Hannu Littunen and Hannu Niittykangas
This paper aims to examine factors influencing the high growth of new firms in metal‐based manufacturing and business service firms in Finland. It seeks to compare the factors of…
Abstract
Purpose
This paper aims to examine factors influencing the high growth of new firms in metal‐based manufacturing and business service firms in Finland. It seeks to compare the factors of how new firms achieve a high rate of growth during the first four years and years five to eight.
Design/methodology/approach
The study reported here is part of a longitudinal research project that has followed the development of 200 SMEs in Finnish metal‐based manufacturing and business services since their start‐up in 1990. At the seven‐year follow‐up the present study concentrates on the 86 surviving firms. Logistic regression analysis was used as statistical technique in locating differences between high‐growth and other firms and their owner‐managers in the selected attributes. This paper focuses on Storey's key elements. In search of potential differences in these characteristics between high‐growth firms and other firms, this study compares Finnish firms in relation to founders' motives in starting up on their own account and in their individual background characteristics, changes in strategic factors, changes in networks and management styles during various stages of entrepreneurship.
Findings
The results indicated firstly that there is a clear connection between entrepreneur's know‐how and the high growth of firms. Secondly, the findings of this study demonstrate that external networks as a management capability bring about great competitive advantage, innovations and efficiency, especially during the first four years. However, the findings of five to eight years of development contradict the findings of the first four years. The results show that the use of internal networks has a positive effect on firms' high growth during years five to eight years. Finally, the results show that industry sector affected high growth, especially in specialised metal industry firms, both during the first four years and after five to eight years of development.
Research limitations/implications
The implications of this study for academics, educational institutions, entrepreneurs, and other practitioners are that the so‐called support services of internationalisation and growth for new firms are most important. These support services could be developed with public sector assistance in areas such as financing research, innovation and information technology projects.
Orginiality/value
The paper provides a framework for testing the factors that differentiate growing new ventures during various stages of entrepreneurship.
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This study examined factors influencing the growth of new firms in metal‐based manufacturing and business services in Finland over the three first years of their operation. The…
Abstract
This study examined factors influencing the growth of new firms in metal‐based manufacturing and business services in Finland over the three first years of their operation. The factors affecting the growth of a new firm were found in the start‐up phase, in the characteristics of the entrepreneur and of the firm, and in the firm’s environment. Growth was especially explained by the know‐how and changes in the strategic behaviour of the entrepreneur and by the firm’s environment. New firmshad equal chances for growth irrespective of their locality. Instead, growth was affected by changes in a firm’s competitive situation, and, especially in the more developed service centres, growth was dependent on a firm’s expanding its market area in the first three years of operation. The results also clearly indicated that in a small specialist firm personal relationships formed an important part of the entrepreneur’s management capabilities.
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Hannu Littunen and Markku Virtanen
The purpose of this study is to analyse which factors differentiate growing firms from the non‐growth businesses. It seeks to analyse the start‐up factors as well as the changes…
Abstract
Purpose
The purpose of this study is to analyse which factors differentiate growing firms from the non‐growth businesses. It seeks to analyse the start‐up factors as well as the changes in the activities and the characteristics during the seven‐year period from the start‐up stage.
Design/methodology/approach
The study is a part of a longitudinal research project that has followed the development of 200 SMEs in Finnish metal‐based manufacturing and business services since their start‐up in 1990. The paper uses a contingency approach and concentrates on 86 respondents who have survived after seven years' activity. The paper develops a model for testing the factors that differentiate growing ventures from the non‐growth companies.
Findings
Static characteristics of the entrepreneur and the firm other than group management style do not explain the growth of the firm. The factors that differentiate growing businesses from non‐growth companies include mainly dynamic variables such as increases in production capacity and external network relations, and changes in adopting a specialised product policy. In most cases extrovert attitude and proactive strategies, particularly with respect to markets, were necessary to achieve growth over an extended period.
Research limitations/implications
The study is restricted to two branches of industry and the period covered included a severe recession in the economy. Thus more branches and development during a less turbulent time period could be included. The most important implication of the study is that analysing growth should concentrate on the dynamics of firm development rather than on static characteristics of the entrepreneur or the firm.
Practical implications
The practitioners, e.g. venture capitalists, could use the results when selecting their portfolio companies, since the findings suggest the variables which should be used in differentiating growing businesses from non‐growth companies.
Originality/value
The paper uses a contingency approach together with longitudinal data in the analysis. The results show that the differentiating factors of growing companies are dynamic variables, including especially motivation and strategy factors. Thus longitudinal data are a necessary condition for robust analysis of growth.
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Examines the characteristics of the entrepreneurial personality and the effects of changes in the entrepreneur’s personal relationships. According to the empirical findings…
Abstract
Examines the characteristics of the entrepreneurial personality and the effects of changes in the entrepreneur’s personal relationships. According to the empirical findings, becoming an entrepreneur and acting as an entrepreneur are both aspects of the entrepreneur’s learning process, which in turn has an effect on the personality characteristics of the entrepreneur. The entrepreneur’s drive to solve problems (= mastery) had increased, and control by powerful others decreased since the start‐up phase. Changes in the entrepreneur’s relations with others were also observed to have an effect on the entrepreneur’s personality characteristics. The empirical findings also show that as the number of co‐operative partners decreased, control by powerful others also decreased, and that, since the start‐up phase, entrepreneurs whose personal relations had increased also showed a clear increase in mastery.
