Transfer of SME ownership: the effect of
post-transfer change actions on SME performance
MSc Business Studies Thesis
Jan Jacob klugkist Student number 10116117 University of Amsterdam (UvA) Faculty Economics and Business (FEB) Date: October 9th 2013
Table of contents
Abstract ... 2
Introduction ... 3
Theory ... 6
Entrepreneurship ... 6
SME ownership transfer ... 7
Strategic renewal ... 8
Post-transfer SME performance ...10
Methods ...16
Sample ...16
Variables ...21
Analysis ...25
Results ...27
General SME transfers ...27
Entrepreneurial SME transfers ...31
Discussion ...35
Abstract
In the light of the growing number of small and medium sized enterprise (SME) ownership transfers, this thesis attempts to further validate/generalize recent theory on ‘strategic renewal’ applied to SME’s in transfer situations (Van Teeffelen et al., 2010). Strategic renewal change actions performed by the successors (i.e. innovation, organizational change and transfer timing) are hypothesized to predict post-transfer firm performance, specifically with regard to actionable entrepreneurs. A random sample of German SME's with primarily categorical data is used for hypotheses testing (Pearson correlation testing, followed by independent sample T-tests and an N-way ANOVA which is controlled for expected distorting effects of firm size, sector & family transfers). The results demonstrate that the hypothesized relations are probably more complex than postulated, implying that the hypotheses could not be confirmed based on the statistical tests performed, thus being unable to further generalize the results of Van Teeffelen et al. (2010). Still, due to the statistical testing of other probable relations, statistical evidence arose indicating that multiple ‘simultaneous’ strategic change actions lead to better post-transfer firm performance compared to no change actions. The lack of significant results could be the reflection of a number of issues, e.g. issues with specific hypotheses formulation (and consequential issues with the generalizability of the results) and issues with the used sample regarding reliability and validity.
Introduction
For many people, running and owning a (small-) firm is practically the only realistic alternative to employment for creating a living. But is it logical that such an entrepreneurial endeavor should start with setting up a new firm while whole generations (i.e. the baby boomers and adjacent generations) seem to be in the market to sell their small-to-medium sized firms (SME’s)? In this respect entrepreneurship and SME management are often associated with each other, but they are not the same thing: entrepreneurship is a type of behavior that concentrates on opportunity recognition (and consequential actions), rather than firm resource management, and can occur in both SME’s and larger firms (but also elsewhere), whereas SME’s can be a vehicle for entrepreneurs, (SME) managers, legal entities and for people who simply run/own a business for a living (Thurik et al., 2002). When seller and buyer are in the process of transferring SME ownership, many factors are of influence on the eventual transfer outcome. Morris et al. (1997), Le Breton-Miller et al. ( 2004) & Meijaard et al. (2005) developed SME transfer models in which most factors originate from the resource-based view (Priem and Butler, 2001; Hall, 1992) and the human capital view (Becker, 1975; Barney, 2001), e.g. specific training and education, entrepreneurial and managerial experience, organizational and personal capabilities. These are relatively passive factors, while a successful transfer also depends on concrete actions instead of these (passive) resources. Inherent post-transfer ‘change projects’, as an example of concrete actions, are thought to increase the transfer success rate and thereby also boost post-transfer firm performance. This is in line with the theory of strategic renewal, as
How to best affect the general performance (vs. post-transfer performance) of all kinds of firms has had the attention of many researchers for a long time and this has already resulted in much literature on this general topic. Also, previous literature mainly focuses on how start-ups could best increase their survival rate by increasing firm performance. After the European Commission (Geerts et al., 2004; Thurik et al., 2002; European commission, 2009) put firm transfers on the science agenda in the early 2000s (this was due to the increasing importance for national economies, innovation and the growing number of firm transfers that was to be expected), some relevant literature was published with regard to SME ownership transfer processes, of which most importantly Morris et al. (1997) and Meijaard et al. (2005). However, there is still hardly any literature available on how entrepreneurs and/or legal entities can positively affect post-transfer SME performance (Van Teeffelen et al., 2010; Ucbasaran et al., 2003).
This thesis attempts to contribute to the current literature status by researching certain factors influencing post-transfer performance, more specifically with regard to entrepreneurs. This is done by 1) attempting to validate/generalize the argumentation of Van Teeffelen et al. (2010) that resources by themselves will not improve post-transfer SME performance if the firm is not (strategically) renewed via concrete actions (i.e. strategic renewal) and 2) by further specifying the target group to entrepreneurial SME transfers. SME entrepreneurs seem to be particularly action-oriented in transfer situations (Lansberg, 1988, Floren & Karssing, 2000).
The structure of this thesis is as follows. First, relevant insight into entrepreneurship with respect to SME’s and SME ownership transfer is presented. Furthermore, theoretical support for the supposedly direct relation (Van Teeffelen et al., 2010) between post-transfer mature SME performance (‘mature’ being one of the stages in a business life cycle, next to ‘start-up’, ‘growth’ and ‘decline’) and two types of strategic renewal actions (organizational change, innovative change) are presented. The indirect relation between post-transfer SME performance and transfer timing as a successor strategic renewal action (indirect because ‘timing or macro-economic situation’ leads to ‘price of capital’, which in turn leads to ‘firm performance’) is also presented. Subsequently, the research questions and hypotheses of this thesis are presented, which are analog to Van Teeffelen et al. (2010), but complemented with hypotheses specifically relevant to entrepreneurial SME transfers. The empirical part if this thesis is based on a sample that I obtained via ING Economisch bureau (Amsterdam, The Netherlands) and Lex van Teeffelen regarding German SME’s, while Van Teeffelen et al. (2010) is based on a sample regarding Dutch SME’s. The statistical tests are performed on this random stratified sample of mature German SME’s to explore the supposed relation between strategic renewal and post-transfer firm performance. After the test results are presented, the final part of this thesis will provide answers to the research questions, provide a comparison with the results of Van Teeffelen et al. (2010), discuss the implications for real-world practice & policy and provide suggestions for further research.
Theory
Entrepreneurship
Entrepreneurs among the baby boom generation (and adjacent generations) are presumed to be increasingly looking to sell (or liquidate) their firms right around this time because of age related reasons and they want to retire soon (but of course there are many other reasons for entrepreneurs wanting to sell a firm). This creates opportunities for entrepreneurs (and other people & legal entities) looking for new pursuits. Management-buy-outs (MBO’s), management-buy-ins (MBI’s) and family succession are by definition endeavors of private persons, thus more typically entrepreneurial in nature than mergers and acquisitions (SME integration and transfers to other businesses) (Ucbasaran et al., 2003 & Nordqvist et al., 2013). These private transfer types, together with mergers & acquisitions, form the total of possible types of SME transfers. Mergers are excluded from this thesis because perfor- mance cannot be measured separately due to consolidation of the two (or more) firms.
