Journal of Small Business Strategy (archive only)
The Journal of Small Business Strategy publishes high-quality, applied research on topics related to entrepreneurship and small business. The Journal stresses strategy across all functional areas. ISSN 1085-8510 (Print) ISSN 2380-1751 (Online)
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Fostering Entrepreneurial Ecosystems and the Choice of Location for New Companies in Rural Areas – the Case of Germany
Startup ecosystems have become a popular field of research in recent years, not only for researchers but also for regional policy makers. Contemporary research on startup ecosystems generally focuses on urban areas and hubs such as Silicon Valley, Berlin, or Tel Aviv. However, little is known about startup ecosystems in rural areas. To fill this research gap, the research objective of this paper is to analyse disparities between entrepreneurial ecosystems in urban and rural areas in general and specifically in Germany. The major aim of this study is to examine the importance and development of startups in urban and rural areas and to identify challenges and opportunities for rural areas in order to set the right impulses. The research focus of this paper is to discuss which stakeholders and determinants affect the founders in their location decision. Using German Startup Monitor (DSM) 2019 data, it is found that the lack of network ties and opportunities to collaborate with established corporations; availability of qualified personnel; access to venture capital; an investment and economic policy initiative appear to be obstacles that prevent founders from starting up in rural areas in Germany. The results also confirm the findings of other studies that entrepreneurship tends to be an urban event. This study also provides suggestions for future research.
Copyright (c) 2021 Matthias Liedtke, Reza Asghari, Thomas Spengler http://creativecommons.org/licenses/by-nc-nd/4.0
The Value of Social Media Advertising Strategies on Tourist Behavior: A Game-Changer for Small Rural Businesses
Nature-based tourism represents a growing sector within the tourism industry, and these interests could help improve the conditions of economically disadvantaged rural communities. The new digital landscape, including Internet and social media usage, represents a critical strategic opportunity to inform, educate and reach these tourism segments. The present research examines the impact of social media advertising on nature-based tourism within rural communities. In this research, we utilize the COBRA (Consumers’ Online Brand-Related Activities) model (Muntinga et al., 2011) of consumer behavior to assess the impact social media advertising plays in generating Pre-Consumption, Consumption, Creation, Contribution, and Engagement in rural business. The results are significant, finding that incorporating digital strategies within rural firms is beneficial. According to our research, the careful placement of a social media advertisement can statistically increase engagement components by more than 50%. In theory, this can increase tourism and economic activity in these rural, economically disadvantaged areas.
Copyright (c) 2021 Nory B. Jones, Patti Miles, Tanya Beaulieu http://creativecommons.org/licenses/by-nc-nd/4.0
Why Small Deals Don’t Get Done: Evidence From Rural Entrepreneurs
For myriad reasons, rural entrepreneurs may want to harvest by selling their business. While these entrepreneurs may look for inspiration to larger, public deals, there are few relevant insights to glean from these deals. Despite the high stakes involved for rural entrepreneurs and potential buyers, researchers have placed little attention on dealmaking at the lower end of the spectrum. We address this lack of research by answering the research question: Why do deals involving small companies go unconsummated? Because research on why large deals fall through is sparse and of limited applicability, we ground our research using insights from the venture financing arena (venture capitalists and angel investors) about why deals between entrepreneurs and investors do not close successfully. Applying a novel dataset from an economic development effort in a small southwestern U.S. city, we analyze the reasons why an investor group investigated 20 potential small deals, but none eventually closed. We found that issues both with the potential buyers and sellers led to the deal failures, with issues involving the valuation and also the selling entrepreneur being the most common deal-breakers. Furthermore, through this investigation, we gained insights into the challenges of an investor-driven model for economic development.
Copyright (c) 2021 Jeff Stambaugh, Andy Yu http://creativecommons.org/licenses/by-nc-nd/4.0
Small Business Development Centers and Rural Entrepreneurial Development Strategies: Are We Doing Enough for Rural America?
