Small business performance:business, strategy and owner-manager characteristics

Purpose: This paper aims to contribute to the understanding of the factors that influence small to medium-sized enterprise (SME) performance and particularly, growth. Design/methodology/approach: This paper utilises an original data set of 360 SMEs employing 5-249 people to run logit regression models of employment growth, turnover growth and profitability. The models include characteristics of the businesses, the owner-managers and their strategies. Findings: The results suggest that size and age of enterprise dominate performance and are more important than strategy and the entrepreneurial characteristics of the owner. Having a business plan was also found to be important. Research limitations/implications: The results contribute to the development of theoretical and knowledge bases, as well as offering results that will be of interest to research and policy communities. The results are limited to a single survey, using cross-sectional data. Practical implications: The findings have a bearing on business growth strategy for policy makers. The results suggest that policy measures that promote the take-up of business plans and are targeted at younger, larger-sized businesses may have the greatest impact in terms of helping to facilitate business growth. Originality/value: A novel feature of the models is the incorporation of entrepreneurial traits and whether there were any collaborative joint venture arrangements. © Emerald Group Publishing Limited.

Market orientation, innovation capability and business performance:insights from the global financial crisis

Purpose - The paper aims to examine the role of market orientation (MO) and innovation capability in determining business performance during an economic upturn and downturn. Design/methodology/approach - The data comprise two national-level surveys conducted in Finland in 2008, representing an economic boom, and in 2010 when the global economic crisis had hit the Finnish market. Partial least square path analysis is used to test the potential mediating effect of innovation capability on the relationship between MO and business performance during economic boom and bust. Findings - The results show that innovation capability fully mediates the performance effects of a MO during an economic upturn, whereas the mediation is only partial during a downturn. Innovation capability also mediates the relationship between a customer orientation and business performance during an upturn, whereas the mediating effect culminates in a competitor orientation during a downturn. Thus, the role of innovation capability as a mediator between the individual market-orientation components varies along the business cycle. Originality/value - This paper is one of the first studies that empirically examine the impact of the economic cycle on the relationship between strategic marketing concepts, such as MO or innovation capability, and the firm's business performance.

Goal orientation and its relationship to the business family, and family business performance, within the UK’s family owned and managed mid-sized businesses

Mid-Sized Businesses (MSBs) are defined by the Department for Business, Innovation and Skills (BIS) as having a sales turnover of between £25 million and £500 million. A key gap in family firm/business research and literature to date is, understanding the role and importance of non-financial objectives (such as family harmony, tradition and business longevity), and the role the family plays in creating a wide set of business performance objectives (both financial and non-financial) in these businesses. This dissertation contributes to filling this knowledge gap by drawing on Family Systems Theory applied in a business context, and within an overarching Resource Based View (RBV) of the firm.

Lean termelés és üzleti teljesítmény – nemzetközi empirikus eredmények (Lean production and business performance – international empirical results)

A lean termelés javít a vállalatok operatív teljesítményén. Korábbi kutatásokkal összhangban ezt nemzetközi kérdőíves felmérésből származó eredmények is alátámasztják. Nem mutatható ki azonban egyértelmű kapcsolat a lean termelés és az üzleti teljesítmény között. A szerzők kutatásukban – kifejezetten a több lean eszközt elmélyülten használó és jó operatív eredményekkel rendelkező ún. haladó lean termelők üzleti eredményeire fókuszálva – azonosították az üzleti teljesítményt befolyásoló tényezőket. Bár számos tényező kívül esik a termelésmenedzsment hatáskörén (pl. piaci dinamika, új piacra lépők száma, személyre szabás), de a termék/szolgáltatás arányának befolyásolásán, a beszállítók és a kapacitástartalékok menedzsmentjén keresztül a termelésnek is van lehetősége az üzleti teljesítmény javítására. Végül, bár közvetlen kapcsolat nem mutatható ki a lean termelés és az üzleti teljesítmény között, de a szerzők várakozásai szerint a folyamatosan javuló operatív teljesítmény kiegyensúlyozott és stabil üzleti teljesítmény alapja lehet. A haladó lean vállalatok pedig nagyobb eséllyel kerülhetnek (maradhatnak?) a jó üzleti teljesítménnyel büszkélkedő vállalatok körébe(n). ____________ The lean production has improved the operational performance of companies. However a clear link between lean production and business performance can not be detected. In their research the authors have identified the factors affecting business performance focusing on business results of the advanced lean producers. Although a direct connection is not detected between lean production and business performance, but according to the author expects the continuously improving operational performance shall be a base for the balanced and stable business performance.

