The Strategic Behaviour of SMEs
Abstract
:1. Introduction
- Most research on the Miles and Snow typology (1978) uses a single problem (entrepreneurial, technological, or administrative) or does not differentiate among them, as if they were a single global reality (Frambach et al. 2016; Ingram et al. 2016), implicitly assuming that the three are perfectly aligned and have the same characteristics. Even in the case of a detailed analysis of the problems one by one, in the literature, little attention has been paid to the technological and administrative problems, and the majority of research has focused on the entrepreneurial side (Pinto et al. 2014). In this paper, the three problems proposed by the typology are considered explicitly: entrepreneurial, technological, and administrative. This will provide greater richness and detail about the strategic behaviour of SMEs, as well as knowledge on the degree of alignment of each one of the problems
- From the methodological point of view, this paper introduces new systems of measurement and validation that are more in line with the complex strategic reality of firms (among others, DeSarbo et al. 2005). The Rasch Measurement Theory (Rasch [1960] 1980) presents, through a polytomous scale, the joint measurements of items and firms along a linear continuum (This theoretical and methodological approach is in line with the new interpretations of the strategic types of Miles and Snow (1978) closer to trends than to pure types (e.g., Anwar and Hasnu 2016; Sollosy 2013; Woodside et al. 1999). Until now, tools and measurement systems have been used to establish clusters of firms in a somewhat ‘artificial and manipulated’ way. In addition, this methodology is considered to be one of the most current and appropriate methods in the field of Strategic Management (Marcoulides 1998) to improve the measurement of constructs that are not directly observable (Godfrey and Hill 1995). These unobservable constructs are precisely the ones that predominate in business research.
2. Literature Review
2.1. Strategic Behaviour of SMEs according to the Miles and Snow Typology (1978)
- Prospector strategic behaviour: developed by firms that constantly seek new market opportunities through innovation processes and new product development. They are characterized, from the organizational point of view, by being flexible and by the absence of a formal structure (Rugman and Verbeke 1987). They are firms that create change and uncertainty that their competitors must respond to (Blumentritt and Danis 2006). Therefore, capabilities such as technology and IT capabilities are significantly and positively related to their success (Song et al. 2007). From these organizations, a more external orientation is expected, focusing on change (Fiss 2011).
- Defender strategic behaviour: observed in those firms that concentrate on a narrow and limited scope of the firm, trying to protect their market share without looking for new opportunities outside their business. To do so, these firms emphasize cost reduction and increased efficiency. From the organizational point of view, they are characterized by the existence of hierarchical elements, such as the centralized decision making and the emphasis on formal financial monitoring systems (Rugman and Verbeke 1987). In the case of innovation, defenders focus on business processes rather than on products (Parnell et al. 2015). These types of firms tend to have a more internal orientation and are focused on stability (Fiss 2011).
- Analyser strategic behaviour: a combination of the two previous strategic types, although for some authors it is located on a continuum between defenders and prospectors (Zahra and Pearce 1990). They try to balance efficiency and cost control with innovation, trying to develop their marketing, R&D and production capacities equally (Lin et al. 2014). Therefore, they are firms that need to emphasize hierarchical elements at the same time as flexibility and informal decision-making (Rugman and Verbeke 1987). Therefore, they will behave as defenders in more stable areas and as prospectors in the most turbulent times (Blumentritt and Danis 2006). Their organizational structures combine characteristics of organic organizations with characteristics of mechanistic organizations.
- Reactor strategic behaviour: usually characterized as a type of non-viable strategy (Anwar and Hasnu 2016). In addition, reactors only respond to competitive events when they are forced and do so in an inconsistent or unstable manner (Hughes and Morgan 2008). They are characterized by a lack of congruence between the objectives of the firm, directive principles and process, which in turn generates a degradation of their performance (Balodi 2014). It would not be clear whether they are firms in a transitory phase or, on the contrary, in an ‘enduring maladaptive pattern’ (Zahra and Pearce 1990). Hence, doubts about their long-term viability arise (Kumar et al. 2012). Therefore, this strategic type is not generally considered in studies that apply this typology, such as Blumentritt and Danis (2006), Frambach et al. (2016) or Hughes and Morgan (2008).
