews of the literature relevant to HRM and innovation in KIFs and four case studies from companies in Denmark and Australia that have been recognized for excellence in innovation. On the basis of content analyses conducted on the case data, some preliminary conclusions are posited regarding the role of HRM in KIFs. More specifically, the findings from this study suggest that while there are commonalities between HRM practices in traditional manufacturing companies and KIFs, there are also important differences, especially in terms of staffing practices. The paper contributes by offering recommendations for management of HRM in innovative KIFs and potential avenues for research to further develop our understanding of how HRM can support innovation in KIFs.

Uptake of an OHS code of practice by Australian construction firms

The Australian construction industry is moving towards the implementation of a voluntary code of practice (VCP) for occupational health and safety (OHS). The evidence suggests that highly-visible clients and project management firms, in addition to their subcontractors, will embrace such a code, while smaller firms not operating in high-profile contracting regimes may prove reticent. This paper incorporates qualitative data from a research project commissioned by Engineers Australia and supported by the Australian Contractors’ Association, Property Council of Australia, Royal Australian Institute of Architects, Association of Consulting Engineers Australia, Australian Procurement and Construction Council, Master Builders Australia and the Australian CRC for Construction Innovation. The paper aims to understand the factors that facilitate or prevent the uptake of the proposed VCP by smaller firms, together with pathways to adoption.

Uptake of an OHS code of practice by construction firms : barriers and enablers in an Australian industry

The Australian construction industry, reflecting a global trend, is moving towards the implementation of a voluntary code of practice (hereafter VCP) for occupational health and safety. The evidence suggests that highlyvisible clients and project management firms, in addition to their subcontractors, look set to embrace such a code. However, smaller firms not operating in high-profile contracting regimes may prove reticent to adopt a VCP. This paper incorporates qualitative data from a high-profile research project commissioned by Engineers Australia and supported by the Australian Contractors’ Association, Property Council of Australia, Royal Australian Institute of Architects, Association of Consulting Engineers Australia, Australian Procurement and Construction Council, Master Builders Australia and the Australian CRC for Construction Innovation. The paper aims to understand the factors that facilitate or prevent the uptake of the VCP by smaller firms, together with pathways to the adoption of a VCP by industry.

Mapping the regulatory environment : implications for construction firms

As regulators, governments are often criticised for over‐regulating industries. This research project seeks to examine the regulation affecting the construction industry in a federal system of government. It uses a case study of the Australian system of government to focus on the question of the implications of regulation in the construction industry. Having established the extent of the regulatory environment, the research project considers the costs associated with this environment. Consequently, ways in which the regulatory burden on industry can be reduced are evaluated. The Construction Industry Business Environment project is working with industry and government agencies to improve regulatory harmonisation in Australia, and thereby reduce the regulatory burden on industry. It is found that while taxation and compliance costs are not likely to be reduced in the short term, costs arising from having to adapt to variation between regulatory regimes in a federal system of government, seem the most promising way of reducing regulatory costs. Identifying and reducing adaptive costs across jurisdictional are argued to present a novel approach to regulatory reform.

Best Practice Guide : Generic Overview

The construction industry is a key national economic component. It tends to be at the forefront of cyclic changes in the Australian economy. It has a significant impact, both directly and indirectly, on the efficiency and productivity of other industries. Moreover it affects everyone to a greater or lesser extent; through its products whether they are manifested in the physical infrastructure that supports the operation of the economy or through the built environment that directly impacts on the quality of life experienced by individuals. In financial terms the industry makes one of the largest contributions to the Australian economy, accounting for 4.7 per cent of GDP 1 which was worth over $30B in 20012. The construction industry is comprised of a myriad of small firms, across several important sectors including, o Residential building, o Commercial building, o Building services, o Engineering, o Infrastructure o Facilities Management o Property Development Each sector is typified by firms that have distinctive characteristics such as the number of employees, size and value of contracts, number of jobs, and so forth. It tends to be the case that firms operating in commercial building are larger than those involved in residential construction. The largest contractors are found in engineering and infrastructure, as well as in the commercial building sub-sectors. However all sectors are characterised by their reliance upon sub-contractors to carry out on-site operations. Professionals from the various design consultant groups operate across all of these sectors. This description masks one of the most significant underlying causes of inefficiency in the construction industry, namely its fragmentation. The Construction Industry chapter of the 2004 Australian Year Book3, published by the Australian Bureau of Statistics unmasks the industry’s fragmented structure, typified by the large number of operating businesses within it, the vast majority of which are small companies employing less than 5 people. It identifies over 190,000 firms, of which over 90 percent employ less than 5 people. At the other end of the spectrum, firms employing 20 or more people account for fractionally more than one percent of businesses in the industry.

