Antecedents of SME employer intentions to
participate in the labor mobility network
Werkboulevard
December, 2009
M.H.T. de Wijkerslooth de Weerdesteijn
Student Number: 1337297
University of Groningen
MscBA, Faculty of Economics and Business
Meerhuizenplein 28L, 1078 TD Amsterdam
Tel.:+31 (0)648495587
e-mail:
Michieldew@hotmail.com
University Supervisor:
M. Brand
Second Assessor:
Field of Study Supervisor:
R. Esser
Abstract
Table of Contents 1. Introduction 3 1.1 Werkboulevard 4 1.2 Main Issue 5 1.3 Intention 6 2. Theory 7
2.1 Ajzens Theory of Planned Behavior 7
2.2 Labor mobility network and Small and Medium Sized enterprise characteristics 8
2.2.1 LMN Characteristics 9
2.2.1.1 HR-Outsourcing 9
2.2.1.2 The rate of adoption of an innovation 10
2.2.1.3 Cooperation 10
2.2.2 SME Characteristics 11
2.2.2.1 SME views on Cooperation 11
2.2.2.2 SME views on HR-Outsourcing 12
2.2.2.3 SME views on innovation 13
2.2.3 Trust 13 2.3 Conceptual model 14 3. Method 16 3.1 Procedure 16 3.2 Sample 16 3.3 Measure 16 3.4 Analytical method 17 4. Results 19
4.1 Werkboulevard’s (LMN) characteristics results 19
4.1.1 HR-Outsourcing 19
4.1.2 The rate of adoption of an innovation 20
4.1.3 Cooperation 21
4.2 SME Characteristics result 21
4.2.1 SME views on HR-Outsourcing 21
4.2.2 SME views on innovation 21
4.2.3 SME views on Cooperation 22
4.3 Trust 23 5. Discussion 24 5.1 LMN Characteristics 24 5.2 SME Characteristics 24 5.3 Trust 25 6. Conclusion 26 6.1 Recommendations 26
6.2 Limitations and directions for future research 27
1. Introduction
At the moment the world is coping with an economic crisis and large numbers of employees have been layed-off to avoid bankruptcies. As a result, the Netherlands now faces rising unemployment levels and a growing need for alternatives to the “forced lay-offs” and the corresponding (human) costs. A development that may challenge the increasing unemployment levels and simultaneously increase an organizations competitive position is the rise of so called labor mobility networks (LMNs). In current literature LMNs have not been defined. However, two forms of labor mobility have. These two forms are inter- and intra –sector mobility. First of all, inter-sector labor mobility has been defined by De Koning et al (2003) as “a career path in which employees can shift to an occupation in a different sector that is attuned to their capabilities”. Considering the definition of inter-sector mobility, the definition of intra-sector labor mobility is “a career path in which employees can shift to an occupation in the same intra-sector that is (more) attuned to their capabilities”. However, as Prins et al (2007) have already pointed out, the term “sector” is rather ambiguous and thus needs further explaining. In the context of this paper, a “sector” can be defined as “a distinct part of the economy where businesses share the same or related products or services” (Oxford English dictionary). From the definitions of inter- and intra-sector mobility, a definition of a labor mobility network can be deduced:
An approach to labor mobility in which a collection of cooperating employers relies on a central organization to shift employees to a different occupation (inter- and intra-sectorally) that is (more) attuned to their capabilities and the organizations.
Due to the ambiguity surrounding the definition of inter-/intra-sector labor mobility, the organizations that call themselves labor mobility networks are diverse. However, they are all based on the idea that leaders of firms have a common interest in the health of their industry (Nalebuff and Brandenburger 1996 (boek strategy and HRM pg 230)) and, therefore, collaborate in areas were mutual gains can be found such as the labor market (Boxall, Purcell 2008). The specific mutual gain that these labor mobility networks strive to create is “sustainable employability” in a geographic region or industry by offering employees “work certainty” instead of the more conventional “job certainty” (Prins, 2007 Loopbanen Zonder Grenzen). Instead of simply offering one job in one organization, work certainty offers the employee life-time work in the network of collaborating organizations. Employers do not fire employees but use the network to flexibly cooperate with other employers to shift their redundant employees to other organizations. Therefore, by implementing a successful labor mobility network, businesses can minimize forced lay-offs. Inside the network a central organization provides the administrative support to guide the employees from one organization to the other. In addition, it coordinates the training programs that cross-train employees so that they can be placed in a new occupation and develops programs to fulfill mutual benefits. An example of this is the development of a strong collective network “brand”. Potential employees are attracted to the benefits of the collective network instead of just the benefits offered by one organization.
evaluation of twelve government funded pilot-labor mobility networks in the Netherlands. The bridge spans from one employer to another, bridging the supply and demand of (intra and inter sectoral) labor. The results indicated that there are five factors that form the “foundation” of the bridge. These are general environmental factors that can limit or aid the more important “pillars”. Social support, for example, is the first of these general elements and represents society’s acceptance of flexible employability. These general environmental factors will not be covered in this paper because they are not directly related to activities of a labor mobility network but play a more indirect or mediating role in labor mobility in general. On the other hand, the three “pillars” that stand on this foundation take a key position in this paper and are directly related to the activities of the parties in the labor mobility network. These pillars must be sufficiently dealt with if a LMN is to create labor mobility in its network. The first “Psychosocial and cultural” pillar includes psychological and social factors, for an employee and the employer, that are a result of a job transition. This includes cultural circumstances like differences in values/norms between organizations. The second and third pillars are more practical in nature and include issues on how the transition is to be financed, judicial questions (like employee rights) and how the employees capabilities can be attuned to the needs of his/her new employer.
Figure 1: The labor mobility bridge (Ijsenbrant, Dun, De Groot 2005)
1.1 Werkboulevard
One of the labor mobility networks that is struggling with these issues is called Werkboulevard which was initiated in 2006 by two employers’ associations and several local government authorities in the Eindhoven region (see appendix 1) as a non-commercial pilot-project. It strives to become the Human Resources Management “support point” for all of the employers in the business districts De Hurk, De Run, Best and Acht in and around Eindhoven. Apart from providing advice and best practices on human resource issues, the primary service that Werkboulevard provides is facilitating the transition of employees from one business to the other. Nevertheless, Werkboulevard clearly states that it is not an outplacement bureau, an employment agency or a CV-database. Instead, it hopes to create a
Economic sector support
cooperative interrelationship between the 1000 different organizations (mostly small and middle sized enterprises (SME’s)) that work in the four business districts so that they can efficiently and flexibly use the 45,000 joint employees. Through this collaborative relationship, Werkboulevard hopes to achieve the sustainable employability mentioned earlier and reduce costs (financial and non-financial) for the employers at the same time.