2.2. The Strategic Problems of the Miles and Snow Typology in SMEs
3. Methodology
3.1. Population and Sample
3.2. Rasch Measurement Theory
3.3. The Scale of Strategic Behaviour
4. Results
4.1. Analysis of the Strategic Behaviour of SMEs
4.2. Differences between the Three Problems of the Strategic Behaviour of SMEs
5. Conclusions, Implications, and Future Lines of Research
5.1. Conclusions
5.2. Implications
5.3. Future Research Lines
Author Contributions
Funding
Conflicts of Interest
Appendix A
- βn is the parameter of the skill of subject n, with a field of variance of n = {1, …, N}
- δi is the parameter of the difficulty of item, with a field of variance of i = {0, 1}
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1 | Micro-enterprise (0–9 employees), small enterprise (10–49 employees), and medium-sized enterprise (50–250 employees). |
2 | To delve deeper into the fundamental and probabilistic mathematical developments of the methodology, see Appendix A and, among others, Wright and Stone (1999). |
3 | The parameters are estimated through a method of maximum verisimilitude using the Winsteps program version 3.92.1 (Linacre 2017), which considers the PROX and JMLE algorithms (joint maximum likelihood estimation). |
4 | Point-measure correlations (PTMEA) are those between the observations of an item and the corresponding measure of the items (Linacre 2009) and must be positive in order to corroborate the adequacy of the measurements. Rasch-residual-based Principal Components Analysis (PCAR) shows the contrast between opposite factors, not the load on a factor (Linacre 2009). It looks for patterns in the data that do not accord with the Rasch measurements, that is, for the unexpected part of the data (Linacre 2018). In order for the measurements to reflect only one dimension of the construct, the unexplained variance of the first contrast must be lower than 2. |
5 | The Rasch Measurement Theory (Rasch [1960] 1980) and its application through the Winstep program provides a reliability index of separation for the person, and another for item reliability, which has no equivalent in traditional indices. They are interpreted in a similar manner to Cronbach’s alpha. |
6 | According to Linacre (2018), the Infit is an information-weighted fit statistic, which is more sensitive to unexpected behaviour affecting responses to items near the person’s measure level, while the Outfit is an outlier-sensitive fit statistic, more sensitive to unexpected behaviour by persons on items far from the person’s measure level. MNSQ is the mean-square outfit statistic with expectation 1 and the ZSTD is the outfit mean-square fit statistic t standardized to approximate a theoretical mean 0. Correlation is the Pearson correlation between raw scores and measures, it is expected to be 1 for SMEs and −1 for items, when the data are complete (Linacre 2018). |
7 | Due to space considerations, measurements are not included in this paper but are available on request from the authors. |
8 | The Rasch methodology (1960/1980) allows for the analysis of groups of items through the estimate of a Student’s t and the analysis of the significance of the differences through a 2-sided t-test using the Welch’s adaptation of Student’s t-test. A statistically significant finding for a single two-sided t-test is Prob. <0.05 (Linacre 2018). |
9 | According to the Ministry of Industry, Energy and Tourism (Ministerio de Industria, Energía y Turismo 2016), in the composition of the services sector in the Canary Islands, the largest percentage of companies is in the hospitality sector, business services, and real estate. |
DEFENDER Strategic Behaviour | | PROSPECTOR Strategic Behaviour |
---|---|---|
ENTREPRENEURIAL PROBLEM | ||
E1. The sector in which your firm currently carries out its activities is… | ||
narrow (related areas) and with little chance of being widened | 1 2 3 4 5 | wide (diversification into different areas) and continuously being developed |
E2. About the developments in your business environment what you tend to do is… | ||
study the changes in the environment in your sector in depth | 1 2 3 4 5 | study the conditions, events and changes of the general business environment |
