Scott L. Newbert - Small Business in a Global Economy: Creating and Managing Successful Organizations

Small Business in a Global Economy

Small Business in a Global Economy

Creating and Managing Successful Organizations

Volume 1

Scott L. Newbert, Editor

Copyright 2015 ABC-CLIO, LLC

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, except for the inclusion of brief quotations in a review, without prior permission in writing from the publisher.

Library of Congress Cataloging-in-Publication Data

Small business in a global economy : creating and managing successful organizations / Scott L. Newbert, editor.

volumes cm

Includes bibliographical references.

ISBN 978-1-4408-3015-0 (print : alk. paper) ISBN 978-1-4408-3016-7 (e-book) 1. Small business. 2. Small businessManagement. I. Newbert, Scott L.

HD2341.S5727 2015

658.02'2dc23 2014035888

ISBN: 978-1-4408-3015-0

EISBN: 978-1-4408-3016-7

19 18 17 16 15 1 2 3 4 5

This book is also available on the World Wide Web as an eBook.

Visit www.abc-clio.com for details.

Praeger

An Imprint of ABC-CLIO, LLC

ABC-CLIO, LLC

130 Cremona Drive, P.O. Box 1911

Santa Barbara, California 93116-1911

This book is printed on acid-free paper

Manufactured in the United States of America

Contents

This two-volume set takes an ambitious agenda by seeking to provide a holistic source of information to scholars, students, practitioners, and policy makers interested in understanding the behavior and decision-making of owners and managers of small businesses; the operational and strategic challenges they face and the strategies they implement in response to them; the environmental constraints on their businesses ability to emerge, grow, and survive; and the role their businesses play in the larger economy. As idiosyncratic as the small businesses that they investigate, the chapters in this set represent an intentionally eclectic mix of styles, approaches, and contexts in the hopes of triangulating on what is known about the challenges and opportunities faced by would-be and practicing small business owners and managers. As the chapter authors include leading small business researchers from across the globe, each topic is explored in rigorous, scholarly fashion; thus, due attention is given to breadth and depth.

The two volumes view small business through distinct lenses. Volume 1 takes a somewhat microview of the small business phenomenon, focusing mainly on the small business owner. To set the stage for the chapters to follow, this volume begins by assessing the impact of the small business sector on the economic landscape. With the importance of small business established, this volume then proceeds to analyze issues pertaining to the creation and ownership of small businesses of various types. In so doing, it seeks to answer such questions as why and how do individuals seek to start small businesses and how is this decision influenced by characteristics of the owner(s)? This volume then investigates how, once the decision is made to start a small business, the focal opportunity is identified and exploited. Broad questions answered in this vein of research include: how do would-be small business owners navigate their environments in the pursuit of the resources needed to create their businesses, and how does the timing of those actions matter?

Volume 2 widens the level of analysis by viewing the small business phenomenon from both a mesolevel and macrolevel perspective, focusing on both the operational concerns of and the environmental factors impacting small business. Volume 2 begins by exploring the effectiveness of a variety of strategies used by small business owners, answering questions such as how can small business owners successfully manage stakeholders, exploit technological capabilities, leverage networks, implement human resource systems, internationalize, balance economic and social goals, and exit the market? Volume 2 concludes by investigating the various contexts that affect and are affected by small businesses. In so doing, these chapters seek answers to questions that include, to what extent are small businesses influenced by the geographic, institutional, and political environments in which they operate?

Ultimately, this two-volume set is intended to serve as a window into the various and unique dynamics that unfold in small businesses. Thus, it is my hope that multiple constituencies may benefit from its contents, each in their own way. In particular, students may gain a better appreciation of the importance and vitality of the small businesses sector and, in turn, consider careers either as owners or managers of small businesses or as academics who study them. These volumes may also expose current scholars to new theoretical and empirical relationships that will spur their thinking toward proposing and seeking answers to new research questions. Current and would-be owners and managers of small businesses may gain new insights into the internal and external constraints facing their businesses as well as the strategies with which they may respond to them. Finally, the chapters in this set may broaden policy makers understanding of how extant regulations impact small businesses and facilitate the consideration and development of new programs that may support and promote the small business sector. Given the substantive contributions that small businesses have made throughout history, and continue to make to this day, to virtually every economy on earth, to the extent that this two-volume set achieves the above objectives it may contribute in some small way to global prosperity.

ACKNOWLEDGMENTS

This work could not have come to fruition without the help of many people who deserve special recognition. First and foremost, I would like to thank each of the authors included in these volumes for preparing chapters that seek to provide thoughtful answers to important questions concerning small business. I would also like to thank Mike Maiale for his extensive copyediting assistance. Finally, I would like to thank Harry Halloran for his financial support of this project.

Life for the small business owner is not easy. Because small businesses tend to lack the breadth and depth of resources held by and the perceived legitimacy of their larger counterparts, small businesses often find it difficult to raise the capital needed to survive and grow, manage the administrative responsibilities that result from navigating complex regulatory environments, and compete for labor against businesses with robust internal labor markets and greater opportunities for advancement. As a result, although megacorporations tend to get the lions share of attention in the popular press, small businesses play an important, albeit often underreported, role in global economic health and development.

Yet, given the abovementioned challenges facing small businesses, why do individuals continue to create and manage them? It would seem at first glance that individuals would be better off working for large, established firms instead, as they provide greater stability and opportunity. However, such a view ignores at least two factors. First, it ignores the intrinsic benefits that business ownership provides. In addition to the rationally oriented external benefits that result from work, individuals are also motivated to achieve goals that provide internal meaning and validation, which often do not and cannot result from wage employment. Thus, a worthy endeavor entails exploring the psychology behind small business ownership. Second, it ignores the ingenuity of small business owners. Even Schumpeter, widely acclaimed as one of the greatest economic thinkers of the 20th century, did not predict the ongoing vitality of small businesses. Indeed, we are a long way from the socialist order resulting from the efficiencies of large-scale innovation that he envisioned. Thus, a second avenue worthy of intellectual investigation includes how the individuals choosing to work for small businesses have been able to accumulate and allocate resources to identify and exploit opportunities when the deck is seemingly stacked so heavily against them.