The success of a LMN like Werkboulevard depends on the active participation of both the employers and the employees (Prins & Zwart 2007, Ijsenbrant 2005). For example, the employers must select employees that can be transferred to another job and the employees must be willing to change their job. Werkboulevard has been running for some time now, it has not been able to get a sufficient number of SME employers to actively participate in the project which logically means there are also few employees in the project. The lack of employer participation is the main problem facing Werkboulevard and is related to two issues. First, the SME employers are not registering their excess employees in the Werkboulevard’s system. Second, there is also too little demand for employees in the system from the SME’s. As Bax (2003) described it, Werkboulevard has not been able to achieve the “core task of HRM” which he describes as balancing the quantity and quality of the demand and supply of labor.
Previous research on SME participation in LMNs has focused on the employee. The elements in the labor mobility bridge have been applied to the employee and the elements that push or inhibit employees to be “mobile” have been charted. There are, for instance, psychological and material factors that influence their ability and motivation to participate in a LMN. For example, Prins & Zwart (2007) found that employees are strongly committed to their work and as a result will not switch jobs easily. This is strengthened by the employees’ strong sense of pride in their profession. Ijsenbrant (2005) concluded that employees are afraid that they will earn less in their new job and are afraid of losing their right to social benefits or welfare (like the VUT, WAO and WW). Even if an employee is considering participation, this is often resisted by the SME employer and de employees’ social environment (family and friends) (Prins & Zwart 2007). Finally, there seems to be a lack of general “awareness” of the benefits and opportunities that a LMN can offer (Prins 2007, Ijsenbrant 2005, Bongers & Beckers 2007).
Though the factors that influence the employees are relatively clear, the factors in the labor mobility bridge that influence SME employer participation have barely been investigated. This was also Sherer’s (2003) conclusion who found that “there has been a lack of research examining the critical factors affecting networking within small and medium enterprises (SME’s)”. Therefore, the focus in this paper will be on the variables that influence the employers to participate in mobility network projects such as Werkboulevard. Most of these employers are SME’s.
1.2 Main issue
because employers lack psychological intention to participate, despite the fact that they acknowledge the potential benefits and opportunities that these projects can offer.
Therefore, the literature suggests that the main psychosocial issue causing the low participation levels is the fact that, even though the SME’s acknowledge that they could benefit from it, they still have no actual intention of using Werkboulevard. The employers lack sufficient psychological motivational stimulus to develop the actual intention to participate.
To further confirm these findings, I spoke with SMEs and people involved in Werkboulevard. These interviews further confirm that the employers acknowledge the benefits, but lack the motivational intention to actually participate. In the interviews with businesses (see appendix 3) there was a high level of trust in the potential benefits of Werkboulevard , but the SME’s indicated that they did not have a “need” for Werkboulevard’s services. Hence, the respondents are convinced that Werkboulevard has benefits, but they do not intend to use it. In the interviews with people that are or were involved in the project this factor was also dominant. Each one of them mentioned that SME’s understand the benefits and opportunities that Werkboulevard offers but still do not have the intention to participate themselves.
1.3 Intention
The term intention used in this paper derives from Ajzen (1991) who describes it as, “Intentions are assumed to capture the motivational factors that influence behavior; they are indications of how hard people are willing to try, of how much of an effort they are willing to exert, in order to perform the behavior”. So, the intention of the SME’s to participate in Werkboulevard influences whether or not they actually participate.
Apart from intention, Ajzen (1991) adds that there is another factor needed if a behavior is to take place. If an individual is to perform a certain behavior he or she must not only have the intention but also what Ajzen (1991) calls “actual control of the behavior” which includes such non-motivational factors as adequate time, money and skills. Thus, Ajzen concludes that “behavioral achievement depends jointly on motivation (intention) and ability (actual behavioral control)”. Ajzens findings are in line with the labor mobility bridge that also directly points out psychosocial elements in the first pillar and indirectly points out the “actual control” elements in the second “Financial and judicial” pillar and third “Capabilities and schooling” pillar.
To my knowledge, there is little evidence that the low participation levels of the SME’s is caused by the “Actual control variables”. As presented above, the literature and research done by Werkboulevard emphasizes psychological factors related to intention. In addition, SME’s that Werkboulevard is targeting also acknowledge that they have the ability to participate, therefore, they themselves believe that they have sufficient “actual behavioral control” to participate. As a result, the lack of motivational intention to perform the behavior is probably the primary factor that limits participation.
2. Theory
Deciding whether or not to participate in a project is an outcome of organizational decision-making. The organizational decision-making process is controlled by organizational behavior, which according to according to Kreitner & Kinicki (2002) can be divided into three types; individual, group and organizational behavior. Rissieeuw & Thurik (2003) states that in SME’s, “The personal objectives of the entrepreneur become the mission of the organization”. Therefore, in SME’s, the decision-making authority typically lies on the individual level. It is not as complex as in large organizations where the decision-making authority is more dispersed. Therefore, when analyzing an SME’s decision-making process it is best to apply a model that focuses on the factors that influence the SME’s owner/director as an individual. Models like the “Incremental Decision Process” (Mintzberg et al 1976) are not very appropriate for discussing SME behavior because they exclude individual elements and instead only discuss such broad phases as “diagnosis”, “design”, “bargaining” and “authorization”.
Apart from analyzing on the individual level, there is another condition that must be fulfilled when analyzing how an SME’s director develops the intention to participate in a project. The model used must also describe the motivational antecedents of that intention. Some models fail to discuss these, for example, the “Consumer decision-making process model” by Blackwell et al (2001) starts with “Need recognition/problem awareness” but excludes the cause of that need. Without an analysis of the antecedents one cannot understand how intentions form.
2.1 Ajzens Theory of Planned Behavior
Ajzen (1991) developed a model that is focused on the individual and discusses the antecedents of an intention. The model is called the Theory of Planned Behavior (figure 2) and clearly describes the factors that affect the intention of an individual to perform a certain behavior which then leads to the execution of that behavior.
Fig. 2. The influence patterns in the Theory of Planned Behavior. ATT =Attitude towards the behavior; SN= Subjective norm; PBC = Perceived behavioral control; INT = Intention to perform a behavior (e.g., to adopt innovations). Source: Adapted from Caprara et al. (2000), p. 116.
as the subjective (positive or negative) predisposition towards the behavior. The second variable, the
subjective norm, is defined as “the perception of a social pressure to perform such a behavior that is
exerted on the decision-maker by his/her relevant others”. Finally, the perceived behavioral control is defined as, “the perception of the ease (or difficulty) to perform the behavior”. If these variables are sufficiently stimulated they will lead to an intention to behave in a certain manner.