When having transferred ownership of an existing SME, entrepreneurial success depends (amongst others) on experience in the same industry as the business venture (Van Praag, 2003). Furthermore, entrepreneurs must integrate many competences and/or specialties into a coherent system required to survive as an entrepreneur (Wagner, 2006). And next to market forces, industry trends, innovations, the person-entrepreneurship fit is also a determinant for entrepreneurial survival and success. The dimensions shaping a natural person, like self-efficacy, ability to recognize opportunities, endurance, superior social skills, are all open to modification through training, thereby increasing the
person-entrepreneurship fit. Similar to employees receive training to build value for the firm, entrepreneurial training can create part of ‘entrepreneurial success’ (Markman et al., 2003).
SME ownership transfer
A firm (and thus also a SME) is often referred to as a ‘nexus of contracts’, operated to meet the preconceived inputs and outputs, thereby maximizing profits (in which a SME has a maximum of 250 employees). In Europe there is consensus on the following categorization: micro-firms with 0-9 employees, small firms with 10-49 employees and medium-sized firms with 50-250 employees. Thus this is how SME’s are defined in this thesis.
The definition of a business transfer used in this thesis originates from Van Teeffelen et al. (2010) and is regarded as a change in ownership of any firm to another person or legal entity assuring the continuous existence and commercial activity of the firm when more than 50% of the assets or shares are transferred. A SME business transfer consists of three phases (Meijaard et al. 2005, Van Teeffelen, 2010); a pre-transfer phase where firm resources, predecessor capabilities and the exit choice are evaluated, than the transfer phase where successor resources/capabilities are evaluated and the actual transfer takes place, and finally the post-transfer phase where renewal, exit outcome and firm performance are evaluated. The four parties involved in a business transfer are the seller, the buyer, financial institutions and advisors; all within the framework of tax and capital regulations. To a lesser extent, other stakeholders such as business partners, suppliers and customers, can also be
This thesis considers and explores two types of SME transfer: 1 A general type SME transfer, consisting of transfers to natural persons (family successions, MBO’s, MBI’s) and transfers to legal entities (acquisitions, but not mergers); 2 An entrepreneurial type SME transfer, consisting of transfers only to natural persons (family successions, MBO’s, MBI’s), essentially representing a narrower specification of the general type SME transfer. By making a distinction between these two types of SME’s and SME transfers, it becomes possible to compare part of the results with the argumentations from Van Teeffelen et al. (2010) on general type SME transfers, while an additional analysis will be performed to determine post-transfer change actions effects, specifically with regard to entrepreneurs (while keeping in mind there is still room to debate what constitutes an entrepreneurial type SME transfer).
Strategic renewal
In this thesis strategic renewal is defined as ‘strategic actions to align organizational competences with the environment to increase competitive advantage’ (Flier et al., 2003, p.2168) and it evolved from the resource based view. Resource based view predicts firm performance with (mostly) passive variables like financial firm structure and organizational structure. Similarly, the human capital view predicts firm performance with experience and management capabilities of the successor. Contrary to resource-based-view and human capital view, strategic renewal emphasizes the necessity of concrete (re)action to internal and external environment and not so much the necessity of bare resources and
Although strategic renewal can be regarded as a powerful tool to help counteract a firm crisis (declining sales, demands from customers and/or suppliers), it can also provide a valuable increase of organizational adaptability and knowledge assimilation (Jones & Macpherson, 2006) so to help shape a less vulnerable future for the firm (Porter, 1979). Barr et al. (1992) state that this should actually be regarded as an ongoing process.
Theory with regard to strategic renewal primarily focusses on larger firms and it states that improving competitive advantage will result in improved firm performance. In turn, improving competitive advantage can be achieved by implementing certain changes (actions), which then should overcome routines that reduce competitiveness (Child, 1997; Teece et al., 1997). Improving (post-transfer) firm performance via strategic renewal not only applies to larger firms, but certainly also to SME’s. Firm resources and strategic (renewal) actions in general are better controlled in SME’s when compared to larger firms. This is due to the lack of multiple layers of power (i.e. flat organizations), thereby reducing ‘information asymmetry’ (Jensen, 1976) and thus increasing the effectiveness of (strategic) change action, particularly in transfer situations (Lansberg, 1988, Floren & Karssing, 2000).
There is an increasing amount of (underperforming) SME’s for sale, with evident opportunities for strategic renewal (DeTienne et al., 2008; Cyert & March, 1963). These renewal opportunities can be performed by succeeding entrepreneurs and/or legal entities to boost competitive advantage and thus (post-transfer) SME performance. But strategically renewing a firm (after ownership transfer) also comes with certain risks.
SME successors generally do not possess the risk management tools that larger firms do possess (Sull, 2004), like the fact that larger firms can strategically renew one business while being supported (financially or otherwise) by their other businesses. Embedding strategic renewal knowledge at the organizational level is one of the criticalities here (Jones & Macpherson, 2006).
Post-transfer SME performance
Post-transfer SME performance within the context of this thesis is a multifaceted and complex construct. Wolff et al. (2006) suggest growth and profitability as two founding dimensions of small firm performance. Child (1997) suggests incorporating both objective and subjective performance indicators in a performance variable. Thus, in this thesis, post-transfer SME performance is defensibly regarded as a construct of the items turnover-growth, profitability-turnover-growth, customer-number-growth and goal-achievement, all from the perception of the successor, analog to Van Teeffelen et al. (2010).
In the post-transfer phase it is expected that entering entrepreneurs (successors) with more knowledge and experience, derived from related work experience from outside the target firm, will be able to increase post-transfer firm performance better than entrepreneurs with less relevant work experience (based on resource based view). Additionally, it can be expected that post-transfer firm performance is higher in firms where the successor entrepreneur is an insider and is related to the predecessor (based on ‘knowledge management’ literature).
Both above perspectives are valid; firm performance depends on good relations between predecessor and successor and familiarity of the successor with the industry (Berent et al., 2009).
Keeping all of the above in mind, which types of strategic renewal change actions are likely to contribute to post-transfer performance? It appears from Van Teeffelen et al. (2010) that organizational change, product/market innovations and combined actions supposedly increase post-transfer firm performance compared to no renewal; in a direct way and especially so in smaller firms. Also transfer timing (i.e. the macro-economic condition in which the transfer takes place), as an action of the successor, supposedly appears to be indirectly related to post-transfer firm performance.
The next four paragraphs will elaborate on the effect of these strategic renewal change actions on post-transfer performance. The research questions and hypotheses will also be postulated. As mentioned earlier, two types of firm transfer, general and entrepreneurial, will be taken into account here, of which the latter type represents a narrower specification of the former SME type.
