MANAGING SMALL BUSINESS

Managing Small Business

Managing Small Business

Introduction

The primary aim of this paper is double pronged: first to proffer the benefits of an “organisational learning” perspective to the enhancing of understanding of small firm strategic development; and second, to propound that the concept of the “learning organisation” as currently debated may be substantially at odds with the characteristics and operating features of the small business.

The paper commences by drawing upon personal construct theory (Kelly, 1955) to first demonstrate the complexity of the small firm management task and to then provide the foundations for the development of a theoretical framework of the small business strategic learning process. The build up of the framework is underpinned by a multi-dimensional insight into organisational strategy formation and development derived from the various schools of thought constituting the strategic management literature. The essentially large company orientation of this literature is highlighted and addressed by grounding the insight provided by that literature in an understanding of the distinctive managerial and behavioural features of the small firm built out of the emerging small business literature.

The theoretical propositions underpinning the framework are supported with empirical insight from the real world of small business practice to demonstrate the role of organisational learning in the small firm strategic control of its unpredictable external operating environment.

Theoretical foundations

Demonstrating the complexity of the small business learning and management task

That the international operating environment in which small business must strive to develop is subject to relentless change is by now well-documented. Considerable attention is devoted to communicating how a substantial restructuring of the world economy is unfolding in terms of political, economic, technological and social changes. Development processes, it is emphasised, are culminating in a “truly global market place” and underlying change forces will manifest continuous transformation of that market place exerting relentless demands on business organisations to incessantly seek out solutions in order to maintain competitiveness (see Kinsey Goman, 1994).

It is, however, becoming too easy to conceptualise tritely the external operating context of the small business as dynamic, fast changing and increasingly complex, as a stage upon which the small firm owner-management must perform by identifying relevant change issues and seizing underlying opportunity. It is not that such a conceptualisation is wrong, but rather that discourse can tend to proceed at a level of superficiality which fails to capture the real degree of complexity associated with the small business management and learning processes necessary to identify, understand and act upon much of the change situations with which the contemporary business organisation must cope. In developing the theoretical foundations of our research we draw upon Stacey's (1990) categorisation of different change situations which begins to reveal in more depth the level of difficulty facing contemporary business striving to cope with a hostile change environment. Such a categorisation distinguishes between closed-change situations whereby the timing and consequence of events can be predicted in the short-run; contained change whereby repetitions of the past provide the foundations for projection and can be underpinned by statistical ...