The Theory of Planned Behavior has been criticized in the past. Hooft et al (2005) for instance agree with the antecedents of the intentions but they state that the model misses some of the factors that link intention with behavior and propose that action control theory and procrastination are needed to fully understand this relation. Also, one may doubt whether a model designed for analyzing the individual can be applied to analyze the intentions and behavior of organizations. However, numerous authors have successfully applied the Theory of Planned Behavior as a theoretical framework, even in an organizational setting (Marcati et al 2008). For example, Wilson (1975) proved the validity of the basic model to predict technical purchasing behaviors in organizational contexts. Another example is Marcati (2008), who used the intention and actual adoption of an innovation to illustrate the use of the model in an organizational context. Finally, Elliot et al (1995) even applied the model to study corporate decision making. Thus, the model can be used as a theoretical framework for organizational contexts. Considering that the model can be used in general organizational decision making and is focused on the individual, it can be applied to study how an SME director develops an intention to participate in a labor mobility network.
Therefore, I posit that the model can be used as a theoretical framework for studying the antecedents of the intentions of SME’s participation or rejection of LMNs. The variables in the framework will be able to explain how SME owners’/employers’ beliefs and intentions cause certain behaviors (the participation in or rejection of a mobility network). The factors that affect the three variables ATT, SN and PBC must therefore be charted for mobility networks if one is to find out what helps and what hinders the development of intentions and the desired behavior (active participation in a mobility network).
2.2 Labor mobility network (LMN) and Small and medium sized enterprise (SME)
characteristics
From the definition of a labor mobility network (section 1.1) one can derive the three main characteristics of a LMN, which are cooperation (with and between businesses), HR-outsourcing and
innovation. Cooperation between the businesses and the LMN organization is constantly required in the
As was discussed previously, this paper specifically focuses on the variables that influence SME owners/employers. SME’s have very typical attributes (Daft 2000). Therefore, apart from the factors related to the labor mobility network itself, attention must also be given to typical SME characteristics. Small enterprises are very different from larger enterprises. A small enterprise is typically responsive, organic, simple and niche finding, while a larger enterprise uses economies of scale, is mechanistic, complex and operates in a stable market (Byre 1989). Thus, it is expected that some of the SME characteristics will also directly affect the antecedents of the intention to participate. The characteristics that are expected to influence these antecedents the strongest are those that can be linked to the three characteristics of a LMN. These are typical SME views on cooperation, HR-outsourcing and innovation.
Therefore, the factors related to the characteristics of a labor mobility network affect the degree to which organizations in general intend to participate in the network and the additional factors related to the characteristics of the SME’s affect the degree to which SME’s intend to participate. Thus, both the LMN and the SME characteristics may be antecedents of attitude, subjective norm and perceived behavioral control which cause an intention to participate in a LMN.
Finally, apart from the direct characteristics, attention will also be given to trust. Trust will be identified as a significant variable that moderates the degree of success of both the LMN and the SME characteristics, which, will also moderate the formation of attitudes, subjective norms and perceived behavioral control (Klein Woolthuis & Nooteboom 2003, Brunetto & Farr-Wharton 2007, Klaas 2003). 2.2.1 LMN Characteristics
2.2.1.1 HR-outsourcing
Labor mobility networks offer to take over a function (predominantly the human resource (HR) functions) in an organization. The transition of employees between organizations is coordinated by a central organization. According to Greer, Youngblood and Gray (1999) there are several potential benefits to outsourcing HR functions. HR-outsourcing lets the organization focus on its “core-competences”, it gives organizations the expertise of a specialized organization, through “vendor efficiencies” it can reduce costs/time and it enables decentralized structures which reduce bureaucracy and spurs innovation and flexibility.
However, Adler (2004) emphasizes that there are also many “risks and hurdles” to HR-outsourcing. He names six factors:
1. Dependency risks: If an organization has to adapt its operations to do business with the supplier, it may become dependent on it and thus also become vulnerable. The dependency risk was is also a factor stressed by Klaas (2003).
2. Spillover risks: Working together with an outside supplier may result in confidential information being leaked, potentially even to competitors.
3. Trust: Is required as a result of the dependency and spillover risks. Instead of relying on an expensive and time-consuming contract, trust is a better option. However, trust is not unconditional.
4. Relative proficiency: Especially larger organizations should compare their efficiency with that of the vendor and examine if it is “sufficiently strategic” to outsource.
similar conclusions. They say that an organization should outsource one of its functions if the organizations lacks the “strategic resources” to fulfill the function itself (see Appendix 2).
6. Commitment versus flexibility: Commitment to a function sends a strong message, namely that you tend to compete in that function, to competitors. But flexibility can also be required if there is a lot of uncertainty surrounding the function, e.g. if the function is unsuccessful. In deciding whether or not to outsource, a business will have to consider both of them.
In addition, Scholl (2002) surveyed 125 companies and found that the main factors that discourage HR-outsourcing are perceived higher costs and lower quality and the fear of losing control. These factors align with Adlers (2004) dependency risks (losing control) and relative proficiency (perceived higher costs / lower quality).
Therefore, the findings by Adler (2004), Klaas (2003), Roy & Aubert (1999) and Scholl (2002) suggest that the decision to outsource the HR function involves many positive and negative variables. As a result, the factors may influence the beliefs and corresponding variables proposed by Ajzen (1991) in his Theory of planned behavior and it is expected that they will also influence an organizations intention to participate in a LMN. For example, in analyzing the “relative proficiency” of the LMN, the organizations past experiences and coinciding positive or negative attitudes will influence its judgment. Another example is the negative attitude towards HR-outsourcing due to the perceived higher costs and lower quality.
2.2.1.2 The rate of adoption of an innovation
In section 2.2 we saw that labor mobility networks are innovative projects according to Rogers’ (1998) definition of innovation: “the application of new ideas to the products, processes or any other aspect of a firm’s activities”. Innovation as a characteristic of a LMN will, according to Rogers (1998), affects the rate of adoption of that project. He describes five factors that affect the rate of adoption of an innovative in products or services:
1. Differential advantage: the added benefit to the customer. This can also be a psychological advantage as, for example, a status symbol (Daniel 2001).
2. Compatibility; with peoples values, experiences, lifestyles and behaviors.
3. Complexity; how difficult or hard to understand an innovation is. De Leeuw (2000) further describes complexity as a factor of the number of interdependencies between variables and the uncertainty, controllability and heterogeneity of those variables.
4. Communicability; how easily the benefits can be observed and explained. 5. Divisibility; the degree to which the product can be tried in a limited basis.