Many states across the United States have significant rural populations, which typically face different sets of challenges than those closer to urban populations. This is particularly evident in the different types of opportunities that small businesses face in those rural areas. In recent years, various efforts - both at a national and local level - have been taken to increase those opportunities for rural small businesses. However, those efforts have not always produced the results that are envisioned. Utilizing information about Small Business Development Center (SBDC) strategies to serve small businesses in both rural and urban areas, we highlight the efforts that work to aid rural entrepreneurs as well as those that fall short.
Copyright (c) 2021 Timothy C. Dunne, Katie Toyoshima, Michael Byrd http://creativecommons.org/licenses/by-nc-nd/4.0
Flexing the Leadership Muscle: An International Study of Entrepreneurial Resilience in Rural Communities During the COVID-19 Pandemic
The COVID-19 global crisis and the ensuing lockdown of large parts of society and economic life has been an exogenous shock to society (Kuckertz et al., 2020). It is predicted the impact on the small business sector is likely to be severe (Fairlie, 2020). The findings of this international qualitative study offer a first-hand and real-time account of the adversity encountered by small rural businesses during the first lockdown in the COVID-19 pandemic and insight into how their leaders exercised resilience. Drawing upon the evidence from 38 small business entrepreneurs and four business support organizations, the data pointed out three main challenges in terms of adversity relating to business model change, information flow and sense-making, and weak strategy. The study also brings new insight into five leadership practices and behaviors that help exercise entrepreneurial resiliency: personal and business experience of crises, positive mindset, personal faith, learning and leading, and relationships.
Copyright (c) 2021 Karise Hutchinson, Rachael Fergie, Emma Fleck, Georgann Jouflas, Zen Parry http://creativecommons.org/licenses/by-nc-nd/4.0
Developing a Small Business Educational Program for Growing Rural Businesses
This paper elaborates on the development of a small business certificate program in rural Kansas. Researchers and local practitioners suggest that there are differences between rural and urban small businesses and that most educational programs do not account for these differences. After exploratory research, the university team identified specific needs facing local businesses and tailored a program for their needs. A program structure and set of topics, paired with faculty experts was developed and implemented. Topics focused on developing an entrepreneurial orientation, as well as certain business fundamentals that were deemed critical to small rural businesses. Each topic was oriented toward the rural context where face to face business is more essential. A feedback loop was implemented leading to a shorter 8-week timeframe and some topic adjustments. To date, 378 firms have participated in the program and have shown an 80% survival rate. Specific feedback has indicated that business growth has occurred and that the respondents do perceive development in their entrepreneurial orientation. In addition, specific skill areas related to unique businesses have been improved. Lastly, the program participants have grown their regional business networks, which has been shown to be an important factor for rural business success.
Copyright (c) 2021 Timothy L. Pett, John Francis, Wendy Veatch http://creativecommons.org/licenses/by-nc-nd/4.0
Lifestyle Entrepreneurship and Innovation in Rural Areas: The Case of Tourism Entrepreneurs
Lifestyle entrepreneurs play an important role in innovation and sustainability in rural destinations. Their competitiveness depends largely on how they explore their link to the place and generate innovation. To analyze the relationship between the link to the place and innovation, this article uses survey data from a sample of 221 rural lifestyle entrepreneurs. Using PLS-SEM modeling, the results indicate that place familiarity and relational capital positively influence innovation. Furthermore, place familiarity reveals as an important factor for improving relational capital. In its turn, the degree of relational capital contributes positively to the small firm’s knowledge absorption. The results also reveal that, although there is no direct relation between knowledge absorption and innovation, relational capital mediates the relationship between place familiarity and innovation and that there is an indirect relationship between relational capital and innovation, through the mediating effect of knowledge absorption. These results provides important elements for rural tourism destination decision making on innovation and competitiveness.
