MAY 2010 ISSUE (VOL 11, NO 2)
101 Introduction: a strategy for overcoming the definitional struggle
107 High-risk and low-risk cooperative exchanges and perceived benefits in formal business networks
119 Does size matter? Balancing power in dyadic cooperation relationships
129 The role of trust in new SME creation: differences in motivations and opportunities
141 Cooperative micro-firm strategies: leveraging resources through learning networks
151 The multidimensional form and role of trust in the small capitalization debt finance market
161 Case study: BrewDog: business growth for Punks!
169 Internet review: Cooperation and trust from SME networking
171 Book reviews:
- Mike Wright and Iris Vanaelst, eds, Entrepreneurial Teams and New Business Creation (reviewed by Carole Howorth)
- T. Mazzarol and S. Reboud, The Strategy of Small Firms: Strategic Management and Innovation in the Small Firm (reviewed by Steve Talbot)
- Alain Fayolle and Paula Kyrö, eds, The Dynamics Between Entrepreneurship, Environment and Education (reviewed by Anne M.J. Smith)
Title: High-risk and low-risk cooperative exchanges and perceived benefits in formal business networks
Abstract: In spite of the vast literature on the benefits of networks to business success, little is known about the impact of membership of traditional kinds of formal business networks. Using a relatively large sample of US industrial associations and community business networks, the authors examine the relationship between trust, two kinds of cooperative exchanges and perceived benefits from network membership. They test propositions from social capital and institutional theory regarding the role of structural and relational network features on trust levels. The findings reveal generally high levels of trust and moderate levels of low-risk cooperation, but low levels of high-risk cooperation and low reported benefits of membership. Support is provided for social capital theory. Network structural features are not related to trust, but may indirectly impact on it through relationships that are strongly associated with trust. This analysis suggests that networks may be advised to specialize in one or the other kind of cooperative exchange and obtain the corresponding benefits. Tailoring the types of cooperative exchange encouraged in a network to the benefits desired could make these traditional kinds of networks more useful as mechanisms for business success.
Title: Does size matter? Balancing power in dyadic cooperation relationships
Abstract: The authors examine the extent to which differences in dependency and power burden cooperative relationships between small and large companies. They also identify the consequences of the behaviour of the cooperation partners. For both small and large cooperation partners, the authors discuss various withdrawal and investment strategies as options for balancing dependency and power among the partners and they sketch possible development paths for such asymmetrical cooperation arrangements.
Title: The role of trust in new SME creation: differences in motivations and opportunities
Abstract: Small and medium-sized enterprises (SMEs) are key to economic growth, and yet comparatively little research has examined the relationship between the level of societal trust and the motivations and opportunities of entrepreneurs starting new SMEs. The author tests the impact of trust on new firm formation using the Global Entrepreneurship Monitor (GEM) survey data for 2001–2003. Trust is found to be significant for starting SMEs that pursue Schumpeterian opportunities. Trust is also significant for overall levels of entrepreneurship and for opportunity entrepreneurs in developing countries. These findings add nuance to previous literature suggesting that trust is significant for all forms of entrepreneurial activity.
Title: Cooperative micro-firm strategies: leveraging resources through learning networks
Abstract: Learning networks are highlighted in contemporary literature as a means of leveraging resources to create and sustain competitive advantage in micro-firms. Despite their importance in the context of micro-firm development, micro-firm learning, learning processes and networks have previously been neglected as an area of academic study, and there is limited evidence of successful cooperative strategies in this environment. The aim of the research discussed in this paper is to catalogue micro-firm learning criteria in a cooperative network environment and to propose a framework of cooperative learning for that milieu. Adopting an action research methodology, primary research was carried out on a Tourism Learning Network (TLN) initiative. Cooperative network activity and individual learning were observed and documented by the researchers over two years. Based on the research findings, the authors propose a framework of cooperative learning that offers insight into how network structures, support and interrelationships may facilitate learning process completion in the micro-firm environment.
Title: The multidimensional form and role of trust in the small capitalization debt finance market
Abstract: The authors use a trust perspective to highlight the parallels between agency and sociological discussions concerning relationships between banks and small firms. Using the trust typology developed by Lewicki and Bunker (1996), the authors explore how the length and breadth of the bank– firm relationship and the bank’s customer orientation influence three dimensions of a small firm’s trust in its bank. The paper also explores how bank managers’ trust orientations influence a small firm’s satisfaction with credit access. The authors test the theoretical framework empirically using a matched sample of 867 small firm executives and the bank managers who had direct responsibility for their accounts.
Title: Case study: BrewDog: business growth for Punks!
Abstract: This case study tells an atypical entrepreneurship story about two men and a dog. It explores the rapid growth of the phenomenon that is BrewDog plc – a company situated in the remote north-east of Scotland. What makes this case special is that the business, set up in 2007 by two university graduates in their early twenties with limited experience of the brewing industry, is now trading as a plc. From the outset they deliberately chose a strategy that flew in the face of accepted orthodoxy in the brewing industry. To industry experts, it made little sense because the remote Aberdeenshire town of Fraserburgh, with its peripheral location, would surely be the last place any rational individual would seek to start a new brewery. The story of how James Watt and Martin Dickie did so is uplifting and inspirational.
Title: Internet review: Cooperation and trust from SME networking
Abstract: ‘Internet Review’ provides critical commentaries on Web-based information on entrepreneurship, small business and innovation.
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