These factors may influence the intention to participate in a LMN. Complexity, for example, aligns well with the perceived behavioral control variable in Ajzens model (1998) because it influences the “ease of use”. Another example is compatibility, which will influence the subjective norm. They are both measures of social values/norms. A final example is differential advantage and attitude. If a LMN creates differential advantage for an organization, this will stimulate a positive attitude towards it. Therefore, these variables may influence the antecedents of the intention to perform a certain behavior. 2.2.1.3 Cooperation
products/services (Daft 2001). Oliver (1990) even adds that “Cooperation is a prerequisite for greater innovation, problem solving, and performance”. However, there are several risks involved in cooperative relationship between organizations. Ring and Van de Ven (1992) discussed several risks involved in cooperation between organizations. These all occur when there is uncertainty surrounding decision-making and accomplishing tasks that require cooperation with other organizations. The risks Ring and Van de Ven (1992) discuss are:
1. Commercial risk: the probabilities of finding 'price-performance niches' in the market 2. Technological risk: lack of fundamental technology
3. Scientific uncertainty: lack of fundamental knowledge 4. Engineering uncertainty: does the technology work?
5. Corporate risk: business wide risks as a result of, for example, a merger.
Apart from overcoming these types of uncertainty, Ring and Van de Ven (1992) identified trust (which was defined as “confidence in the other's goodwill” Friedman, (1991)) as the other main factor that determines whether or not a cooperative relationship will be successful. If the transactions between parties cannot be simultaneous, then a certain level of trust is necessary in cooperative relationships between organizations (Ring and Van de Ven).
There is a diverse array of risks involved in cooperation between organizations. Those named here are but a sample of possible risks. These risks may influence the intention of a SME to cooperate with other organizations. There may be a negative attitude towards cooperation due to the many risks. In addition, the necessary trust will influence how easily decision and transactions can be made. Thus, influencing the “ease of use” (perceived behavioral control).
2.2.2 SME Characteristics
Apart from the general characteristics derived from the LMN itself, there are also characteristics that can be derived from the LMNs target group, the SME’s. The typical SME characteristics will be described next. The first factors that will be discussed are SME views on cooperation and HR-outsourcing. Next, typical SME views on innovation will be covered and finally, the factor trust will be discussed which has certain moderating characteristics.
2.2.2.1 SME views on Cooperation
SME’s can benefit from cooperating with each other. Pyke et al (1992) even state that, by flexibly sharing competencies and capabilities, SME’s could make a joint response to market demand, which is the main reason for the SME industrial success in Italy, Portugal and Germany. An example of the benefits that cooperation can give an SME is that they can share investment risks (Commandeur, 1994) or gain access to knowledge and new markets (Lorraine et al 2003).
Woolthuis & Nooteboom (2003) describe four factors that may further explain this negative attitude towards cooperation. These factors are:
1. Risks: Dependency issues and “spillover-problems” of sensitive/competitive information. The factor risk was also identified by Brunetto (2007) who identified “Commercial confidentiality” as a major “problem theme” for collaboration.
2. Leadership issues: Authority, control, sanctions and procedures (comparable to the issues surrounding autonomy).
3. Cultural differences: Values, beliefs and norms like risk tendency, investment priorities, forms of communication and even ethical beliefs may differ among SME’s. In addition, Marceau (1996) even argues that SME’s lack a “collaborative culture” altogether, which further makes cooperation difficult.
4. Rigidness and habit: Resistance to new ideas, processes and techniques. This definition is almost the exact opposite of the definition of innovation used in this paper; “the application of new ideas to the products, processes or any other aspect of a firm’s activities” Rogers (1998).
Thus, due to the need for autonomy and the four factors described above, there seems to be a negative
attitude towards cooperation between SME’s. Apart from a general negative attitude towards
cooperation, cooperation may also influence the variables subjective norm and perceived behavioral
control. Elliot et al (1995) for example, showed that the organizational or corporate culture can be
treated as “a proxy of the subjective norm”. They defined the corporate culture as “as all shared values and beliefs that help individuals to understand how the organization where they work functions”. This definition is comparable to Woolthuis & Nooteboom’s (2003) definition of the factor “Cultural
differences” presented above. Therefore, these “Cultural differences” may influence the subjective
norm. The perceived behavioral control or “ease of use” (Ajzen 1998) can be influenced by the
“leadership issues”. The degree to which the “authority, control, sanctions and procedures” are in place will enable or hamper a fluid/stable relationship between collaborating parties.
2.2.2.2 SME views on HR-outsourcing
Apart from the general barriers that may cause resistance to HR-outsourcing, there are also SME specific factors that must be taken into account. First, the typical SME views on cooperation may not only hinder cooperation between SME’s but may also hinder cooperation with an “outside” vendor of HR services. Due to the need for autonomy, risks, leadership issues, cultural differences and rigidness/habit, the outsourcing of an SME’s HR functions may also be difficult to implement.
Furthermore, Klaas (2003) wrote an article that discusses the barriers that specifically SME’s encounter when considering HR-outsourcing. First of all, questions were raised whether an organization that offers to provide HR-services to an SME can tailor to the specific needs of all its many different small and medium sized enterprises. Secondly, Klaas (2003) questions whether the services will have added strategic advantage for SME’s considering the fact that the same services are provided to many SME’s that may even be direct competitors. Finally, he stresses that dependency risks are especially high for SME’s because there is often the need to make “asset specific investments” and these are relatively high for SME’s.
inability to tailor to the specific needs of SME’s may influence their perceived behavioral control because it may influence the “perceived ease of use” because the service is not attuned to their needs.
2.2.2.3 SME views on innovation
In the section 2.2 and section 2.2.1.2, the definition of innovation was presented as: “the application of new ideas to the products, processes or any other aspect of a firm’s activities” (Rogers 1998). This type of innovation is crucial for the growth of an organization, especially in SME’s (Shane and Venkataraman 2000). Nooteboom (2003) even states that and innovative or niche strategy is one of the “core strategies” of most SME’s due to their small scale, independence and unique personality. But, SME’s differ in their type of innovation from, for example, larger organizations. SME’s are more inclined to apply small applications of larger (more fundamental innovations) and will usually focus these innovations on new products or services. This differs from innovations in larger organizations which are typically more complex and systemic (Rosegger 1980).
Bodewes and De Jong (2003) add that the degree to which an SME is innovative is highly dependent on the degree to which its owner/director is innovative and creates an innovative culture. Furthermore, according to Donckels and Frolich (1991) the director mind-set will have a strong impact on the firms’ strategy, and so, “any attempt to investigate innovation in SME’s ought to include an analysis of the characteristics of the director”. Finally, Marcati et al (2008) concluded that directors “innovativeness and personality play a key role in the adoption of innovations in Small- and Medium-sized Enterprises (SME’s)”. Therefore, it is interesting to look at the typical SME director mind-set or personality and its effects on innovation.
