Abstract
Scott Newbert’s new book collects and updates thinking on small firms. As the initial chapter attests, small businesses have been a major sector of the global economy for decades. Still, small businesses face new challenges from the forces of globalization and technological advance, both of which are addressed in the book. Small business is also a young and dynamic enough field that knowledge is spread widely across academic journals, leaving scholarship difficult to access. In such cases, comprehensive books such as this can play an important role. In terms of content, it aims to be catholic and comprehensive. Comprising two volumes, divided into three sections, Volume 1 focuses on micro (owner/founder) aspects, while Volume 2 covers meso (firm) and macro level (external environment) topics.
The book aims to appeal to students, scholars, practitioners, and policy makers by offering insights of scholars into a variety of issues. It succeeds by using clear and succinct writing with a tone that suits such a diverse group. As an exemplar, Tornikoski, Gerbasi, and Molecke’s chapter on networks offers useful insights for researchers but would also be an excellent primer on Social Network Analysis for an entrepreneur or student without the inclination to study the academic literature.
The books contain 25 articles, using a range of management theories. For example, Craig and Moores introduce a framework for analyzing family businesses, A-GES, referencing Systems Theory, Agency Theory, and the Resource-Based View. Volume 1 includes two articles using Institutional Theory: Anderson, Kreiser and Weaver’s study of political and economic factors, and Lesfrud and Jennings’ discussion of entrepreneurial storytelling. The latter is an excellent example of using academic literature while speaking directly to practitioners. It includes both a future research section and a practical discussion of storytelling tactics. Institutional Theory appears in the second volume, too. LiPuma and Prange write of how different institutional environments between emerging and developed countries impact the exporting practices of small firms, using data from a World Bank survey. Country specific work is seen in Anderson, Kreiser and Weaver’s study of Entrepreneurial Orientation of nine countries along with several other chapters in both volumes. US policy toward small business, for example, is reviewed by Dennis. He looks beyond Small Business Administration offerings to examine numerous programs, including a timely discussion of the Affordable Care Act.
Dennis’ chapter also includes a typology of impediments and supports for small firms, one of several typologies or models in the book. Lesfrud and Jennings’ discussion of storytelling also proposes a typology. Models are suggested by Levesque on market entry decisions, Armstrong on resourcefulness (who can resist a title such as ‘Thinking Like MacGyver’?), and Gilbert and Tatum Kusar on the impact of geographic cluster regions on innovation.
A total of 11 chapters include empirical work, such as Patel’s study of High Performance Work Systems (HPWS). Interestingly, given other work in the volumes around geographic and institutional differences, he finds that Eastern cultural values may increase the impact of HPWS on productivity. Clark and Newbert study top management team (TMT) networks and extend existing scholarship to small firms, finding that TMT networks improve the ability to innovate in small firms, although they are more difficult for small firms to establish. Gras, Lumpkin, and Nason undertake a longitudinal analysis of social entrepreneurs. They find that social entrepreneurs, balancing both social and financial needs, are often driven to change their strategic focus.
In the era of disruptive innovation and perhaps even the end of competitive advantage itself (McGrath, 2013), any comprehensive study of small firms must cover innovation, opportunity, and the impact of technology. These volumes contain several such chapters, including Matthews, Schenkel and Yates’ discussion of whether opportunities are discovered or created. Tribble, Drnevich and Ha write an overview of technology and innovation in small firms, offering a broad view of technology while applying ideas such as absorptive capacity and firm capabilities. The macro section includes a chapter by Chavez, Linton, Stinnett and Walsh on the commercialization of new technologies. They discuss policy prescriptions and suggest small firms use their ‘Strategic Technology Firm Fit Audit’. This tool could be useful for both managers and researchers.
There is considerable breadth in these volumes. Still, they are cohesive and their voice is consistent. The chapters are readable and generally concise. While they are academic in style, most also bridge the gap between theory and practice effectively.
A few areas could have used additional time. Given the dominance of many large firms, an exploration of operating in niches would be useful. In a related vein, more could have been said about growing a small firm into a big firm – surely the goal of many of these firms. Tribble, Drnevich and Ha do note that innovation is the key to both finding niches and scaling, and Matthew, Shenkel and Yates contrast small firms expecting to remain as such versus those seeking scalable opportunities, but with regard to founder attributes, as opposed to how firms can scale. Some of this weakness stems from the origins of management scholarship. For example, Carter, Alsos and Ljunggren describe the non-financial rewards that accrue to small business owners, but focus on autonomy and task completion – items driven by research in traditional firms. They do not mention satisfaction stemming from growth, creating jobs or building a large enterprise, which surely are important to small firm founders.
Even so, these well written volumes will be useful and of interest to anyone involved in studying, teaching, or engaging in the work of small firms.