Organizational change actions
Not many SME’s function optimally (independent of whether sufficient resources are available) and there is an increasing amount of such underperforming firms.
According to Meijaard et al. (2005) and Child (1997), such SME’s can be brought to a higher performance level (higher sales growth, profitability, innovativeness) via organizational change. The definition of organizational change used in this thesis is: structural changes, including general (process) improvement of the total firm (Wolff et al., 2006). For example: redesign of the organizational (communication) structure, change and modernization of staff (flexibility) or even relocation of the firm.
What is the expected effect on SME performance of organizational change actions after SME ownership transfer? And what is the expected effect when narrowing down to mere entrepreneurial SME ownership transfers?
Hypothesis 1a: Post-transfer SME performance will increase by taking organizational change actions (all SME transfers, excluding mergers) as compared with taking no actions.
Hypothesis 1b: Post-transfer SME performance will increase by taking organizational change actions (only entrepreneurial SME transfers; i.e. family successions, MBO’s & MBI’s) as compared with taking no actions.
Innovative change actions
For both large firms and SME’s, innovation is essential for competitive advantage and long-term survival (Teece, 2007; Vermeulen et al., 2005). Reviewing literature, Van Teeffelen et al. (2010) find that innovations show mixed results for increasing firm performance.
This might be due to lagged performance effects of such innovations (Freel & Robson, 2004). The definition of innovative change actions used in this thesis is: actions new to the firm directly related to new products/services, improvements of products/services or improvements on marketing or new market entry (De Jong et al., 2006; Wolff et al., 2006; Verhees et al., 2004). It is presumed that successors, when they choose to take innovative change actions, this is meant to contribute to firm performance in the long run.
What is the expected effect on SME performance of this change action after SME ownership transfer? And what is the expected effect when narrowing down to mere entrepreneurial SME ownership transfers?
Hypothesis 2a: Post-transfer SME performance will increase by taking innovative change actions (all SME transfers, excluding mergers) as compared with taking no actions.
Hypothesis 2b: Post-transfer SME performance will increase by taking innovative change actions (only entrepreneurial SME transfers; i.e. family successions, MBO’s & MBI’s) as compared with taking no actions.
Combined change actions: organizational and innovative
In reality, successors often decide to perform multiple change actions (in the same time frame, meaning just after the firm transfer), while taking into account the complexity of change projects and the required firm resources.
What is the expected effect on SME performance when, for instance, a combination of both organizational- and innovative change actions, is performed or implemented after SME ownership transfer? And what is the expected effect when narrowing down to mere entrepreneurial SME ownership transfers?
Hypothesis 3a: Post-transfer SME performance will increase by taking combined change actions (organizational and innovative, all SME transfers, excluding mergers) as compared to taking no actions.
Hypothesis 3b: Post-transfer SME performance will increase by taking combined change actions (organizational and innovative, only entrepreneurial SME transfers; i.e. family successions, MBO’s & MBI’s) as compared to taking no actions.
Alternatively to combined actions as described above, multiple actions can also mean other combinations of change actions, independent of action type. As long as there are two or more actions implemented in the same time frame. Knowing if the number of implemented change actions is of influence on post-transfer performance is of evident value. For this reason action-type-independent multiple actions will be part of the statistical analysis, although not hypothesized so to limit the research scope of this thesis and thereby keep the comparability to Van Teeffelen et al. (2010) optimal.
Timing of SME ownership transfer
Conditional to a successful SME transfer is the availability of capital (Geerts et al., 2004; Langman and Lugt, 2005; Le Breton-Miller et al., 2004). Marco economic conditions (categorized in decline, average growth, high growth) are expected to relate to SME acquisition prices and to the availability of capital (capital for ownership transfer, but also for post-transfer change actions). The current financial crises, ongoing since 2008, provides numerous clear examples of that. In turn, SME acquisition costs and the availability of capital will relate to post-transfer SME performance because SME performance depends partly on firm results, which are influenced by the price of capital (interest) and the cost of firm purchase.
How does timing (implying which economic condition, measured by deviation from a gross domestic product (GDP) average) relate to SME performance after SME ownership transfer? And what is the expected effect when narrowing down to mere entrepreneurial SME ownership transfers?
Hypothesis 4a: Post-transfer SME performance will be higher after transfers during economic decline than after transfers during average growth and high growth (all SME transfers, excluding mergers)
Hypothesis 4b: Post-transfer SME performance will be higher after transfers during economic decline than after transfers during average growth and high growth (only entrepreneurial SME transfers; i.e. family successions, MBO’s & MBI’s).
Methods
Research on SME transfers can be partially categorized as a social science; even more so when personal activity (actions) with respect to entrepreneurial post-transfer performance is the research objective. In general, organizational social complexities often require an interpretivistic view (antipositivistic view), implying that understanding the differences between humans in their role as social actors is key. This specifically means that, consequential to the survey type used (in which the respondents were asked subjectively for their opinion on several items thereby reflecting their values), the sample consists of many unique transfer occurrences. Nevertheless, a deductive quantitative survey analysis is performed in order to be able to arrive at generalizable conclusions.
Sample
Geerts et al. (2004) is based on a dataset generated by Heliview (located in Breda, The Netherlands), specifically generated for Geerts et al. (2004) to describe size, trends and relevance of SME transfers in Germany, Belgium and The Netherlands. Van Teeffelen et al. (2010) also used this dataset as the basis for their article. However, they only used specific parts and only the data regarding Dutch SME’s. After having deliberated with Mr. M. Peek (research supervisor of Mrs. Geerts at ING Economisch Bureau, Amsterdam, The Netherlands) and with Mr. Van Teeffelen (professor of business transfers and innovation at the university of applied science, Utrecht, The Netherlands),
I received their permission to use the German part of the dataset for this thesis, which was not used by Van Teeffelen et al. (2010).
By analyzing the data regarding German SME’s from this dataset (including the questionnaire), this thesis attempts to further validate / generalize the argumentations of Van Teeffelen et al. (2010) that resources by themselves will not improve post-transfer SME performance if the firm is not (strategically-) renewed via certain concrete actions. Also a further specification of concerned research is performed by separately looking into typical entrepreneurial SME transfers.