In the context of labor mobility networks, there are some distinct characteristics regarding innovation. Johannissons (1986) concluded that in an SME’s “awareness process” the owners/directors rely on their personal network and competitors to evaluate the potential or risk involved in an innovation. Next SME’s will rely on their suppliers and customers. Only after all these other actors have been consulted will an SME finally rely on the government to evaluate the risk of an innovation. These findings are supported by Massa and Testas (2008) conclusion that SME’s rely on their peers, other SME’s and/or their social network to innovate. Therefore, an SME is less inclined to rely on an “outside” government affiliated organization like most LMNs.
Furthermore, Massa & Testa (2008) even found that SME’s believe that intermediaries (such as labor mobility networks) are not a good source of innovation. One of the entrepreneurs they interviewed said: “If an entrepreneur is smart he is able to use stimuli from suppliers, customers and
consultants to innovate. Interacting with a “nurse”, like a Science Park or an intermediary is time consuming!”.
Therefore, whether an SME’s director has a personality or mind-set that has a positive or negative “attitude” towards innovative will influence if the SME’s intention to participate. In addition, there seems to be a negative predisposition (attitude) towards the use of government affiliated organizations and intermediary organizations in general as a source for innovation in SME’s.
2.2.3 Trust
this context, due to the fact that most participants are SME’s, the factor trust also has specific SME characteristics. Finally, trust is also a relevant factor in SME/LMN relationship due to the implications of Williamsons (1979) transaction cost theory. The theory assumes that a vendor (like a LMN) is economically motivated and, as such, will behave in a way that fulfills its self-interests. Therefore, the SME’s that employ a vendor will be wary of possible opportunistic behavior by that vendor and may be hesitant to join a network organization (Klaas 2003).
However, according to social exchange theorists such as Blau (1964) vendors and buyers can develop a relationship over time based on “frequent and open communication and a willingness to adjust to the needs of the other party”. Klaas (2003) states that this “relational trust” will moderate the effects of opportunism in the relationship between a “professional employer organization” (similar to a LMN) and SME’s. Therefore, relational trust can play a moderating role in the SME-network relationship and is also emphasized by Brunetto & Farr-Wharton (2007) who conclude that “trust is a significant factor moderating the way SME owners/managers perceive the potential benefits of networks”. Keeble and Wilkinson (1999) argued that the amount to which an SME benefits from a network depends on the degree of “collective learning, which involves building trust, a culture of consensus and shared goals and values”. Hence, they also state that trust is a factor in SME network success. Furthermore, several authors also stress the importance of strong interpersonal relationships in building a solid trusting relationship. Klaas (2003) says that “whether trust emerges between SME’s and professional employer organizations (PEO) will depend on the interaction between their representatives”. Zaheer, McEvily and Perrone (1998) also emphasize the importance of interpersonal trust. They state that previous research has failed to acknowledge the importance of trust between individuals.
Klein Woolthuis & Nooteboom (2003) combine the theory by Williamson and the social exchange theories. They argue that for cooperation, not only trust between people (inter-personal / relational trust) is required, but they must also trust the organization itself. An organization may trust the manager they interact with but not the larger organization. Therefore, one can conclude that trust can be a significant moderating variable in an SME’s decision to participate in a LMN because the implications of transaction cost and social exchange theory.
Trust can be linked to all the variables in Ajzens model. Trust affects the SME’s attitude and
perception of behavioral control in HR-outsourcing and cooperation. In HR-outsourcing it is one of the
variables that may hinder successful outsourcing. In cooperation trust enables a smooth relationship between SME and LMN because they rely on trust (developed through past behaviors and experiences) to assess future behaviors (Brunetto 2007). In both cases, trust makes the relationship “easier” which influences the perceived behavioral control. Furthermore, positive or negative “past experiences” will clearly also influence the attitude towards a LMN.
2.3 Conceptual Model
model, but have been excluded from the area that will be investigated. Though the “Actual control variables” may play a role in SME participation, the focus of this paper is on the factors that create the intention to participate.
Figure 3: Conceptual model
Based on the literature it is expected that the LMN and the SME characteristics positively and negatively influence an SME directors’ attitude, subjective norm and perceived behavioral control that are antecedents of his/her intention to participate in a LMN. This assumption will be empirically tested in the SME’s that Werkboulevard is targeting. To come to successful conclusions, the following sub-questions must be answered:
• How do the LMN characteristics HR-outsourcing, innovation, (SME) cooperation and trust influence an SME directors’ attitude, subjective norm and perceived behavioral control that produces his/her intention to participate in a LMN.
• How do the SME directors’ specific views on cooperation, HR-outsourcing, innovation and trust influence an SME directors’ attitude, subjective norm and perceived behavioral control that produces his/her intention to participate in a LMN.
The findings on these sub-questions will be presented in the results section and analyzed in the discussion section. ATT SN PBC Participation Intention LMN Characteristics: • HR-outsourcing • Innovation (rate of adoption) • (SME) cooperation • Trust SME Characteristics: • Views on HR-outsourcing • Views on Innovation • Views on Cooperation • Trust
Actual control variables: • Employee cooperation • Material resources
3. Method
3.1 Procedure
To answer the research question, the information in this paper will be predominantly gathered through qualitative interviews. Due to the novelty and complexity surrounding mobility networks, interviews are the most appropriate tool to gather information because standardized questions have not been developed. In addition, many of the questions are related to the individuals’ beliefs or values (for example, “Do you have faith in the potential of LMNs?”), cannot easily be scaled. The qualitative interviews comprised of open and closed questions like, “What are the disadvantages of collaborating with competing firms?” and “Has your business participated in the Werkboulevard project?”. The interviews were conducted in the SME’s’ business or the person’s office or home and were face-to-face. Each interview took approximately 1.5-2 hours and was carried out in Dutch.
3.2 Sample
There are several stakeholders involved in Werkboulevard: Werkboulevard’s management, the employer/employee associations, local authorities and the SME’s that Werkboulevard is targeting. To collect a broad array of views and perspectives, all these stakeholders were interviewed. A list of these people can be found in appendix 1. To get as much information as possible, seven separate interviews were prepared for the different stakeholders. Two project leaders, two government officials, a representative from the employer association, a representative from employee association each got a “tailor-made” interview. These people were all involved in the development of Werkboulevard, either as a co-financer of the project or as it management.