Inward exporting of professional services : lessons from an exploratory study of Australian educational firms

Inward export activities for services companies have been largely neglected in the literature. Little is known about how professional service firms export to overseas consumers who travel to the domestic market of the firm. This study utilizes a resource-based perspective (RBV) to explore the main barriers and drivers of export performance for professional education services. A case study of Australia’s education industry, as well as interviews with executives from four Australian education institutions, was conducted. Findings show that inward exporters confront most barriers in the domestic market where the service is provided, and drivers of export performance combine firm- and country-specific resources.

Analysing the internationalisation readiness of firms

The internationalisation of firms has gained much research attention since the 1970s. However, the behavioural aspect of firms’ during their pre-internationalisation phase has not been sufficiently explored. This research proposes that a pre-internationalisation focus would not only offer an additional perspective to the study of firm internationalisation but would also address the significant research gap in studies that are theoretically based around the Uppsala Model. This study views the development of a firm from its pre-internationalisation phase into an international firm in accordance with the Uppsala Model’s ‘state’ to ‘change’ aspect transition, with ‘internationalisation readiness’ established as the missing link between these two aspects. During the pre-internationalisation phase, a firm is exposed to a wide variety of internal and external stimuli that triggers an impulse for foreign market expansion. The perception of these stimuli and the attitudinal commitment taken by the firm’s decision-makers, as well as the firm’s resource capabilities and the moderating effect of lateral rigidity, are influential towards an internationalisation decision. This paper argues the significance of adopting the pre-internationalisation phase as a research platform and the importance of analysing firms’ internationalisation readiness. A method is proposed for the development of an Internationalisation Readiness Index that could be used for measuring a firm’s propensity to commence its first export operation.

The successful influence of teaching ethics on Malaysian accounting students

The Malaysian accounting profession is committed to promoting education that results in a strong ethical culture within accountants. However, some consider ethical training unproductive since trainees may have their ethical values formed pre-commencement. This paper investigates the impact of ethics instruction on final year accounting students, the future accountants of Malaysia. 85 final year accounting students were given five ethical scenarios, and asked what action they considered appropriate. They were then subject to two ethical training methodologies, a traditional lecture/tutorial process and a group assignment. After a significant gap, students were re-presented with the ethical scenarios and asked what action they now considered appropriate. In all five instances students offered a more ethical response the second time. Also, participants rated both training methods and their combined effect as effective. Results suggest there is benefit in including ethics teaching and indeed emphasising its importance in accountancy courses, if the profession’s goal of ethical practitioners is to be achieved.

The Innovation Management Program (IMP) : a holistic approach to managing change in knowledge based firms