Copyright (c) 2021 Álvaro Dias, Graça M. Silva http://creativecommons.org/licenses/by-nc-nd/4.0
Rural Entrepreneurship Success Factors: An Empirical Investigation in an Emerging Market
Small businesses in rural communities play a key role in achieving global sustainable economic development because they are the driving force of poverty reduction, job creation, resiliency, and economic development. This study examines the factors that drive the success or failure of small businesses in rural communities in an emerging market. The methodology is survey interview research using a logistic regression model to test the Lussier success vs failure prediction model with a sample of 230 businesses (successful n = 120, failed n = 110) from the rural communities in an emerging market. This study supports the Lussier model validity (p < 0.01) with a high overall accuracy of 71% in predicting a venture as successful or failed. Capital, industry experience, staffing, and marketing skills are the most significant (t-values < .05) factors that distinguish successful from failed rural businesses in an emerging market. The findings can help future, and nascent rural entrepreneurs avoid failure and successfully contribute to economic development. Implications for government agencies, public regulatory bodies, financial institutions, investors, suppliers, educators, professional institutions, and society, as well as limitations and future research, are presented. This study also contributes to the international validity of the Lussier model that can be used in both advanced and developing economies, and it contributes to the development of theory.
Copyright (c) 2021 Prince Gyimah, Robert N. Lussier http://creativecommons.org/licenses/by-nc-nd/4.0
An Examination of Rural and Female-Led Firms: A Resource Approach
Previous studies in entrepreneurship research indicate that external funding is critical for entrepreneurial success and that spatial funding inequities between nascent rural and non-rural firms are ever-present. Moreover, women entrepreneurs, rural or otherwise, receive fewer external resources than their male counterparts. To our knowledge there has been no research leveraging the Panel Study of Entrepreneurial Dynamics (PSED), a representative dataset of American individuals trying to create new firms, to better understand differences between rural, non-rural and female-led firms in terms of their ability to stay engaged in the entrepreneurial process and to earn a profit. Using the resource-based theory of the firm, this research will begin to examine some of the critical factors driving rural firm success and rural female-led firm success. We utilize Cox and logistic regression models to analyze the time to quit, time to profit, and the likelihood of firm survival and profit generation for these firms. Results reveal that externally monitored funds are a significant variable for rural firm success in comparison to non-rural firms and appear to be especially important for women-led nascent firms early in the firm gestation process. Future research would benefit from further exploration of funding bias, entrepreneurial motivation and personal characteristics of rural, female-rural and their non-rural counterparts. This research adds to the literature on rural entrepreneurship by using the resource based theory of the firm in conjunction with the PSED database to study the nature of firm success and firm profit for rural and female led rural firms.
Copyright (c) 2021 Marcos Segantini, Lori A. Dickes http://creativecommons.org/licenses/by-nc-nd/4.0
An Overview of Rural Entrepreneurship and Future Directions
Prior research shows that rural entrepreneurship has its own distinct elements and deserves additional attention within the research community. The frameworks and methodologies from studies focused on high-growth and technology-based entrepreneurship are often used to explore rural entrepreneurial activities. This incongruence limits our understanding of the true impact entrepreneurship can have on rural communities. The articles in this special issue help advance our knowledge of rural entrepreneurship as a distinct field of study, and add to our understanding of its impact in the rural context. Additional research avenues are suggested.
Copyright (c) 2021 Dennis Barber III, Michael Harris, Jeffrey Jones http://creativecommons.org/licenses/by-nc-nd/4.0
Branding and reputation plays an important role in determining firm behaviour and outcomes. These well-known marketing concepts have attracted attention of family firm scholars as well. However, despite the significant growth in family firm literature over the last two decades, the application of marketing theories and concepts in family firm context is limited. Thus, there is an urgent need for a better understanding of reputation, branding, communication, and marketing perspectives in family firms. The goal of this special issue is to enhance our understanding of marketing strategies in family firms. This special issue features 5 articles that represents the work of 12 scholars from five different countries.
SI: Marketing strategies in family firms
Copyright (c) 2021 Manuel Alonso Dos Santos, Orlando Llanos Contreras, Raj V. Mahto http://creativecommons.org/licenses/by-nc-nd/4.0
Employees’ psychological characteristics and sustainable leadership in firms with high and low entrepreneurial orientation
In this article, we examine how individual-level psychological characteristics such as empowerment, integrity, humility, and need for cognition influence sustainable leadership behavior in firms with levels of high and low entrepreneurial orientation (EO). For this, we utilized fuzzy set qualitative comparative analysis (fsQCA) using data from 2,117 employees working in firms located and operating in different countries and diverse industries. Our results show that specific psychological characteristics possessed by the members of the organizations can be beneficial for engaging in entrepreneurial activity in both high and low EO firms. Our results e.g. show that need for cognition has a differential impact on sustainable leadership behavior in high and low EO firms. However, integrity is essential for a high level of sustainable leadership behavior in both high as well as low EO firms.