In addition, a single questionnaire was developed for the eight SME employers in the Eindhoven area. To ensure that several perspectives were collected, three strata were defined from which a convenience selection was drawn. The three strata are:
• SME’s that were skeptical of Werkboulevard’s potential (2 SME’s).
• SME’s that recognized Werkboulevard’s potential but had not yet used it (4 SME’s). • SME’s that recognized Werkboulevard’s potential and had used it (2 SME’s).
The information for these strata had been previously collected by Werkboulevard’s employees from their interaction with the SME’s. These strata were based on their views toward Werkboulevard and their behavior (whether or not they used the system). The SME’s that recognized Werkboulevard’s potential but had not used it were given extra attention because it was this group of SME’s that was thought to have the greatest chance of becoming participants. In addition, it is likely that these SME’s lack the “motivational intention” to participate which is the topic of this paper. To ensure that I could interview these SME’s, the Werkboulevard employees approached the SME’s for me.
3.3 Measures
The interview with the SME employers was roughly divided into four sections, the introduction, a section about the business itself, a section about Werkboulevard and finally a section about cooperation (in general and in LMNs). Many questions were asked about Werkboulevard’s (LMN) characteristics and SME specific characteristics which may be antecedents of the intention to participate in a LMN. These factors are listed in the conceptual model and are: HR-outsourcing, innovation, cooperation, trust and specific SME views on these factors. If sufficient information can be found on these factors then the research question can be answered.
interviewees that their answers would be kept anonymous. After the introduction, questions were asked to measure the LMN and SME characteristics.
Information on HR-outsourcing was collected through questions related to Adlers (2004) six factors and the factors discussed by Klaas (2003). For example, to chart the perception of risk questions were asked if they were afraid that confidential information may be leaked or if they feared losing their scarce employees. Another example are the questions for the view on the relative proficiency like “Do you have a need for Werkboulevard’s services” or “Why haven’t you used Werkboulevard’s services up till now?”.
Information on the five factors that influence the rate of adoption of an innovation (Rogers 1998) and information on the SME’s specific view on innovation was collected using several questions spread throughout the entire interview. “How clear was the information/offer presented to you by Werkboulevard?” is an example of a question used to measure the communicability factor of innovation and from questions like “What are the possible benefits that Werkboulevard could provide?” one can extract the level of “complexity” (How difficult to understand the innovation is). To measure the SME’s view on innovation, questions like “Is innovation an important strategic factor in your business” were asked which specifically gauges the SME’s directors’ tendency to be innovative.
To gain insight into the influence of cooperation and HR-outsourcing on their intention to participate, a separate section of the interview dealt the factors influencing cooperation between SME’s and between SME’s and Werkboulevard. Questions were asked to measure the four factors that influence cooperation (Woolthuis & Nooteboom 203). For example, to measure the risk dimension, questions like “Do you think cooperating with other businesses involves any risks?” were asked and to measure the cultural dimension questions like, “Do you think your employees could easily adapt to working in another organization?” were asked. To measure their need for autonomy I asked if they had previously participated in a cooperative project with other SME’s.
Finally, the factors that influence trust in the organization and it employees was deduced from questions like, “Do you think Werkboulevard will be successful in 2-3 years, when the economic crisis is over?”. The interpersonal trust was measured with questions like, “How did you receive information from Werkboulevard?”.
The interviews with the six people involved in the Werkboulevard project added to the measures from the interviews with the SME’s. The interviews with these six people included many of the same questions as the interviews with the SME’s. However, depending on the person’s job or field of experience questions were added or removed from the interview. For example, in the interview with the man from the employee association I added the question, “Do you think that the employees have been adequately involved in the project?” and in the interview with the government employees I asked “In what areas can the approach applied by Werkboulevard’s management be improved?”.
3.4 Analytical method
To find out in which degree the LMN and SME characteristics influence the SME director’s intention to participate in Werkboulevard, an attempt will be made to find causal relationships between the LMN and SME characteristics and the three variables that produce intention. Specifically, these causal relations will be found by analysing the degree to which the LMN and SME characteristics influence the director’s:
• Subjective positive or negative predisposition (attitude) towards Werkboulevard • Perception of social pressures (subjective norm) about Werkboulevard
4. Results
In the conceptual model two main factors influence the development of an intention to participate. These are the LMN and SME characteristics: HR-outsourcing, innovation, cooperation, trust and the specific SME views on these factors. Information on these two areas was collected in the interviews. First the results of Werkboulevard’s (LMN) characteristics will be presented, which will then be followed by the results on the SME characteristics. In the discussion chapter these results will be analyzed and discussed further.
4.1 Werkboulevard’s (LMN) characteristics results 4.1.1 HR-Outsourcing
On the six factors from Adler (2004) the following results were found from the interviews. First, the SME’s were not afraid of competitive risks like dependency risk and spill-over risks. SME’s did not think that participation in Werkboulevard would result in opportunistic behavior from the vendor (Werkboulevard) or other SME’s, including direct competitors. For example, to the question: “Do you think cooperation through Werkboulevard could lead to confidential information being leaked” only one SME thought that that could be a problem.
Almost all of the businesses that Werkboulevard is targeting are SME’s and are therefore more likely to benefit from outsourcing than larger companies because they usually have lower relative proficiencies. However, the SME’s indicated that they did not need Werkboulevard services because they were “relatively proficient” enough themselves or there were other substitutes to Werkboulevard that they had (successfully) used in the past. For example, one business said “I’ve never seen any painters on the site. If they have painters I will use it. Now I use a specialized agency, they do have painters”. Another SME said, “The UWZ offers employees for free, Werkboulevard can’t compete with that”. In addition, even the SME’s that tried Werkboulevard were not always satisfied. For example, “I have a need for the services Werkboulevard offers, so I looked on their website. But, they only offered a few employees and not the kind I need. So, because of this negative experience, my interest stopped”.
Most of the SME’s and people involved in Werkboulevard indicated that the in and outflow of employees was not one of the SME’s strategic capabilities that “created strategic advantage”. Most emphasized low-cost or high product quality strategies. Therefore, one would expect that they would be inclined to outsource their HR-functions. Another noteworthy result was that the people involved in Werkboulevard and several SME’s pointed out that the SME’s needed to focus on their “core business”. The SME’s had no time or money for “abstractions” like Werkboulevard, especially in the current poor economic climate. Therefore, the current SME strategic mind-set seems to avoid “non-core activities”. Finally, the SME’s thought that they had sufficient “strategic resources” to fulfill their HR-requirements.
uncertainty surrounding their HRM. Several SME’s are having trouble finding qualified employees especially, “that exceptional employee”. So there could be a need for flexibility so that they can make use of opportunities and deter threats.