Innovation Management (IM) in most knowledge based firms is used on an adhoc basis where senior managers use this term to leverage competitive edge without understanding its true meaning and how its robust application in organisation impacts organisational performance. There have been attempts in the manufacturing industry to harness the innovative potential of the business and apprehend its use as a point of difference to improve financial and non financial outcomes. However further work is required to innovatively extrapolate the lessons learnt to introduce incremental and/or radical innovation to knowledge based firms. An international structural engineering firm has been proactive in exploring and implementing this idea and has forged an alliance with the Queensland University of Technology to start the Innovation Management Program (IMP). The aim was to develop a permanent and sustainable program with which innovation can be woven through the fabric of the organisation. There was an intention to reinforce the firms’ vision and reinvigorate ideas and create new options that help in its realisation. This paper outlines the need for innovation in knowledge based firms and how this consulting engineering firm reacted to this exigency. The development of the Innovation Management Program, its different themes (and associated projects) and how they integrate to form a holistic model is also discussed. The model is designed around the need of providing professional qualification improvement opportunities for staff, setting-up organised, structured & easily accessible knowledge repositories to capture tacit and explicit knowledge and implement efficient project management strategies with a view to enhance client satisfaction. A Delphi type workshop is used to confirm the themes and projects. Some of the individual projects and their expected outcomes are also discussed. A questionnaire and interviews were used to collect data to select appropriate candidates responsible for leading these projects. Following an in-depth analysis of preliminary research results, some recommendations on the selection process will also be presented.

Entrepreneurship and family firms : growth and survival

Family businesses dominate in a majority of economies (Astrachan and Shanker, 2003; Chrisman, Chua, and Sharma, 2005; Morck and Yeung, 2004). As entrepreneurial activities have been shown to be central to economic growth it is essential that family businesses, irrespective of ownership patterns, not only survive but also grow thus growing the economy overall. While a great deal is known about entrepreneurial activities and a body of knowledge is being developed in relation to entrepreneurial processes in family firms, more needs to be understood in relation to the dynamics of entrepreneurial activities at the individual family firm level. One area of particular interest is the dynamics within the business and the family and how these dynamics impact upon entrepreneurial activities. Specifically how relationships between and among family members engaged in the business can interact with professional non-family member senior executives. The senior executives can actively use their positions in such ways that initiatives suggested by family members are less successful than they might be. This paper addresses how ‘family’ aspects of a business can assist or impede the entrepreneurial activities of individuals. It takes into account some of the unique features of family businesses – such as the importance of ‘familiness’ as a competitive advantage; the direct links between ownership and control of a business and the recognition (often implicit) that individuals in families do make a difference to how the business functions (Habbershon and Williams, 1999, Sharma, 2004; and Tokarczyk, Hansen Green, and Down, 2007). This emphasis on individuals in families fits well with the idea of entrepreneur as individual, as expressed by Schumpeter (1934), Baumol et al (2007). The theoretical approach that adopted to explore the dynamics of processes occurring within family firms is structuration theory combined with a theory of embeddeness (Dacin, Ventresca and Beal, 1999; Giddens, 1979, 1984, Jack and Anderson, 2002; and Sarason, Dean and Dillard, 2006).

Internal audit quality, audit committee independence, growth opportunities and firm performance

This study explores whether the relation between internal audit quality and firm performance is associated with firm characteristics of information asymmetry and uncertainty (growth opportunities) and certain governance controls (audit committee effectiveness). The results from this preliminary study of 60 Malaysian companies show that the association between internal audit quality and firm performance is stronger for firms with high growth opportunities and that this positive association is weakened by increasing audit committee independence. These findings demonstrate the internal auditors conflicting roles and question the governance recommendations that require all members of the audit committee to be non-executive directors.

Stakeholder impact analysis of infrastructure project management in developing countries : a study of perception of project managers in state-owned engineering firms in Vietnam

Construction projects can involve a diverse range of stakeholders and the success of the project depends very much on fulfilling their needs and expectations. It is important, therefore, to identify and recognize project stakeholders and develop a rigorous stakeholder management process. However, limited research has investigated the impact of stakeholders on construction projects in developing countries. A stakeholder impact analysis (SIA), based on an approach developed by Olander (2007), was adopted to investigate the stakeholders' impact on state-owned civil engineering projects in Vietnam. This involved the analysis of a questionnaire survey of 57 project managers to determine the relative importance of different stakeholders. The results show the client to have the highest level of impact on the projects, followed by project managers and the senior management of state-owned engineering firms. The SIA also provides suggestions to project managers in developing and evaluating the stakeholder management process.