The sample is a stratified random sample, dating from 2004, and it contains data of mature SME’s, from former West-Germany (Bundesländer Nordrhein-Westfalen, Niedersachsen, Hessen, Rheinland-Pfalz, Saarland, Baden-Württemberg und Bayern) which have all transferred ownership (presumed more than 50% of the assets or shares) between 1993 and 2002. The sample is stratified on firm size (0-9 fte, 10-49 fte, 50-250 fte), sector (production industry, corporate services), transfer category (family, MBO, MBI, acquisition). The questionnaire at the basis of the sample was conducted by phone and 500 successors responded (response rate around 33%). Main reasons for non-response were lack of time and unwillingness to give confidential information. 125 mergers were excluded from the dataset since individual SME post-transfer performance indicators are non-existent, unmeasurable or unreliable, after a merger. The sample actually used for testing was further reduced to size of 168 transfers because of missing values.
90 of these 168 transfers were acquisitions by other companies, leaving a sample size of 78 transfers for a specific analysis regarding the entrepreneurial SME transfer type.
Table 1 (general SME transfer type) and table 2 (entrepreneurial SME transfer type) demonstrates the main statistical descriptives of the two interrelated samples. The sample is skewed towards the western part of Germany and towards periods of economic decline. SME’s which were unsuccessful to obtain financing for transfer are not part of the sample, as are SME’s which ceased to exists after transfer. The successors were asked which actions they performed in the first two years after transfer. Around two thirds of the successors responded to the questionnaire with having performed multiple change actions, independent of transfer category, while around one third of the successors performed a combination of organizational and innovative change actions.
The expected lagged performance effects of (mainly innovation related-) change actions (Freel and Robson, 2004) justifies measuring performance not immediately after a SME transfer. And the expected fading away over time of the performance effects of change actions (Child, 1997) justifies a certain time limit for measuring performance after SME transfer. Since approximately 69% of the successors have participated to the questionnaire between a medium term of 2-5 years after the SME transfer, this means we have a reasonably reliable sample for measuring post-transfer SME performance, taking lag and fading-away of change effects into account. None the less, 31 % of the respondents fall in the category where lagged performance effect and the fading away of performance effects do play a certain role.
Table 1
General SME transfers sample characteristics (including entrepreneurial transfers)
% Mean Sd N Firm size 70* 66 168 Micro (0-9) 16 Small (10-49) 33 Medium (50-250) 51 Sector 168 Industrial 52 Service 48 Transf. category 168 Family 19 MBO 15 MBI 13 Acquisition 53 Actions taken** 168 Organizational change 16 26 Innovative change 33 55 Combined actions 36 61 No action 15 26 Transfer year / 1999 2.44 168
deviation from average GDP increase % 2.61 1.09 10
1993 0.33 3 1994 2.41 2 1995 1.11 5 1996 -1.18 5 1997 -0.61 4 1998 -0.15 12 1999 -0.55 12 2000 -0.25 15 2001 0.04 18 2002 -1.17 24
Note 1: Deviation from average GDP increase percentage (macro-economic situations: decline, average & growth) is explained in the section ‘independent variables’
Note 2: Average GDP increase over 1993-2002 and deviations from average GDP increase percentages are calculated with data from Germany’s ‘Das Statistische Bundesamt’
Table 2
Entrepreneurial SME transfers sample characteristics (excluding acquisitions)
% Mean Sd N Firm size 52* 60 78 Micro (0-9) 26 Small (10-49) 37 Medium (50-250) 37 Sector 78 Industrial 46 Service 54 Transf. category 78 Family 40 MBO 32 MBI 28 Actions taken** 78 Organizational change 11 Innovative change 40 Combined actions 31 No action 18
Note 1: Data on ‘transfer year’ and ‘deviation from average GDP increase %’ is practically identical to the data in table 1
* Median 55, ** Multiple actions 45, against single actions 33 Note 2: Column three shows percentages
Variables
Dependent variables
Post-transfer performance, as the continuous dependent variable (DV), is operationalized/constructed as a four-item scale from turnover-growth, profitability-growth, customer-amount-growth and goal-achievement, all from the perception of the successor (and which are all categorically ranked in the related questionnaire), thereby incorporating both objective and subjective performance indicators (Child, 1997; Van Teeffelen et al., 2010). Because small firms are often reluctant to provide detailed objective performance information (but often are willing to provide subjective performance information), and because perceived (subjective) performance can be regarded as reliable (Nayyar, 1992; Tan and Litschert, 1994), the usage of perceived post-transfer-SME performance is defendable.
A reliability analysis on this four-item scale construct for post-transfer performance (data regarding the general SME transfers) points out that these four items account for 67% of the total variance (internal consistency- or reliability coefficient 0.67), which according to literature is reasonable, especially regarding the multi-scale definition for post-transfer performance. The more items are used in a scaled item, the higher the chance on less explained variance. Data regarding the entrepreneurial SME transfers presents a slightly higher reliability coefficient of 0.72. Table 3 (general SME transfers) and table 4 (entrepreneurial SME transfers) provide for the main descriptives of the four-item performance scale.
Table 3
Dependent variable ‘post-transfer SME performance’, regarding general SME transfers
Range Mean Sd N Reliability coefficient α Post-transfer SME performance 4-16 11.96 2.76 168 0.67 Did turnover rise after transfer?
(1 strong increase - 5 strong decrease)
1-5 3.66 1.21 168
Did profitability rise after transfer? (1 yes, 2 no change, 3 no)
1-3 2.43 0.69 168
Did the number of customer rise after transfer? (1 yes, 2 no change, 3 no)
1-3 2.50 0.68 168
Did you meet your set goals after transfer? (1 not at all - 5 even more)
1-5 3.37 1.18 168
Table 4
Dependent variable ‘post-transfer SME performance’, regarding entrepreneurial SME transfers
Range Mean Sd N Reliability coefficient α Post-transfer SME performance 4-16 12.06 2.72 78 0.70 Did turnover rise after transfer?
(1 strong increase - 5 strong decrease)
1-5 3.66 1.21 78
Did profitability rise after transfer? (1 yes, 2 no change, 3 no)
1-3 2.43 0.69 78
Did the number of customer rise after transfer? (1 yes, 2 no change, 3 no)
1-3 2.50 0.68 78
Did you meet your set goals after transfer? (1 not at all - 5 even more)
Independent variables
Innovative change action and organizational change action, as categorical independent variables (IV’s), are also operationalized/constructed as multi-item scales. Based on literature definitions provided earlier in this thesis, the relevant questionnaire items relating to change actions (all categorically ranked) are categorized to either innovative change actions or organizational change actions. Van Teeffelen et al. (2010) validated this item categorization by having the scales confirmed by four business-studies lecturers. The innovative change scale has a reasonable reliability (0.72), while the organizational change scale has a high reliability (0.90). Please refer to Van Teeffelen et al., 2010, Table 2, for further scale construct details and for a visual representation of the innovative change scale and the organizational change scale.