Copyright (c) 2021 Susanne Durst, Farzana Chowdhury, Andres Davila, Sascha Kraus, Cheng-Feng Cheng http://creativecommons.org/licenses/by-nc-nd/4.0
Understanding the failure of the replication of the Chinese economic reforms in India through the study of Gujarat RIS and Karnataka REE
India has failed to develop merchandise exports as China has. The Indian government is aware of this challenge and hence has created a specific plan for the industry called Plan 2025 to benchmark Chinese reforms. However, Plan 2025 fails to enhance the industry at this stage. This paper examines how some successful economic reforms in China did not have the desired impact in India. This paper shows that some key success factors of the Chinese experience have deliberately not been included in India ( absence of agglomeration effect with emerging neighbours, rent capture behaviour at a political level, same focus on IT & service instead of manufacturing from the SEZs, absence of upgrade to the current Chinese reforms). Still more significantly, there were policy mistakes. The Indian willingness to focus on knowledge generation for the manufacturing sector (as it has always done for IT & services) instead of on knowledge exploitation as China did, prevented India from using the backwardness advantage to obtain technology transfer and spillover to the rest of the economy. Therefore, this paper makes some recommendations for Indian policy-makers on how to improve the current flaws detected in the application of some Chinese economic reforms. As there is a need for state level analysis, the methodology consisted in comparing the past economic history and trajectories of two Indian States (Gujarat & Karnataka) with two Chinese Deltas (Yangtze River and Pearl River) using the approaches of the regional innovation systems (RIS) and the regional entrepreneurial ecosystems (REE).
Copyright (c) 2021 Tanguy Jacopin http://creativecommons.org/licenses/by-nc-nd/4.0
This study aims to understand the relationship that work-life balance and the perception of organizational support to work-life balance have with job embeddedness (construct that measures the reasons to remain in the organization) in the case of professionals belonging to Generation Y. A quantitative cross-sectional study was developed using instruments adapted from the literature. The sample consists of 211 members of generation Y with three or more years of work experience. The results of the analysis show that there is a positive relationship between work-life balance and job embeddedness in the sample of members of Generation Y. The study is relevant for both academic and professional aspects. The literature reviewed did not present a consensus on work-life balance and its relationship with job embeddedness; therefore the results help to understand this relationship. Likewise, this study focuses on work-life balance independently and not as the absence of conflict. In addition, in response to the demand from literature, young people from Generation Y have work experience in the sample. Considering work-life balance as a relevant factor generates the creation of organizational retention policies.
Copyright (c) 2021 Rosa María Fuchs Fuchs, Oswaldo Morales, Juan Timana http://creativecommons.org/licenses/by-nc-nd/4.0
Management practices and business labour productivity
This study examines the impact of management practices on business labour productivity, taking into account the externalities of intangible capital endowment of the country in which the firms are located. Management practices are also analysed to see which are more likely to explain productivity differences between firms. For this purpose, a sample of European firms from France, Germany, Greece, Portugal, Spain and the United Kingdom is used. Data of management practices comes from the World Management Survey. The main empirical results show that management practices have a strong positive and economically significant impact on the labour productivity of firms. Differences in the labour productivity of firms and therefore, of countries can be explained, in part, by differences in the score given for their management practices and by differences in local intangible capital endowment. Finally, incentives management and target setting prove to be the most relevant management practices in improving firms’ labour productivity.