E3. The best way to face competition in your sector is a… | ||
strong resistance in defence of your current products and improvements, especially, in prices and/or services. | 1 2 3 4 5 | continuous development of your range of products making them more attractive to customers (innovative, etc.) |
E4. The way in which your firm proposes to grow is through… | ||
market penetration with your current products and in your current markets. | 1 2 3 4 5 | the development of new products and markets. |
E5. The reaction of your firm to possible opportunities in its business environment would be… | ||
to analyse and study them cautiously. | 1 2 3 4 5 | to take advantage of them quickly. |
TECHNOLOGICAL PROBLEM | ||
T6. With respect to the technology in your firm, the main concern is to have… | ||
cost-efficient technology | 1 2 3 4 5 | flexible and innovative technology |
T7. The kind of technology your firm currently has is… | ||
homogenous and based on a well-developed core technology. | 1 2 3 4 5 | multiple and not based on any specific core technology, rather on the diverse technical skills of personnel. |
T8. The technology that your firm currently has is one of the most advanced in the market as… | ||
the effort in continually developing it has reduced costs to very competitive levels | 1 2 3 4 5 | even if your costs are not low, the technology allows you to do unique and diverse jobs in the market. |
ADMINISTRATIVE PROBLEM | ||
A9. The most influential individuals in your firm are found among the experts and managers of… | ||
production and finance | 1 2 3 4 5 | marketing and R&D |
A10. The individuals who currently hold top positions in the firm come from… | ||
promotions from within the firm. | 1 2 3 4 5 | personnel contracted outside the firm when necessary. |
A11. Planning in your firm is quite… | ||
rigorous and a priori (before the action). | 1 2 3 4 5 | open, impossible to completely carry out before the action. |
A12. The firm is organized by… | ||
functions, with members specialized in their area. | 1 2 3 4 5 | products/customers with members that participate in multiple tasks. |
A13. The control of your firm is… | ||
centralized (mainly the responsibility of senior management) and supported by vertical information systems. | 1 2 3 4 5 | decentralized and participative (encouraging staff to participate) and supported by horizontal information systems. |
A14. Coordination among the staff of your firm is… | ||
simple and conflict resolution is through hierarchical relationships. | 1 2 3 4 5 | complex and conflict resolution is through personal relationships. |
A15. When the degree of deviation in performance of your firm must be determined, the firm prefers to focus on the average performance… | ||
compared to that of previous years. | 1 2 3 4 5 | compared to competitors. |
INFIT | OUTFIT | RELIABILITY | CORRELATION | |||
---|---|---|---|---|---|---|
MNSQ | ZSTD | MNSQ | ZSTD | |||
SMEs | 0.99 | −0.1 | 1.03 | 0.0 | 0.73 | 10.0 |
ITEMs | 0.99 | −0.2 | 1.03 | −0.2 | 0.93 | −10.0 |
Items Count | Mean Measure | S.E Mean | P.S.D. | S.SD | Median | Model Separation | Model Reliability | Code |
---|---|---|---|---|---|---|---|---|
15 | 0.00 | 0.16 | 0.61 | 0.64 | −0.17 | 3.61 | 0.93 | |
7 | 0.35 | 0.29 | 0.70 | 0.75 | 0.16 | 4.02 | 0.94 | ADM |
5 | −0.20 | 0.16 | 0.32 | 0.36 | −0.17 | 1.72 | 0.75 | ENT |
3 | −0.48 | 0.07 | 0.10 | 0.13 | −0.42 | 0.00 | 0.00 | TEC |
Item Code | Item Code | Mean Measure | Difference S.E. | t | Welch d.f. | 2-Sided Prob. Rasch-Welch |
---|---|---|---|---|---|---|
ADM | ENT | 0.54 | 0.33 | 1.67 | 9 | 0.130 |
ADM | TEC | 0.82 | 0.29 | 2.80 | 6 | 0.031 |
ENT | TEC | 0.28 | 0.18 | 1.59 | 5 | 0.172 |
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Yanes-Estévez, V.; García-Pérez, A.M.; Oreja-Rodríguez, J.R. The Strategic Behaviour of SMEs. Adm. Sci. 2018, 8, 61. https://doi.org/10.3390/admsci8040061
Yanes-Estévez V, García-Pérez AM, Oreja-Rodríguez JR. The Strategic Behaviour of SMEs. Administrative Sciences. 2018; 8(4):61. https://doi.org/10.3390/admsci8040061
Chicago/Turabian StyleYanes-Estévez, Vanessa, Ana María García-Pérez, and Juan Ramón Oreja-Rodríguez. 2018. "The Strategic Behaviour of SMEs" Administrative Sciences 8, no. 4: 61. https://doi.org/10.3390/admsci8040061