In case the respondents mentioned multiple actions and these actions (in the amount) tended towards innovation, the item was added to IV innovative change actions. In case these multiple actions tended towards organizational change, the item was added to IV organizational change related change actions. And in case these multiple actions did not tend to either organizational change or innovative change, the items were added to IV combined actions (combined innovative and organizational change types).
Also, multiple actions as a separate categorical IV is taken into account during the analysis phase. Contrary to the IV combined actions, the multiple actions IV was not identified in Van Teeffelen et al. (2010) and should be regarded as a more general IV, meaning that the multiple actions IV can imply all change action combinations as long as there are two or
Timing of the succession is operationalized/constructed by comparing the percentage GDP growth rate in a specific year (obtained from Das Statistische Bundesamt) with the average percentage GDP growth rate over the period 1993-2002. GDP is a widely used instrument to measure macro-economic conditions of countries. From the moment of the German reunification in 1990, GDP data were available for the reunited country. A specific year is coded as ‘macro-economic decline’ when the percentage GDP growth rate is below a deviation of -0.5% of the average percentage GDP growth rate (years 1996-1999, 2003), coded as ‘average macro-economic situation’ when the percentage GDP growth rate is between a deviation of -0.5% and +0.5% of the average percentage GDP growth rate (years 1993, 2000-2001) and coded as ‘macro-economic growth’ when the percentage GDP growth rate is above a deviation of +0.5% of the average percentage GDP growth rate (years 1994-1995). The GDP data are the only data that come from a different source than ING Economisch Bureau.
Control variables
Family businesses (in this thesis only family SME’s) appear to be relatively conservative and thus are less inclined to change after a ownership transfer (Donckels et al., 1999 & Geerts et al., 2004). From Meijaard et al. (2005) it appears that smaller SME’s perform better after transfer, independent of type and number of change actions. And Freel and Robson (2004) and De Jong et al. (2006) demonstrate that (innovative) change actions show different effects on firm performance between the industry sector and the services sector). So these three categorical control variables (firm size, transfers family transfer & sector) will be compensated for during the analysis phase.
Analysis
Because of the split-up of the data into general SME transfers and entrepreneurial SME transfers, two consecutive statistical analyzes will be performed; one for each SME transfer type (general and entrepreneurial). As a consequence the results chapter is built-up accordingly.
A principal components analysis (factor analysis) on the DV and all IV’s together resulted in 12 factors, which account for 90% of the total variance, and of which the first and largest factor accounts for 15% of the total variance.
Post-transfer performance can be regarded as a continuous DV and the change actions (including timing and controls variables) can be regarded as categorical IV’s. The hypotheses only predict categorical mean differences in post-transfer performance and not linear dependency, meaning that the mean post-transfer performance of multiple firms after implementation of one hypothesized change action is compared to the mean post-transfer performance of firms that did not perform any change actions.
This implies (1-tailed) independent sample T-tests (ISTT’s) are best suited to use for testing the hypotheses consecutively. Because of the relative high number of hypotheses, and therefore the increased risk of a type I error using only separate T-tests, also N-way ANOVA’s are conducted (univariate ANOVA; standard type-3 in SPSS is arguably suitable due to unequal sample sizes) to back-up the separate T-tests and to easily categorically present an extensive comparison of the total of potential relations between IV’s and the DV in a table.
Thus the data analysis plan is: 1) globally examine relations by determining relevant correlations; 2) perform separate ISTT’s on all action types separately against post-transfer performance; 3) perform N-way ANOVA’s on the hypotheses IV’s and DV simultaneously, while taking into account the control variables.
Results
Results with regard to the two identified SME transfer types (general and entrepreneurial) are consecutively presented in this chapter.
General SME transfers
Table 5 presents the correlations between the DV and all IV’s for general SME transfers (in which the ‘multiple actions’ is added as an IV). There appear to be no correlations between the DV post-transfer performance and the IV’s organizational change actions, innovative change actions, combined change actions and no change actions. The IV macro-economic condition also does not appear to correlate to the DV post-transfer performance. With regard to the three control IV’s firm size, sector & family transfer, we also see no correlation with the DV post-transfer performance. The IV multiple actions does show a correlation of .153 (p < .05) with DV post-transfer performance, implying that multiple actions lead to better post-transfer performance.
Table 5
Pearson correlations of IV’s and DV for general SME transfers
Variables Coding 1 2 3 4 5 6 7 8 9 10
1 Firm size Range 1-3
2 Sector 1=indus, 2=serv -.152*
3 Family transfer 0=no, 1=yes -.122 .090
4 Economic growth avg GDP incr dev .107 .037 .109
5 Mult. ch. actions 0=no, 1=yes .120 -.052 -.133 .062
6 Org. ch. actions 0=no, 1=yes .108 -.015 .009 -.045 -.093
7 Inn. ch. actions 0=no, 1=yes -.194* -.088 .061 -.021 -.117 -.299**
8 Comb. ch. actions 0=no, 1=yes .143 .084 -.136 .048 .493** -.323** -.527**
9 No change actions 0=no, 1=yes -.047 .018 .093 .009 -.410** -.183* -.299** -.323**
10 Post tr. perform. Range 4-16 .114 .109 .001 .139 .153* -.030 -.051 .100 -.036
Note: * = p < .05, ** = p < .01
Consecutive to the correlation testing, independent sample T-tests (ISTT’s) are performed to determine whether there are significant differences in the means for DV post-transfer performance when comparing IV ‘no actions’ with IV’s ‘innovative change actions’, ‘organizational change actions’ and ‘combined change actions’. These ISTT’s point out there are no significant mean differences in post-transfer performance. Similar ISTT’s for the effect of timing (macro-economic condition) on post -transfer performance point out there are also no significant effects on post-transfer performance.
After the ISTT’s, a type-3 univariate ANOVA was performed, of which table 6 presents the descriptive statistics for general SME transfers and in which the superscripted a’s and b’s represent the prior performed ISTT results (see note 3 in table 6).
Table 6
Descriptive statistics for general SME transfers on DV post-transfer performance scores in type-3 univariate ANOVA
Type of action
Innovative change actions Organizational change actions
M SD N M SD N
Timing Total 11.76a 3.10 55 11.77 a 3.92 26
Decline 11.35 2.97 26 11.55 2.51 11
Average 12.42 3.15 26 11.64 3.18 25
Growth 9.67 3.22 3 16.00 - 1
Combined change actions No change actions
M SD N M SD N Timing Total 12.33 a 2.60 61 11.73 b 2.20 26 Decline 12.24 2.79 29 12.00 .943 10 Average 12.15 2.59 26 11.50 2.82 14 Growth 13.50 1.52 6 12.00 2.83 2 Total M SD N Timing Total 11.96 2.76 168 Decline 11.80 b 2.63 76 Average 12.04 a 2.89 80 Growth 12.50 a 2.75 12 Note 1: R squared = .077
Note 2: Controlled for firm size, sector & family transfer, all of which are not significant Note 3: All superscripted a’s have been tested with 1-tailed ISTT’s against the superscripted b’s; no significant differences were found
Regarding the type-3 univariate ANOVA, the total model is not significant: F(13, 167) = .910, p < .550, R2 = .077. Also there are no significant main effects within the model. This means that there is no difference in the mean of DV post -transfer performance between the different IV groups innovative change actions, organizational change actions, combined change actions, no actions & timing. The same applies for the control variables firm size, sector and family transfer. A graphical representation of the ANOVA descriptives from table 6 is not included as it would only show that there are no differences in the means.