Copyright (c) 2021 Paz Rico, Bernardí Cabrer-Borrás http://creativecommons.org/licenses/by-nc-nd/4.0
Experimenting a methodology to improve the entrepreneurial ecosystem through collaboration and digitalization
One of the weaknesses detected in the support system of entrepreneurial activity in several locations is its atomization. Thus, to solve it and gain efficiency, the agents, agencies and institutions related to this subject in Biscay started a joint project of strategic reflection in the beginning of 2018. Consequently, a collaborative public network, supported by a digital platform was formally created in June 2018. This paper aims to assess the development process of this public network. Based on the theory about Social Network Analysis and Network Effectiveness, we developed a set of indicators and used the obtained data from the technological platform used by the network. Currently, the network is still in its initial stage, but we have verified that it is working and the interaction among the agents has increased; thus, we can conclude that it is fulfilling the set cornerstones in its development. Our research is a longitudinal study, and our final target is to create a tool to monitor the development and measure its impact on the entrepreneurial ecosystem in Biscay. The network’s goal is to improve the support service for entrepreneurs in the province, enhancing the entrepreneurial conditions and having a positive impact on the entrepreneurial ecosystem. Because atomization is a common problem in several locations, the experience might be extended to other places with similar casuistic. We consider it as an original approach because it applies information technologies and social networks to public administration as well.
Copyright (c) 2021 Jokin Cearra, María Saiz http://creativecommons.org/licenses/by-nc-nd/4.0
E-learning in “innovation, creativity and entrepreneurship”: Exploring the new opportunities and challenges of technologies
Companies and society demand professionals be able to provide creative solutions with added value as well as to implement them in order to face the arising challenges in the increasingly dynamic environment. Although the transversal competence “Innovation, Creativity and Entrepreneurship” is essential for engineers that should find innovative solutions to problems, teachers find many difficulties when training and evaluating their students in the scope of the regular courses: large groups, very adjusted time to technical contents. In this context, the School of Industrial Engineering (ETSII) at Polytechnic University of Valencia (UPV) is aware of the opportunities offered by new information and communication technologies to support teachers in this task while enhancing students’ generic outcomes. For this reason, an e-learning platform has been created on this competence, that offers valuable resources to students to implement this competence throughout the assigned course tasks, and supports teachers prompted to train and evaluate this transversal competence. With this platform, the authors aim to contribute to the still neglected educational aspect of entrepreneurship and address for the first time in an e-learning system its relationship with innovation and creativity.
Copyright (c) 2021 María M. E. Alemany, Ana Vallés Lluch, José F. Villanueva Lópe, Jorge García-Serra García http://creativecommons.org/licenses/by-nc-nd/4.0
The relationship of consumer ethnocentrism, purchase intention, and lifestyle in first-generation bicultural ethnic groups
The study analyzed consumer ethnocentrism’s relationship in the first generation Colombian-Canadian bicultural ethnic consumer with purchase intention and lifestyle. One hundred and fifty-eight personal surveys were conducted in Toronto, Canada. It found that ethnocentrism positively influenced the perceptions of Canadian products compared to Colombian products. However, lifestyle was not significantly related to purchase intention. These findings motivate companies to identify their bicultural consumers who may favor products of the host country over most foreign products. It is possible that individuals who incorporate dual ethnic identities can move away from one value system and adopt another; thus, more empirical evidence on the behavior of this type of consumer must be provided, mainly when multinationals compete among one another rather than with their national rivals, with the concept of country of origin being highlighted. Consequently, organizations should know how affiliation with the host country may positively affect on purchase intentions concerning the country of origin.
Copyright (c) 2021 Iliana E. Aguilar-Rodríguez, Leopoldo G. Arias-Bolzmann http://creativecommons.org/licenses/by-nc-nd/4.0
Universal Basic Income in the Spanish construction sector: Engaging businesses in a public-policy debate
Universal Basic Income (UBI) is receiving increasing attention as a policy alternative, both from academia and the general public, because its implementation would open the window for a systemic questioning of our current “social contract”. However, the body of evidence for or against UBI is still insufficiently developed, especially when concerning changes at the system level – a scale at which it has never been implemented anywhere in the world. At this scale, labour market dynamics and the behaviour of different economic agents, such as businesses, take on particular relevance.Our main research objective is to investigate shared beliefs and opinions among business managers about UBI, about its impact at the system level, and, more specifically on labour market supply and demand. In order to achieve this objective, we conducted a focus group session involving managers from the construction sector in Spain, a country whose demographics, unemployment rate, productivity and public expenditure make this policy plausible.The target group showed little understanding of UBI, as well as other welfare policies, and demonstrated a dominant position against such a proposal. Our main findings show that most companies “live day-to-day” and do not undertake a structured analysis of such radical horizons but rather concentrate on incremental adaptations, even if they are worried about the need to increase productivity as a condition for survival – of both companies and the welfare system. We suggest that, in order to address this stakeholder group, communication around UBI should stress its potential to simplify bureaucracy and lead to significant savings. The results of this study can be used to inform policy design processes around UBI.