* The variable trust and its specific effects in SME’s will be discussed separately in chapter 4.3. 4.1.2. Rate of adoption of an innovation:
The first factor that according to Rogers (1998) influences the rate of adoption of an innovation is differential advantage. Werkboulevard can provide a unique service to the businesses in the four industrial areas. Almost all of the businesses thought that they can benefit from it and that cooperation through such a network is desirable. This opinion was shared by the six people involved in the project.
Compatibility is the second factor. The interviews show that Werkboulevard is not completely
compatible with the SME’s“values, experiences, lifestyles and behaviors”. In the interviews, businesses indicated that they had rather ad hoc HR-strategies in which there was less room for long term planning (like career planning) which is required in a LMN. One of the businesses said “We don’t really have a HR-strategy, we have enough employees right now and when we need someone we will arrange something”. The lack of compatibility is supported by Prins & Zwarts (2007) findings that SME’s have cultures that are not used to the mutual consultation between employer and employee that is required in a LMN. They are not accustomed to this specific type of collaborative relationship. Warts (2007) add that this may be due to the fact that they do not have a professional human resources department.
According to people involved in the project, complexity is an important reason why it has been difficult to convince businesses to participate. If one applies De Leeuws (2000) definition of complexity on Werkboulevard, one can clearly see that it is complex because of two reasons. First because there are many areas that Werkboulevard wants to provide service in. Werkboulevard not only facilitates the transition of employees from one business to the other, it also gives advice/best practices, education and is working on forming a shared image or brand. Second, apart from there being many services, the services are also interrelated. For example, education is required so that employees can be placed in another organization where they can fulfill a job they recommended in their best practices. In the interviews with the SME’s another element around complexity was also described. One SME said that there are so many organizations that seem to want to “help” them that Werkboulevard has become part of “a bundle of organizations in which it is unclear who offers what and in who’s best interest”.
As a result of the high complexity of the projects it is also difficult to communicate what the benefits are. Even though there are benefits, there are no examples of similar projects that have been a success. However, the SME’s said the information they received from Werkboulevard was clear. Yet, some of the SME’s did not understand the entire concept and were not familiar with all the factors involved. For example, when asked to explain what they thought were the advantages/disadvantages of the project or what the different functions do, some SME’s had trouble answering the questions.
Divisibility is the last characteristic that influences the rate of adoption. Werkboulevard can be
4.1.3 Cooperation
In the literature, Ring and Van de Ven (1992) presented five forms of risk that need to be overcome in cooperative relationships between organizations. The first risk presented was commercial risk. The network does not produce a new product/service so there is no commercial risk. The other risks may be an issue. The Werkboulevard system uses a technological system to provide its networking services. Therefore, SME’s take a technological risk and experience engineering uncertainty in their cooperation efforts. Werkboulevard is an innovative and complex system which requires a great deal of knowledge and experience. As a result, SME’s could experience scientific uncertainty and question if Werkboulevards has adequate knowledge. Finally, SME’s could also experience corporate risk. The services Werkboulevard provides affect the employees which will have strong impact on an SME’s sustainability. If Werkboulevards services fail this could have strong ramifications for the SME. However, these risks were not issues brought up by any of the SME’s or people involved in Werkboulevard. The SME’s had confidence that these risks are low.
* The variable trust and its specific effects in SME’s will be discussed separately in chapter 4.3. 4.2 Specific SME characteristic results
4.2.1 SME views on HR-outsourcing
According to Klaas (2003) there are three main areas that specifically hinder an SME’s tendency to outsource its HR-function. First, the results show that Werkboulevard may have trouble “tailoring to the specific needs of individual SME’s”. One SME said, “Werkboulevard can’t see what we really need, they need to take a look in our (proverbial) kitchen”. The results for the second and third variables, dependency risks and strategic (differential) advantage have already been presented in 4.1.1 and 4.1.2. With regard to cooperation between SME’s and Werkboulevard in a specific HR-outsourcing relationship, the interviews show that some SME’s were not certain of Werkboulevard’s intentions. Not as the “opportunistic vendor” discussed previously, but as a company that, as one of the SME’s said “encourages the switching of jobs among employees”.
4.2.2 SME views on innovation
A lack of “the application of new ideas to the products, processes or any other aspect in a firm’s activities” (innovation) among the SME’s was emphasized by some of the people involved in the project. They stated that SME’s were very short-term focused and opportunistic and therefore resisted participation. This lack of an innovative mind-set was, to some degree, also found in the interviews with the SME’s. Innovation as the application of “new” aspects in the SME was not part of the directors/owners business or HR strategies. They had either a predominantly low cost or high quality product strategy. In their HR-strategies, for example, most SME’s did not include formal career planning.
recognized the lack of innovation attributed it to the fact that “SME’s have no time or money for abstractions from their core business”.
However, though their strategies and cultures may not typically stimulate the acceptance of new products, processes or other aspects, some of the SME’s activities are innovative. For example, they actively cooperate in new collaborative projects like collective security and internet services. Moreover, one of the SME’s had even already created a network with his competitors so that they could flexibly use each other’s employees in times of high or low demand.
4.2.3 SME views on cooperation
As we saw in the theory, SME owners have a strong need for autonomy and Werkboulevard’s management, government authorities and employer/employee associations thought that this need could inhibit participation in LMNs. However, in the interviews I saw that this is not the case for the SME’s. The SME’s had little difficulty with cooperating with other SME’s. In fact, they often had experience with cooperation (e.g. several firms that painted buildings exchanged employees to match their high/low demand). In addition, they saw opportunities in working together and recognized that cooperation had advantages like sharing the costs for a large investment. These results were also found for the leadership factor in Woolthuis & Nooteboom (2003) four factors that may inhibit cooperation among SME’s. The SME’s leaders had little trouble with cooperation or loss of control. Instead, the directors were more concerned about more practical/procedural issues surrounding leadership like liability for damage caused by or to the employees during employee transfers and the costs involved with cross-training.
Results were also found for the other factors described by Woolthuis & Nooteboom (2003) which may explain why SME’s have a negative attitude towards cooperation. First, most SME’s thought that there were few risks involved in participating in Werkboulevard. The SME’s were not worried about “spillover-problems” or “dependency risks”. But, most SME’s did point out at least one other risk. A recurring risk that was identified was the effect participation could have on the SME’s reputation. SME’s thought that if they even attended an informative meeting about Werkboulevard, other businesses might think that they had “employment” problems. As one of the SME’s said, “If I see another business that owes me money at one of those meetings, then I’m going to send him a reminder invoice the next morning”. Another SME said, “If a (potential) customer knows that I’ve been to such a meeting, they may lose confidence in my business. Especially in large projects where the customer is required to make a long-term investment this is a problem”.