Based on the ISTT’s and the ANOVA, there is not enough evidence that justifies accepting the hypotheses (1a, 2a, 3a, 4a,) which were formulated in the ‘theory’ chapter of this thesis. Yet, the correlation of .153(p < .05) between post-transfer performance and multiple actions implies that post-transfer performance is positively affected when two or more (type independent) actions are implemented (excluding timing): an ISTT points out there is a significant difference in the mean of post-transfer performance when comparing multiple actions against no/single actions (t = -1.999, df = 166, p = .024, 1-tailed).
Although not relevant for testing the hypotheses and thus not tested, table 5 shows some noticeable other correlations, namely a correlation of -.152 (p < .05) between firm size and sector, implying that larger SME’s tend to be in the industrial sector. And a correlation of -.194 (p < .01) between firm size and innovative change actions, implying that innovative change actions tend to be implemented more often in smaller SME’s than in larger SME’s.
Other noticeable correlations, although not presented in table 5, are -.279 (p < .01) between MBI and firm size, implying MBI’s are more common in smaller SME’s. And a correlation of .296 (p < .01) between acquisition (transfer to another business) and firm size, implying acquisitions occur more often in larger SME’s.
Entrepreneurial SME transfers
Table 7 presents the correlations between the DV and all IV’s for entrepreneurial SME transfers (in which multiple actions is added as an IV). There appear to be no correlations between the DV post-transfer performance and the IV’s organizational change actions, innovative change actions, combined change actions and no change actions. The IV macro-economic condition also does not appear to correlate to the DV post-transfer performance. With regard to the three control variables firm size, sector & family transfer, we see a correlation between post-transfer performance and firm size of .255 (p < 0.05), implying larger SME’s tend to show better post-transfer performance.
Table 7
Pearson correlations of IV’s and DV for entrepreneurial SME transfers
Variables Coding 1 2 3 4 5 6 7 8 9 10
1 Firm size Range 1-3
2 Sector 1=indus, 2=serv -.451**
3 Family transfer 0=no, 1=yes .122 -.101
4 Economic growth avg GDP incr dev .230 -.151 .193
5 Mult. ch. actions 0=no, 1=yes .181 -.141 -.050 .136
6 Org. ch. actions 0=no, 1=yes .018 -.091 .127 -.007 -.217
7 Inn. ch. actions 0=no, 1=yes .006 .083 -.039 .006 -.052 -.307*
8 Comb. ch. actions 0=no, 1=yes .150 -.129 -.068 .114 .610** -.267* -.510**
9 No change actions 0=no, 1=yes -.202 .131 .016 -.136 -.469** -.191 -.364** -.317*
10 Post tr. perform. Range 4-16 .255* -.077 -.071 .232 .164 .068 -.044 .000 -.006
Note: * = p < .05, ** = p < .01
Consecutive the correlation testing, independent sample T-tests (ISTT’s) are performed to determine whether there are significant differences in the means for DV post-transfer performance when comparing IV ‘no actions’ with IV’s ‘innovative change actions’, ‘organizational change actions’ and ‘combined change actions’. These ISTT’s point out there are no significant mean differences in post-transfer performance. Similar ISTT’s for the effect of timing (macro-economic condition) on post -transfer performance point out there are also no significant effects on post-transfer performance. Because of the correlation between DV post-transfer performance and firm size, an additional ISTT was performed and it points out there actually is no significant mean difference in post-transfer performance.
After the ISTT’s, a type-3 univariate ANOVA was performed, of which table 8 presents descriptive statistics for entrepreneurial SME transfers and in which the superscripted a’s and b’s represent the prior performed ISTT results (see note 3 in table 8).
Table 8
Descriptive statistics for entrepreneurial SME transfers on DV post-transfer performance scores in type 3 univariate ANOVA
Type of action
Innovative change actions Organizational change actions
M SD N M SD N
Timing Total 11.94 a 3.151 31 12.67 a 3.240 9
Decline 11.73 3.289 11 12.50 2.380 4
Average 12.11 3.230 19 12.00 4.243 4
Growth 11.00 - 1 16.00 - 1
Combined change actions No change actions
M SD N M SD N Timing Total 12.80 a 2.620 24 11.93 b 1.385 14 Decline 11.30 3.114 12 12.00 .926 8 Average 12.63 1.996 8 11.40 1.817 5 Growth 13.25 1.708 4 14.00 - 1 Total M SD N Timing Total 12.06 2.718 78 Decline 11.74 b 2.672 35 Average 12.11 a 2.866 36 Growth 13.43 a 1.902 7 Note 1: R squared = .147
Note 2: Controlled for firm size, sector & family transfer, all of which are not significant Note 3: All superscripted a’s have been tested with 1-tailed ISTT’s against the superscripted b’s; no significant differences were found
Regarding the type 3 univariate ANOVA, the total model is not significant: F(13, 167) = .777, p < .689, R2 = .147. Also there are no significant main effects within the model. This means that there is no difference in the mean of DV post -transfer performance between the different IV groups innovative change actions, organizational change actions, combined change actions, no actions & timing. The same applies for the control variables firm size, sector, family transfer. A graphical representation of the ANOVA descriptives from table 6 is not included as it would only shows that there are no differences in the means.
Based on the ISTT’s and the ANOVA, there is not enough evidence that justifies accepting the hypotheses (1b, 2b, 3b, 4b,) formulated in the ‘theory’ chapter of this thesis.
Although not relevant for testing the hypotheses and thus not tested, table 7 shows some noticeable other correlations, namely a correlation of -.451 (p < .01) between firm size and sector, implying that larger SME’s tend to be in the industrial sector.
Discussion
Theory states that strategic renewal generally leads to increased competitive advantage, which leads to general improved firm performance. Although the theory of strategic renewal focuses on multinationals in a perfect and global market, this thesis hypothesizes that the theory of strategically changing/renewing a firm to increase firm performance is also applicable to SME’s, and in particular SME’s that recently have transferred ownership via an MBI, MBO or family succession (these three defensibly being typical entrepreneurial transfers). This is tested on a sample of German SME’s.