Copyright (c) 2021 Víctor Gómez-Frías, Teresa Sánchez-Chaparro, Daniel Maeso-Álvarez, Jesús Salgado-Criado http://creativecommons.org/licenses/by-nc-nd/4.0
Headquarters location decisions under conflicts at home: Evidence from a configurational analysis
This study identifies the necessary and sufficient conditions to relocate firms’ headquarters (HQ) under circumstances of high political and economic risk (the illegal referendum of Catalonia in 2017). One of the most promising advances in the discussion of relocation decisions lies in combining non-economic conditions with traditional production factors. We use fsQCA methodology to test the model. QCA is a method based on set theory in which the outcome depends on combinations of elements, that have the nonlinear property and permits that certain conditions act in opposite ways under different circumstances. Using a database of 42 companies of different sectors, 28 of them that maintained HQ and 14 that relocated, the study provides evidence that family firms under similar circumstances may make decisions to stay or relocate as a function of the origin of the founders and the production factors of the relocation region. Second, we found that relocation decisions of subsidiaries under political and economic uncertainty are not affected by economic factors and there is inertia in their behavior.
Copyright (c) 2021 Mariano Méndez-Suárez http://creativecommons.org/licenses/by-nc-nd/4.0
Industry impact on GDP growth in developed countries under R&D investment conditions
The impact of industry on GDP growth is widely discussed in light of the industrial revolution that arose as the first wave of innovations and has since been a common subject of theoretical and empirical research papers. However, the issue of R&D investment, industrial structure and the impact on GDP growth is still under discussion and requires much deeper investigation under conditions of globalization. The results of this paper supported the hypotheses that growth of the industry share in gross value added has a higher impact on GDP growth in well-developed industrialized countries with high GDP per capita than in industrialized countries whose GDP per capita is at a lower level under business-financed R&D investment conditions. In addition, the multiplier effect of business-financed R&D investment and its impact on economic growth depend on the economic development level of a given industrialized country. The proposed hypotheses suggest that policy makers of less-developed countries should pay more attention to enhancing the quality of industry by introducing appropriate incentives rather than to increasing the share of industry in GDP, with a particular focus on the best practices of well-developed industrialized countries.
Copyright (c) 2021 R?ta Banelien? http://creativecommons.org/licenses/by-nc-nd/4.0
Entrepreneurial mindset: Examining the contribution of deliberative and implemental mindsets to SME internationalization
The purpose of this study was to establish the contribution of deliberative mindset and implemental mindset to SME (small and medium enterprises) internationalization. This study employed cross-sectional and correlational research designs. Data were collected through a questionnaire survey of exporting SME owners and managers. Data was analyzed with the help of Statistical Package for Social Sciences (SPSS) and SmartPLS. Results suggest that implemental mindset significantly contributes to variances in SME internationalization unlike deliberative mindset. The findings in this study imply that increased levels of internationalization among SMEs in a developing country like Uganda can be achieved by those managers and owners who possess an implemental mindset. This study provides initial empirical evidence of the contribution of deliberative and implemental mindsets to SME internationalization using evidence from Uganda – a developing country.