A marketing, a termelés és a logisztika hozzájárulása a vállalati eredményességhez (The Contribution of Marketing, Production and Logistics to Business Performance)

A Budapesti Corvinus Egyetem Versenyképességkutató Központjának 2004-ben lekérdezett kérdőíve alapján, ami 154 feldolgozóipari vállalat adatait tartalmazza, azt vizsgáljuk, hogy az ellátási lánc három lényeges vállalati funkciója, a marketing, a termelés és a logisztika milyen mértékben járul hozzá az üzleti eredményességhez. Az eredmények szerint a marketingnek és a termelésnek erősebb hatása van a vállalati teljesítményre, mint a logisztikának. A három funkció együttesen csekély, bár statisztikai értelemben szignifikáns szerepet játszik az üzleti sikerben. _____ Companies are complex organizations where a lot of activities and processes have to work properly in order to reach success. Depending on several factors, sometimes some activities get more emphasis while others work in the background. Since organizational functions have separate literature and practical knowledge, and transit between them is rare, we do have very little knowledge on how the various functions together contribute to company success. Based on a wide-scale empirical study on Hungarian competitiveness, which includes data on 154 companies from the process industry, we examine to what extent three functions of the supply chain, marketing, manufacturing and logistics, can contribute to business success. Results show that marketing and manufacturing have larger effect on company performance than logistics. However, the three functions together play a minor, although significant role in company success.

Üzleti teljesítménymérés a sportban, - avagy miként segítheti a sportszervezetek vezetőit a Balanced Scorecard koncepció a stratégia szerinti működésben = Measuring Business Performance in Sports - How the Balanced Scorecard approach can help sports organisations in operating along strategic objectives

Napjainkban egyre nagyobb figyelem fordul a sporttevékenység társadalmi hasznosságára, ugyanakkor számos sportszervezet a túléléséért küzd. A legtöbb sportszervezetnél a sportteljesítmény mérése dominál, s viszonylag kevés figyelmet fordítanak az üzleti teljesítmény és az ezt befolyásoló tényezők mérésére, annak ellenére, hogy a vezetők tudatában vannak a sportteljesítmény és az üzleti teljesítmény kölcsönös összefüggésével. A sportteljesítményt a fogyasztói elégedettségen keresztül bevételre kell váltani, illetve biztosítani kell a finanszírozási forrásokat (gondolhatunk akár a játékosok fizetésére) a megfelelő sportteljesítmény eléréséhez. A sportszervezetek vezetőinek át kell látniuk a sportteljesítmény és az üzleti teljesítmény összefüggéseit, és azonosítaniuk kell a kritikus értékteremtő tényezőket. Ehhez adhat egy megfelelő gondolkodási keretet a Balanced Scorecard alkalmazása. Tanulmányunkban egy rövid áttekintést adunk a Balanced Scorecard alkalmazásának előnyeiről és kihívásairól a non-profit szervezetek esetében, majd egy magyarországi kézilabda klubnál készített esettanulmány segítségével megvizsgáljuk a BSC alkalmazási lehetőségét a sportkluboknál. _____ While performance measurement in the sport industry has a traditionally strong focus on sports results, commercial success of sports clubs needs to gain more ground. Sports results should generate market revenues, by satisfying customer needs, and allow continued investment in the further improvement of sports success (i.e. more funds for player transfers and wages). Club managers need to understand the complex relationship between on-field and off-the-field success, and identify critical success factors for achieving strategic objectives. The Balanced Scorecard approach provides a plausible framework for such analysis. Our paper explains the challenges of and opportunities for implementing a Balanced Scorecard system in non-profit organisations, and provides insights into its application in professional sport through an in-depth case study of a handball club in Hungary. We conclude by providing a model for managing sports organisations in line with strategic objectives, balancing out stakeholder expectations for both sports results and commercial success.

Üzleti teljesítménymérés a sportban = Business performance evaluation in sports associations

A sportszervezetek, sportvállalkozások esetében is kulcsfontosságú a teljesítménymérés. Annak ellenére, hogy a teljesítménymérés sok esetben elsősorban a sportteljesítményre koncentrál, egyre többen foglalkoznak az üzleti teljesítménymérés relevanciájával is. A nyugati társadalmakban a szűkös erőforrások és a növekvő társadalmi kontroll igénye erősíti ezt a folyamatot. A szakirodalom ezen a téren még viszonylag szűk körű. Jelen tanulmány célja, hogy egy olyan szakirodalmi áttekintést adjon, ami elindíthatja a jelenlegi és potenciális jövőbeli vezetők gondolkodását az üzleti teljesítménymérés fontosságának irányába. A tanulmány először áttekinti a pénzügyi teljesítménymérés lehetőségeit, foglalkozik a költségfelosztás problémakörével, kiemelt szerepet szán a stratégiai gondolkodás és a több szempontú megközelítés érvényesítésének. Részletesen összehasonlítja a sportszervezeteknél javasolt kiegyensúlyozott stratégiai mutatószámrendszer (BSC) adaptációkat. A tanulmány kiinduló pontot jelenthet nemcsak a szakirodalom feldolgozásához, de a gyakorlati megvalósításhoz is. _____ Performance measurement is crucial in sports associations. Although sports performance is in the spotlight, more and more researchers and experts deal with the business perspective of performance evaluation. This trend is strengthened by the scarcity of resources and a rising demand for social control in Western societies. The literature in this field is relatively limited. The aim of this study is to provide a literature review, which can motivate experts and managers to shift towards business thinking, and realize the importance of business performance evaluation. The study presents the opportunities of financial performance measurement, deals with the issues of cost allocation, and focuses on the role of strategic thinking and multi-dimension approach. Finally it compares the proposed balanced scorecard adaptations for sports associations. The study can be a starting point for literature review as well as for practical implementation.