Contrary to theory, on the basis of the general SME transfer sample analysis, hypotheses 1a, 2a, 3a & 4a have to be rejected; the IV’s innovative change actions, organizational change actions, combined change actions, no change actions and transfer timing do not significantly predict general SME type post-transfer performance. The control variables firm size, sector & family transfer also do not significantly predict general SME type post-transfer performance. At first glance this is a bit worrying. Yet, when adding the IV ‘multiple change actions’ as a predictor for general SME type post-transfer performance in the analysis, there arises some significant evidence that the number of implemented change actions positively influences general SME type post-transfer performance. This demonstrates that the defined change actions do predict post-transfer performance in some way, but it unfortunately does not change the fact that this thesis is unable to contribute to the generalizability of the general SME type results of Van Teeffelen et al. (2010).
Separate from the research questions and outside of the scope of this thesis, it appears from the calculated correlations that, with regard to general SME transfers, MBI’s are more common in smaller SME’s and that acquisitions are more common in larger SME’s. This is in line with theory on distribution of capital.
With regard to entrepreneurial SME transfers: on the basis of the entrepreneurial SME type sample analysis and contrary to theory, hypotheses 1b, 2b, 3b & 4b also have to be rejected; the IV’s innovative change actions, organizational change actions, combined change actions, no change actions and transfer timing do not significantly predict entrepreneurial SME type post-transfer performance. The control variables firm size, sector & family transfer also do not significantly predict entrepreneurial SME type post-transfer performance, although there is a weak correlation between firm size and post-transfer performance in the opposite direction than predicted (but the ISTT shows no mean difference). Separate from the research questions and outside of the scope of this thesis, it appears from the calculated correlations that, with regard to entrepreneurial SME type transfers, the industrial sector comprises of larger SME’s rather than smaller SME’s, which is in line what might be expected (production industry SME’s vs. corporate services SME’s)
The lack of relations significant to the hypotheses does give rise to a discussion about the reliability of the German sample, the differences between the Dutch and German markets, the constructs/variables, strategic renewal after ownership transfer and the way entrepreneurial type SME transfers is defined. These five items are discussed separately below.
Sample reliability and validity
Although there were additional reasons for reduced sample size, the low response rate of around 33% provides an increased chance on sample bias and an unequal distribution among respondents (skewness toward economic decline and multiple change actions). The sample size for general SME type transfers was 168, while the sample size for entrepreneurial SME type transfers was 78. In both SME types the skewness implied that when comparing primarily means of economic growth periods and means of SME’s having performed no change actions, N was reduced to below 20 where is generally considers an absolute minimum for reliable sample comparison. Firms that ceased to exists shortly after transfer were not part of the sample and only West-German SME’s have taken part in the questionnaire while the national GPD (thus also including data from the eastern part of Germany) was used for determining the effect of macro-economic situation (timing) on SME transfers. Another remark regarding sample reliability: a specific industry barometer would potentially provide better predictions for the macro-economic condition during firm transfer than the GDP, because not all industries are cyclic in the same way. Regarding the lagged effect and fading away of change actions effects: 69% of the successors have responded to the questionnaire between a medium term of 2-5 years after the SME transfer. The other 31% of the transfers lies outside this timeframe and the effects of the change actions performed by these SME’s are subject to a lagged effect and to the fading away over time of the effects of such change actions. This compromises sample reliability.
Differences in market environment
In countries where multiplex networks of firms (interfirm networks) are relatively common, such as Germany, firm exits from such interfirm networks (transfers) are more costly than in e.g. The Netherlands (Aquilera and Jackson, 2003). This is due to the interrelatedness and potential contradicting network interests. The relatively larger dependency on banks (rather than private institutions) for capital also influences the way that capital is distributed amongst different companies and projects. These two aspects could be an explanation for the German sample showing no relation between SME transfer timing and firm price (and ultimately post-transfer SME performance).
Constructs
Regarding the innovative- and organizational change action variables, the high degree of interfirm networks and conservativeness (especially so in family firms) in Germany could imply that the degree of change action implementation is lower in Germany compared to The Netherlands (less effect due to interfirm network resistance). Consequently, the usage of subjective performance measurement for determining post-transfer performance can lead to different outcomes in different regions and/or cultures. Nevertheless, the four-item scale for post-transfer performance is regarded as a valid construct for determining the effect of certain change actions (innovative-, organizational change actions or combined actions), although it is has a very wide definition.
Given the fact that the price of capital (interest) and the firm purchase price is reflected by the macro-economic situation (timing) and are only reflected in one of the four scaled items for performance (namely profitability-growth), one might expect that transfer timing (as a successor action) is less likely to show a relation with post-transfer performance (three in four scaled items for performance are unrelated to timing). Additionally, in the current bad macro-economic situation, it is not uncommon that banks tend to not lend capital for firm transfers or projects at all, even if the risk is low, making it reasonable to assume that in other periods of economic decline similar extremes occur, compromising reliability of the results.
Strategic renewal
As a practical consequence of this thesis for (future) entrepreneurs, it can be stated that more change actions generally lead to more positive effect on performance than no (or one) change action(s) after transfer, implying that strategic renewal, as a concept, does hold a certain (practical) value and relevance for SME’s.
What constitutes an entrepreneurial type SME transfer?
This thesis regards MBO’s, MBI’s and family transfers as typical ‘entrepreneurial type SME transfers’. This is defensibly a logical subdivision when regarding the description of entrepreneurs in the theory chapter of this thesis. Nevertheless, an issue can be that MBO’s and MBI’s can also be considered a form of general type SME transfer and family transfers cannot always be categorized as being entrepreneurial in nature.
For future research, it should be interesting to determine the exact causality between change actions and performance, because at this point it is not entirely sure to what degree change actions lead to performance improvement and to what degree increased performance leads to change actions. Determining the exact effect of lag of change effect and fading away over time of change effect should also be an interesting research project, although difficult to measure. Another research suggestion is to define other specific predictor variables (independent variables) for post-transfer performance that are not passive in nature (like experience and education), contrary to the wide definitions of innovative actions and organizational actions. This could lead to more practical value for (future) entrepreneurs, thereby supporting the success of many firm transfers to come.
References
Aquilera, R.V. and Jackson, G. (2003) The Cross-National Diversity of Corporate Governance: Dimensions and Determinants, The Academy of Management Review, Vol. 28, No. 3, pp. 447-465
Barney, J.B. (2001) ‘Is the resource-based theory a useful perspective for strategic management research? Yes’, Academy of Management Review, Vol. 26, No. 1, pp.41–56.