Copyright (c) 2021 Godwin Mwesigye Ahimbisibwe, Joseph Mpeera Ntayi, Muhammed Ngoma, Geoffery Bakunda, John C Munene, Timothy Esemu http://creativecommons.org/licenses/by-nc-nd/4.0
Entrepreneurial passion: A systematic review and research opportunities
In this paper, we conduct a systematic review on the topic of entrepreneurial passion. We summarize the empirical findings of studies based on the four major conceptualizations of passion: passion for work, the dualistic model of passion, entrepreneurial passion, and perceived passion. Moreover, we analyze 63 published papers in the literature and identify potential research opportunities in this area. First, research on the relationship between entrepreneurial passion and firm performance needs further examination; we need comprehensive and more nuanced studies on this relationship, focusing on diverse types of passion. Second, distinctive mechanisms based on different types of passion would enhance our understanding of how passion influences firm performance and other outcomes. Third, it is essential that future studies carefully match theoretical arguments and measurements, based on the frameworks of passion. Fourth, scholars should conduct empirical research on entrepreneurial passion in various cultural contexts. Fifth, theoretical justifications and contextual appropriateness for each framework of passion are critical to advance the literature. Lastly, scholars need to utilize unified terminologies of passion.
Copyright (c) 2021 Younggeun Lee, Pol Herrmann http://creativecommons.org/licenses/by-nc-nd/4.0
Inter-firm marketing collaboration in family businesses: The role of risk aversion
Family businesses show low participation in inter-organizational collaborations. Inter-firm collaborations are activities in which companies seek to access resources and develop capabilities that they cannot achieve on their own. While there is empirical evidence that family businesses show a high level of risk aversion, some studies have shown the opposite. Further, research on this topic has focused mainly on economic and financial decisions, but few studies explore family business attitudes toward risk in non-financial decisions, such as marketing collaborations. Using a bivariate probit model in a sample of 1,118 Chilean family firms, we analyzed the extent to which the degree of risk aversion influences the probability of family firms participating in marketing collaborations with other firms and on the probability of cooperating with firms with which the family firm has had previous business experience. We found that although most conservative family firms are reluctant to take risks when entering a collaborative relationship, they are willing to take risks when engaging with partners with whom they have not had a previous relationship. The findings expand on research regarding family businesses’ attitudes toward risk, relative to strategic non-financial decisions, and the theoretical development of their collaborative marketing visions.
Copyright (c) 2021 María J. Ibáñez http://creativecommons.org/licenses/by-nc-nd/4.0
Reputation and identity in family firms: Current state and gaps for future research.
Research surrounding the strategic value of the reputation and identity of a family firm is still an incipient topic and there is not absolute clarity about the response the different interest groups could have when these elements are communicated to them. Starting from a systematic review of the literature of Web of Science, 56 articles published between 2000 and 2020 were analyzed. The results show a growing number of articles based on the reputation and transmission of the family identity of firms. The cites in this articles have also shown important growth, confirming the relevance this topic has had. This work provides a review of the current state and evolution of the literature surrounding this topic, discusses the different lines of research related to the reputation and transfer of family identity, and finally identifies gaps in the research that can orient the development of future work.
Copyright (c) 2021 Jonathan Cuevas Lizama, Orlando Llanos Contreras, Manuel Alonso Dos Santos http://creativecommons.org/licenses/by-nc-nd/4.0
Customer perceptions about family firms and their effects on customer behaviors
The current is an exploratory project exploring the associations and impressions evoked by the term “family-owned business” (FOBs) and how these impressions affect intentions to buy from a family firm. Four studies were conducted to assess the perceptions about family firms. Based on signaling theory and the theory of reason action, it was predicted that the family nature of firms would act as a signal that consumers will use to determine perceptions, attitudes towards family firms, and intentions to buy from family firms. Results indicate that, in general, participants had positive perceptions about organizational values and neutral perceptions about products and services offered by family firms. As suggested by the Theory of Reasoned Action, these perceptions affected attitudes and intentions towards FOBs. Implications for theory and practice are discussed.