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Miika Varis and Hannu Littunen
The purpose of this paper is to examine the information sourcing practices of small‐ to medium‐sized enterprises (SMEs) associated with the development of different types of…
Abstract
Purpose
The purpose of this paper is to examine the information sourcing practices of small‐ to medium‐sized enterprises (SMEs) associated with the development of different types of innovation (product/process/market/organizational). The relationship between different types of innovation and firms' performance is also to be examined.
Design/methodology/approach
The paper is based on a quantitative study of a sample of SMEs located in the Northern Savo region in Finland. The entrepreneurs completed a questionnaire pertaining to, for example, whether their firms had introduced novel innovations and what were the sources of information behind these innovations.
Findings
The introduction of novel product and market innovations appears to be associated with the use of more or less freely accessible information sources. The findings also indicate that the introduction of novel product, process and market innovations is positively associated with firms' growth. None of the types of innovation studied was found to have a positive relationship with firms' profitability.
Research limitations/implications
As the analysis was based on self‐reported data provided by the entrepreneurs of SMEs, the authors had to rely on their judgment regarding the novelty of the innovations they had introduced. Moreover, as the study was conducted in a single region with its idiosyncratic features, the generalizability of the findings to other regional contexts remains somewhat ambiguous.
Practical implications
The study suggests a need to re‐evaluate the innovation‐related services available to firms in the regional innovation system. The findings also imply the need for entrepreneurs and their firms to upgrade their competences in order to enhance their innovation and networking capabilities.
Originality/value
Relatively modest amounts of research have addressed the information sourcing practices of SMEs in relation to different types of innovation, both in terms of the object of change and the extent of change. The paper addresses this.
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The subject of the paper is innovative information services. The purpose of this paper is to identify the potential sources of innovation in library information services and point…
Abstract
Purpose
The subject of the paper is innovative information services. The purpose of this paper is to identify the potential sources of innovation in library information services and point out how they can be used to improve the overall service quality.
Design/methodology/approach
In the first stage, literature analysis and critique was used to establish the state of research in the field of innovative solutions and select the main sources of innovation in services. Next, a systematic search of the subject literature and network resources was carried out according to the selected criteria to find the examples of innovative commercial services, particularly in the information sector.
Findings
Libraries, like all customer-oriented service organizations, must innovate and continually evolve to better meet the needs of their audience. It seems that in libraries, the basis of innovation and building a competitive advantage over other institutions may primarily be the thoughtful design of services in the spirit of the assumptions of the experience economy. Innovative ideas based on in-depth knowledge of user needs are less dependent on financial conditions and more on the creativity and enthusiasm of library staff.
Research limitations/implications
This paper is a conceptual work presenting the issue of innovation from the perspective adopted by the author. The paper does not aim to fulfill the subject but to show some interesting aspects of this issue and help initiate discussions on innovation in libraries from the perspective of phenomena present on the commercial information services market. This approach, which has not yet been adapted in library science, may show some new aspects and lead to new conclusions. This is a literature review type of paper that is not based on empirical research and it has not yet been tested in practice; however, the author believes that it can provide a valuable framework for designing and implementing innovative services in libraries. The presented process is a preliminary proposal that can and should be modified in the future based on further scientific reflection and examples of implementations in libraries.
Practical implications
The results can be widely used in practice as a framework for designing innovative services in libraries. The paper, based on subject literature, proposes a process of designing innovative information services that can and should be tested in practice.
Social implications
The paper can help initiate the debate on the need to implement innovative solutions in library services.
Originality/value
The issue of innovation in library services has not yet been widely discussed in library and information science journals from the perspective proposed by the author. This paper presents a specific approach to library innovation based on the observation of the certain phenomena on the commercial market, which opens the door to new reflections.
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Olli Kuivalainen, Sanna Sundqvist, Sami Saarenketo and Rod McNaughton
The purpose of this paper is to present an overview of the conceptual frameworks and concepts with which the research on internationalization patterns of small and medium‐sized…
Abstract
Purpose
The purpose of this paper is to present an overview of the conceptual frameworks and concepts with which the research on internationalization patterns of small and medium‐sized enterprises (SMEs) should be conducted.
Design/methodology/approach
A comprehensive overview of concepts and a conceptual framework to study internationalization patterns of SMEs is offered.
Findings
The complexities of existing definitions and methodologies for researching internationalization patterns are highlighted, and a synthesis of the issues is provided. An integrative model of internationalization pathways, and their antecedents and outcomes is presented.
Research limitations/implications
It is recommended that future research focuses especially on the time dimension of internationalization patterns. Future research can contribute to the literature by adopting a longitudinal approach with larger samples and more detailed cases to capture the dynamics of internationalization.
Practical implications
Practitioners might map their positions, and look for challenges and opportunities with regard to their chosen internationalization pattern. They can also benchmark other firms’ pathways and fine‐tune their own approach to internationalization.
Originality/value
The paper integrates a large body of research in an important research area in international marketing. It also provides guidance on how to conduct future research in the area, and introduces the content of this special issue of the International Marketing Review.