Barr, P.S., Stimpert, J.L., Huff, A.S. (1992) Cognitive change, Strategic action, and Organizational Renewal. Strategic Management Journal, Vol. 13, 15-36.
Becker, G.S. (1975) Human Capital, National Bureau of Research, New York.
Berent, M., Uhlaner, l., Gibcus, P., Timmermans, N. (2009) The relationship between successor, planning characteristics, and the transfer process on post-transfer profitability in SMEs. SCALES-paper H200901.
Child, J. (1972) ‘Organizational structure, environment and performance: the role of strategic choice’, Sociology, Vol. 6, No. 1, pp.1–22.
Cyert, R. and March, J. (1963) A Behavioral Theory of the Firm, Prentice Hall, Englewood Cliff, NJ
De Jong, J. and Vermeulen, P. (2006) ‘Determinants of product innovation in small firms’,
DeTienne, D., Shepherd, D., De Castro, J. (2008) The fallacy of “only the strong survive”: The effect of extrinsic motivation on the persistence decisions for under-performing firms.
Journal of Business Venturing 23, 528-546.
Donckels, R. and Lambrecht, J. (1999) The Re-emergence of Family-Based Enterprises in East Central Europe: What Can Be Learned from Family Business Research in the Western World?, Family Business Review, vol. XII, no. 2, 171-188
European commission, 2009, Brochure with results of the pilot action “ A helping hand for
SMEs – Mentoring Business Transfer”
Flier, B., Van den Bosch, F. and Volberda, H. (2003) ‘Co-evolution in strategic renewal behavior of British, Dutch, and French financial incumbents; interaction of environmental selection, institutional effects and managerial intentionality’, Journal of Management
Studies, Vol. 40, No. 8, pp.2163–2187.
Flören, R.H. and Karssing, E.D. (2000) ‘Goed-versus-goed dilemma’s en de opvolgingsparadox in familiebedrijven’, M&O, Vol. 1, p.45–62.
Freel, M.S. and Robson, P.J.A. (2004) ‘Small firm innovation, growth and performance: evidence from Scotland and Northern England’, International Small Business Journal, Vol. 22, No. 6, pp.561–575.
Geerts, A., Herrings, W. and Peek, M. (2004) ‘Change of ownership creates new prospects in SME sector’, SME Special 2004, ING Economics Department, Amsterdam.
Hall, R. (1992) ‘The strategic analysis of intangible resources’, Strategic Management
Journal, Vol. 13, pp.135–154.
Jensen, M., Meckling, W. (1976) Theory of the firm: managerial behaviour, agency costs and ownership structure. Journal of Financial Economics 3(4), 305-360.
Jones, O. and Macpherson, A. (2006) Inter-Organizational Learning and Strategic Renewal in SMEs. Long range planning 39, 155-175.
Langman, M.A. and Lugt, M.G.H. (2005) ‘Bedrijfsoverdrachten in het MKB, moeilijk of makkelijk? (SME-transfers, difficult or easy?)’, ING Bank, Amsterdam.
Lansberg, I. (1988) ‘The succession conspiracy’, Family Business Review, Vol. 1, No. 2, pp.119–143.
Le Breton-Miller, I., Miller, D. and Steier, L.P. (2004) ‘Toward an integrative model of effective FOB succession’, Entrepreneurship Theory and Practice, Vol. 28, No. 2, pp.305– 309.
Markman, G. and Baron, R. (2003) ‘Person-entrepreneurship fit: why some people are more successful as entrepreneur than others’, Human Resource Management Review, Vol. 13, No. 2, pp.281–301.
Meijaard, J., Uhlaner, L., Flören, R., Diephuis, B. and Sanders, B. (2005) ‘The relationship between successor and planning characteristics and the success of business transfer in Dutch SMEs’, EIM, Zoetermeer.
Morris, M.R., Williams, R.O., Allen, J.A. and Avila, R.A. (1997) ‘Correlates of success in family business transitions’, Journal of Business Venturing, Vol. 12, pp.385–401.
Nayyar, P. (1992) ‘Performance effects in three foci in service firms’, Academy of
Management Journal, Vol. 35, No. 5, pp.985–1009.
Nordqvist, M, Wnnberg, K, Bau, M, Hellerstedt, K. (2013) An entrepreneurial process perspective on succession in family firms, Small Business Economy, Vol. 40, 1087-1122
Porter, M.E. (1979) How competitive forces shape strategy. Harvard Business Review March-April 1979, 137-145.
Priem, R. and Butler, J. (2001) ‘Is the resource-based theory a useful perspective for strategic management research?’, Academy of Management Review, Vol. 26, No. 1, pp.22– 40.
Sull, D. (2004) Disciplined entrepreneurship. MIT Sloan Management Review, fall 2004, 71-77.
Tan, J.J. and Litschert, R.J. (1994) Environment-strategy relationship and its performance implications: An empirical study of the Chinese electronics industry, Strategic
Management Journal, vol 15, issue 1, 1-20
Teece, D.J., Pisano, G. and Shuen, A. (1997) ‘Dynamic capabilities and strategic management’, Strategic Management Journal, Vol. 18, No. 7, pp.509–533.
Thurik, R., Wennekers, S., Uhlaner, L. (2002) Entrepreneurship and economic performance: a macro perspective. International Journal of Entrepreneurship Education 1 (2), 157-179.
Ucbasaran, D, Wright, M. Westhead, P. (2003) A longitudinal study of habitual entrepreneurs: starters and acquirers, Entrepreneurship & Regional Development: An
International Journal, 15:3, 207-228
Van Praag, M. (2003). Business survival and success of young small business owners.
Small Business Economics 21 (1), 1-17.
Van Teeffelen, L. and Uhlaner, L. (2010) ‘Strategic renewal after ownership transfers in SMEs: do successors’ actions pay off?’, Int. J. Entrepreneurial Venturing, Vol. 2, Nos. 3/4, pp.347–365.
Verhees, F., Meulenberg, M. (2004) ‘Market orientations, innovativeness, product innovation and performance in small firms’, Journal of Small Business Management, Vol. 42, No. 2, pp.134–154.
Vermeulen, P., De Jong, J., O’Shaughnessy, K. (2005) ‘Identifying key determinants for new product introductions and firm performance in service SMEs’, The Service Industrial
Journal, Vol. 16, No. 3, pp.88–94.
Wagner, J. (2006) Are nascent entrepreneurs ‘Jack-of-all-trades’? A test of Lazear’s theory of entrepreneurship with German data. Applied Economics 38, 2415-2419.
Wolff, J. and Pett, T. (2006) ‘Small-firm performance: modeling the role of product and process improvements’, Journal of Small Business Management, Vol. 44, No. 2, pp.268– 284.