Copyright (c) 2021 Isabel C. Botero, Shanan R Litchfield-Moore http://creativecommons.org/licenses/by-nc-nd/4.0
Evaluation of the online presence of family firms: A comparative analysis between Ibero-America and the US
Digital marketing strategies are an intermediary between marketing channels and communication of information. With the emergence of web 2.0, corporate websites’ have become the epicentre of digital marketing strategies. This study aims to fill a gap in the family business literature related to online presence and their differences between regions. Using structural equation modeling (SEM), the websites of the largest Ibero-American and American family businesses in the world (which were included in the Family Business Global Index (FBGI)) were examined by evaluating their content, form and function, as well as their presence in social networks. A multigroup analysis was used to compare the results in Ibero-America and America. One of the main results is that there is a negative relationship between website quality and a company’s turnover and a positive relationship between social networks and a company’s turnover. Regarding multigroup analysis, there are no significant differences among the family firms of the two regions with respect to the online presence. This study has relevant practical implications because it highlights the importance of a global strategy of online presence since it influences the company’s turnover.
Copyright (c) 2021 Óscar R. González-López, Maria Buenadicha-Mateos, Ascensión Barroso, Ramón Sanguino http://creativecommons.org/licenses/by-nc-nd/4.0
Personalized service and brand equity in family business: A dyadic investigation
Family business owners are crucial in building personal relationships with customers and in supporting marketing strategies that aim to develop brand equity for the firm. Through the lenses of job demands-resources theory, this research examines how family business owners’ time in servicing customers produces a chain of positive and negative effects that ultimately impacts brand equity. Because family businesses depend heavily on owners’ motivation and ability to multitask, their effort in dedicating time to serve consumers is limited and is expected to produce work overload. This burden harms the effectiveness in delivering personalized services to customers. However, if family businesses nurture expressions of citizenship behaviors in employees, the negative effect of work overload on delivering personalized services is reduced. Therefore, collective organizational citizenship behavior will act as a buffer to limit the negative effects of owners’ job demands in delivering a personalized service. Collective organizational citizenship behavior is capable of energizing everyone in the family business, including family business owners, for them to continue to service customers in a personalized way, and at the same time develop brand equity. Implications for family business strategies are discussed based on our findings.
Copyright (c) 2021 Franklin Velasco Vizcaino, Cintya Lanchimba, Orlando Llanos Contreras, Manuel Alonso Dos Santos http://creativecommons.org/licenses/by-nc-nd/4.0
Innovation as competitiveness driving force through the resources and capacities of SMEs in Costa Rica, Puerto Rico, and Dominican Republic
Literature reflects that Latin America and the Caribbean register more SMEs and produce more entrepreneurial activity than any other place in the world. Using the Theory of Resources and Capabilities, this research explored how SMEs in Costa Rica, Puerto Rico, and the Dominican Republic managed the heterogeneity of their entrepreneurial orientation, market orientation, social and human capital resources and their impact on innovation capacity and competitiveness. With a survey of 467 SMEs and the analysis of data with the use of PLS-SEM & PLS-MGA, this study contributed new information based on resources and capacities that showed the maximum set of possible variables analyzed for a theoretical understanding and practice of the heterogeneity of resources. The results reflected a positive impact on the proposed hypothesis through the structural model. The data highlight market orientation as the most valuable resource that facilitates innovation and competitiveness in SMEs analyzed. The results revealed and contributed to the new lines of research on how differences and the degree of importance in managing resources generated high competitiveness through their capacity for innovation.
Copyright (c) 2021 Ulises Mendez-Vega, Glenda Muñiz-Umana, Jose A Flecha-Ortiz, Maria Santos-Corrada http://creativecommons.org/licenses/by-nc-nd/4.0
Strategic agility in the SME: Use it before you lose it
This empirical study investigates strategic agility and its relationships with firm age, firm size, and firm performance in SMEs. The Doz and Kosonen three-factor model of strategic agility is operationalized and tested in 30 firms from multiple industries located in the Space Coast region of Florida. It is found that strategic agility decreases as firms grow older but not as firms grow larger. Strategic agility and firm performance are also found to be related as moderated by environmental turbulence. Specifically, performance increases with strategic agility in high turbulence but decreases with strategic agility in low turbulence. This finding is consistent with the view that dynamic capabilities like strategic agility bear a cost which may be unnecessary in stable environments. Overall, the study suggests that SMEs may benefit from strategic agility if it used while they still have it, that is, when they are young.
Copyright (c) 2021 Jonathan Reed http://creativecommons.org/licenses/by-nc-nd/4.0