Climate Clever Beef: options to improve business performance and reduce greenhouse gas emissions in northern Australia

The Rangeland Journal – Climate Clever Beef special issue examines options for the beef industry in northern Australia to contribute to the reduction in global greenhouse gas (GHG) emissions and to engage in the carbon economy. Relative to its gross value (A$5 billion), the northern beef industry is responsible for a sizable proportion of national reportable GHG emissions (8–10%) through enteric methane, savanna burning, vegetation clearing and land degradation. The industry occupies large areas of land and has the potential to impact the carbon cycle by sequestering carbon or reducing carbon loss. Furthermore, much of the industry is currently not achieving its productivity potential, which suggests that there are opportunities to improve the emissions intensity of beef production. Improving the industry’s GHG emissions performance is important for its environmental reputation and may benefit individual businesses through improved production efficiency and revenue from the carbon economy. The Climate Clever Beef initiative collaborated with beef businesses in six regions across northern Australia to better understand the links between GHG emissions and carbon stocks, land condition, herd productivity and profitability. The current performance of businesses was measured and alternate management options were identified and evaluated. Opportunities to participate in the carbon economy through the Australian Government’s Emissions Reduction Fund (ERF) were also assessed. The initiative achieved significant producer engagement and collaboration resulting in practice change by 78 people from 35 businesses, managing more than 1 272 000 ha and 132 000 cattle. Carbon farming opportunities were identified that could improve both business performance and emissions intensity. However, these opportunities were not without significant risks, trade-offs and limitations particularly in relation to business scale, and uncertainty in carbon price and the response of soil and vegetation carbon sequestration to management. This paper discusses opportunities for reducing emissions, improving emission intensity and carbon sequestration, and outlines the approach taken to achieve beef business engagement and practice change. The paper concludes with some considerations for policy makers.

E-business adoption and its impact on performance

Organizations today face intense competitive and economic pressures leading to large scale transformation of existing business operations and transactions. In addition, organizations have adopted automated business processes to deal with partners and customers. E-business diffusion is a multi-phase process, moving from initiation through to routinisation and an insight into the adoption processes helps organizations to adopt e-business more effectively. It is imperative that organizations effectively manage the e-business environment, and all associated changes to accommodate the changing relationships with customers and business partners and more importantly, to improve performance. This chapter discusses the process of e-business implementation, usage and diffusion (routinisation stage) on business performance. © 2010, IGI Global.

Marketing performance assessment systems and the business context

Purpose ‐ This study provides empirical evidence for the contextuality of marketing performance assessment (MPA) systems. It aims to introduce a taxonomical classification of MPA profiles based on the relative emphasis placed on different dimensions of marketing performance in different companies and business contexts. Design/methodology/approach ‐ The data used in this study (n=1,157) were collected using a web-based questionnaire, targeted to top managers in Finnish companies. Two multivariate data analysis techniques were used to address the research questions. First, dimensions of marketing performance underlying the current MPA systems were identified through factor analysis. Second, a taxonomy of different profiles of marketing performance measurement was created by clustering respondents based on the relative emphasis placed on the dimensions and characterizing them vis-á-vis contextual factors. Findings ‐ The study identifies nine broad dimensions of marketing performance that underlie the MPA systems in use and five MPA profiles typical of companies of varying sizes in varying industries, market life cycle stages, and competitive positions associated with varying levels of market orientation and business performance. The findings support the previously conceptual notion of contextuality in MPA and provide empirical evidence for the factors that affect MPA systems in practice. Originality/value ‐ The paper presents the first field study of current MPA systems focusing on combinations of metrics in use. The findings of the study provide empirical support for the contextuality of MPA and form a classification of existing contextual systems suitable for benchmarking purposes. Limited evidence for performance differences between MPA profiles is also provided.

Ownership identity, strategy and performance:business group affiliates versus independent firms in India

We consider whether the impact of entrepreneurial orientation on business performance is moderated by the company affiliation with business groups. Within business groups, we explore the trade-off between inter-firm insurance that enables risk-taking, and inefficient resource allocation. Risk-taking in group affiliated firms leads to higher performance, compared to independent firms, but the impact of proactivity is attenuated. Utilizing Indian data, we show that risk-taking may undermine rather than improve business performance, but this effect is not present in business groups. Proactivity enhances performance, but less so in business groups. Firms can also enhance performance by technological knowledge acquisition, but these effects are not significantly different for various ownership categories.

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.