Most of the SME’s did not think that cultural differences between their business and other organizations inhibited cooperation. They thought that the cultures in their business sector were quite comparable and that, for example, their employees could easily switch. But, when asked if their employees could work well in other business sectors, several SME’s thought that this would not work well. For example, one SME thought that the truck drivers in his organization would have a lot of trouble doing other jobs, especially jobs inside. He said, “Drivers need a certain amount of freedom, they do not want to work inside, even in something that resembles a truck like a crane they still have trouble adjusting”.
4.3 Influence of trust in SME participation
Almost all SME’s interviewed indicated that they believed in the potential of the LMN concept. Furthermore, all but one of the SME’s thought that Werkboulevard could be a successful project within the coming two to three years. Therefore, there is a high level of trust in the organization. Moreover, the representatives from the employer and employee associations also strongly believed in the concept and thought that it could be successful in the coming years. As a result, the local government authorities have decided to continue funding the project, despite the disappointing results up till now.
5. Discussion
The results will be analysed and linked to the three antecedents of intention in this section. In appendix 4 and 5 an outline is given of the factors that positively and negatively influence a SME’s ATT, PBC and SN. In addition, the tables show the causes of the positive or negative factors.
5.1 LMN Characteristics
The results on the LMN characteristics indicate that there is a strong effect on attitude, perceived behavioral control and (possibly) the subjective norm. First, the characteristic HR-outsourcing has positive and negative effects on attitude. The positive effects originate from the fact that SME’s are not afraid of competitive risks, have a low need for commitment and the in/outflow of employees is not seen as strategic (can therefore be outsourced). However, there are also negative effects on attitude due to the HR-outsourcing characteristics. Especially the lack of need for a LMN due to the firm’s “relative proficiency” may strongly stimulate a negative attitude. In addition, the need for flexibility may also create a “negative predisposition” (attitude) towards Werkboulevard if there is uncertainty surrounding the function. Finally, no effects on PBC or SN were identified for HR-outsourcing.
In the results on the rate of adoption of an innovation the effects were predominantly negative on attitude and perceived behavioral control (PBC) and possibly the subjective norm (SN). The lack of compatibility between the SME’s strategies and culture and Werkboulevard’s services has a negative effect on the SME’s attitude. Furthermore, compatibility may also negatively influence the subjective norm due to the links with culture. The high level of complexity and low level of communicability can also have a strong negative impact on PBC because it influences the services “ease of use”. The lack of divisibility when hiring an employee through Werkboulevard will also influence the PBC because it makes an SME rather dependent on Werkboulevard for its HR-services which may also result in a negative predisposition towards it (attitude). Only the perceived differential advantage and the (limited) divisibility provided by Werkboulevard’s services create a positive attitude towards it.
From the results on factors that influence cooperation one can conclude that there is clearly not a negative predisposition (attitude) towards the risks linked to cooperation van Ring and Van de Ven (1992). Moreover, one can also conclude that the subjective norm is also positive towards these risks. These factors are unlikely to have a significant impact on an SME’s intention to participate.
5.2 SME Characteristics
The most surprising finding on the SME’s views on the cooperation between SME’s and Werkboulevard was that the SME’s were afraid that participation would affect their reputation. This is a signaling effect that clearly has a negative effect on the subjective norm. A positive relation was also found. The interviews do not indicate that the SME’s have a strong need for complete autonomy or leadership. Therefore, they may not have a negative attitude towards cooperation due to those dimensions. The other factors on SME views on cooperation; culture and rigidness/habit gave mixed results because SME’s views on these subjects often did not align with the views held by the people involved in Werkboulevard.
The fact that innovation was not part of the SME’s strategy or culture indicates that there is a negative predisposition to innovation. However, the results also show that SME’s do innovate but tend to do that on a less “fundamental level” than larger organizations. For example, some SME’s cooperate with each other, but, this is on a very basic level like in a collective internet connection or security services. Therefore, perhaps there is only a negative predisposition among the SME’s to such complex innovations as Werkboulevard, but not to more simple innovations. That SME’s do innovate is also dominant in literature on SME’s which, for instance, states that innovation is “one of the core strategies” of SME (Shane & Venkataraman 2000).
5.3 Trust
6. Conclusion
Based on the literature, it was expected that the LMN and the SME characteristics positively and negatively influence an SME directors’ attitude, subjective norm and perceived behavioral control that produces his/her intention to participate in a LMN. As expected, the results and discussion indicate that the LMN and SME characteristics and the variable trust positively and negatively influence the three variables that create intention. The positive and negative effects have been summarized in appendix 4 and 5.
Clearly, there are many factors that contribute to these negative effects, but two of them stand out. First, from the results can be concluded that complexity is the most important variable that negatively influences attitude and perceived behavioral control. Not only is complexity a direct factor that influences the rate of adoption of an innovation, it is also often the root of other negative variables. The SME’s preference for less complex or less fundamental innovations and the difficult communication due to the complexities of the services, are examples of how complexity also negatively affects the other variables. Another example is the limited divisibility which is caused by the fact that SME’s are required to commit to Werkboulevards complex array of services. Finally, Werkboulevard is also less compatible with the SME’s because its complex services are not compatible with SME’s “no-nonsense” mentality.
Apart from complexity, trust is the other major variable that negatively influences attitude, perceived behavioral control and the subjective norm. The definition of trust used was “a state in which parties are confident about the other parties’ motives and conduct in situations that involve risk” (Lewicki, McAllister and Boes 1998). According to this definition, the theory section showed that trust negatively influences HR-outsourcing and the results show that trust also influences other variables. For example, the fear of Werkboulevards “intention to switch employees” and the fear that participation will lead to a negative impact (signaling effect) on the SMEs reputation are clear examples of lack of
trust. In addition, cooperation was hindered because there was a lack of trust between the SMEs and
Werkboulevards employees because they lacked easy (mental and physical) accessibility. Finally, the limited divisibility of Werkboulevards services is an issue because it requires the SME to take a risk and
trust Werkboulevard.
Finally, there were also several factors that had a positive influence. From the discussion one can conclude that the most important variable that positively influences participation is the SME’s positive attitude towards cooperation with each other and “vendors of HR-services” (HR-outsourcing). This openness to cooperation was identified in the variables surrounding HR-outsourcing and SME views on cooperation. In addition, the positive attitude towards the potential differential advantage that the concept could offer should not be underestimated. The SME’s and people involved in Werkboulevard were convinced that it could provide benefits and could be successful in the future.
