Thursday
Jul 24th
| Growth without manpower - the secret of success |
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| Written by Professor Peter Wyer | ||||||
Page 1 of 4 (Adapted for LeadSure by Professor Peter Wyer from an original paper published by him in the Journal ‘Making Electronic Commerce Work’) Potential Advantages Associated with Smallness of Operation It can be argued that, whilst small businesses suffer from severe resource and ability limitations vis-à-vis large companies, smallness of operation can nevertheless bestow significant advantages not available to the larger organisation. For example, small businesses can benefit from the by-passing of internal red tape and bureaucracy normally associated with large departmentalised companies. Smallness of operation can result in closeness to customers and offer the opportunity for the owner manager to develop close relationships with his or her customer base and build detailed understanding of product or service requirements. A relatively small employee base can result in a close-knit social unit of workforce and sound interaction between management and worker. Moreover, many small businesses are community-based which can provide access to information networks as sources of learning input. And smaller firms may be susceptible to fewer impacting external change forces since, for example, they have lower levels of customers, deal with fewer suppliers and have a narrower focus of core markets and product activities. In operational terms, if owner managers can seize and exploit such ‘advantages of smallness’ key development benefits can be worked up in terms of closeness to external operating environment, fast managerial responsiveness to emerging opportunities, relative ease of decision-making and flexibility in serving existing and new customer bases. The Small Business as a Potential Unique Problem-type There is, however, a need to treat such propounded size benefits as potential advantages, not absolute. Smallness of operation also brings with it potential development problems that can derive from two key sources: owner manager-related characteristics and size-related characteristics. For example, whilst it is the owner manager who sits as key pivotal individual and the driving force of small business development, quite often owner manager values, attitudes, motivations and abilities can act in a constraining manner. For instance, owner manager values of autonomy and independence sometimes constrain the use of external expertise or finance to underpin development. Moreover, the very nature of a growing business brings new issues, opportunities, management tasks and problems: here the business can quickly outgrow the owner manager ability base. Size-related problems include finance, marketing and people management issues. For example, in the absence of requisite levels of collateral and/or a sound profit track record, many small firms face difficulties in raising reasonable cost finance. Within a marketing context, some small businesses find it difficult to access relevant market information or to gain entry to established distribution channels. For some small firms difficulties centre upon relating to their external operating environment. Moreover, given that small businesses can not offer the high wages or career path development opportunities of large companies, they can often find themselves attracting less qualified, less experienced, less able and/or less committed workers and thus can face problems such as lateness, absenteeism or workers leaving without notice. Small businesses thus face potential unique problem types that can impact significantly on the take up of development opportunities and indeed can confound the seizing of the potential advantages bestowed in smallness of operation. |
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