SME's Agains Large Corporations - Dissertation Example

?CHAPTER III METHODOLOGY In this chapter, the research methodology employed in the study will be presented. this is to present the research methods that have been used in the conduct of teh research this is vital as it informs the readers of the dynamics and approaches that have been used by the researcher as the study was being done. 6.1. STATEMENT OF THE PURPOSE The following are the aims of the research, aims to understand the relation between SMEs and technological developments. Likewise, the study intends to identify factors that may contribute to SMEs competitive edge. Finally, the study intends to apprehend the possibility of SMEs adopting technological developments as opening competitive edge for SMEs against large corporations. 6.2. RESEARCH DESIGN Research design pertains to the structure or framework that is followed by the paper as the paper endeavours to address the questions raised in the research and attain the aims set forth in this study. Furthermore, the design serves as guide for other researchers to replicate when they perform their own research. Likewise, the research design assures the reliability and validity of the data collected for this study. For the paper, the researcher had chosen the single case study for the reason that through case study one would be able to understand the phenomenon within real—life context and the event being studied was further clarified through the review of literature related to the subject matter. In this regard, as the a the paper seeks to understand and clarify the current status of the connection between SMEs and technological development and whether the adoption of a technological development of SMEs leads to a competitive edge, the researcher had conducted survey of literature pertinent to the subject matter. Likewise, the researcher also conducted a qualitative research using interview to get an idea as to how SME managers-owners look at the problem of the research. This approach is chosen on the premise that the problem of the research can be best addresses following an interpretivism , since the researcher believes that it is the research philosophy that will help the clarify the issue of teh study. 6.3. RESEARCH METHODOLOGY As the single case study is adopted for the research methodology. As the research sought to understand whether technological developments bring advantages to SMEs over LEs, the case study provided the researcher the chance to undertake “an empirical inquiry that investigates a contemporary phenomenon in depth and within its real-life context” (Yin, 1994, p. 18). To address the question of the research, the research was conducted in two phases. The first phase is the literature review and the second phase is the qualitative research which used interview approach. A literature review is an evaluation of the work that has been published by scholars in a particular topic area (Patton 1990). The purpose of the literature review is to summarize and synthesize the available research in such an area. By evaluating the work of others, it is possible to identify research trends and research that still needs to be done in the chosen topic area (Patton 1990). As such, the reader gets an idea as to how contemporary scholars are presenting and discussing the problems raised in this study (Scott, 2006). For this research, the researcher conducted a documentary research to get the necessary academic literatures addressing the issue of this study. Literatures written about small and medium –sized enterprises, technological development, large enterprises, globalisation, internalisation, e-commerce and global market had been searched in order to shed light to the possible conceptual ambiguities that maybe inherent in the concepts inherent in the study. For the second phase of the study, primary research has also been conducted. The primary research allows the research to understand the concepts and problems of the research based on the actual experienced of actual people involve in SMEs. Primary research entails the first hand information or data derived from people who participated in the research (Bogdan & Biklen,1998). In this part of the study, the researcher had chosen to conduct a qualitative research using interview of people who are actually involved in a small-business enterprise. Qualitative research is basically a naturalistic approach that seeks to understand the phenomenon based on the actual context from where it happened. As such, "real world setting [where] the researcher does not attempt to manipulate the phenomenon of interest" (Patton, 2001, p. 39). Qualitative research, broadly defined, is "any kind of research that produces findings not arrived at by means of statistical procedures or other means of quantification" (Strauss and Corbin, 1990, p. 17) and instead, the kind of research that produces findings arrived from real-world settings where the "phenomenon of interest unfold naturally" (Patton, 2001, p. 39). Case study has been chosen as the method of research because this method gives the researcher the opportunity to conduct an “empirical inquiry that investigates a contemporary phenomenon in depth and within its real-life context” ( Yin, 1994 p. 18). In this situation, the phenomenon being observed is the integration of technology in SMEs and the unit of analysis is a seaweeds farm. Moreover, case study is the appropriate method since, the focus is in “the context rather than the variable, in discovery rather than confirmation” (Merriam, 1998, p.19). For these reasons, case study is considered as the better method for the research. In the second part of the research, which is the interview section, the researcher took an active participation in the interview process. In this sense, the researcher became an actual participant in the process and not just a mere observer. 6.4. METHOD OF DATA COLLECTION The data collection used for this research involved two ways. First is the collection of academic literatures that are pertinent to the subject of the study. The following was the collection of primary data through an interview from people who have been involved in a small business enterprise. 6.4.1. SELECTION OF DOCUMENTS In this research, the researcher searched the electronic databases Academic Source Complete, Jstor, GoogleScholar, Primary Research, and ERIC using a combination of the following key terms: small and medium-sized enterprise, globalisation, technology, technological developments, information and computer technology, e-commerce, large enterprises, multinational corporations and global market economy. Articles written only in English and published in journals were selected. Moreover, articles that provided a conceptual analysis of small and medium-sized enterprise, globalisation, technology, technological developments, information and computer technology, and e-commerce have been searched. Likewise, included in the search are books, policies, procedures, government publications and articles that used qualitative and quantitative research in analyzing the issue of risk. Correspondingly, excluded in the selection were editorials, opinions, position papers, pamphlets and monographs. The reference list of the articles was searched to identify additional relevant publications. The inclusion is based on the rationale that since English is the only language that the researcher can fully grasp without much difficulty pertinent to the rudiments of language, so only articles written in English have been included in the research. Since there are many article relating to the topic, this approach provide a good limitation. Likewise, articles dealing with the conceptual analysis of the topic are included. As such, any conceptual clarification is deemed to be helpful in coming up with a less ambiguous policies. The reference list of the articles was also searched because it provided a rich source of related reading materials. 6.4.2. QUALITATIVE RESEARCH As mentioned, qualitative research had been conducted to know and understand the concern of this research from the perspective of the people who are actually involved in SMEs. In doing qualitative research, there is a chance for the researcher to be immersed in the world of the interviewees and see the context and condition from where they are coming from without any attempts to change and manipulate their experiences. In this regard, two manager-owners of a seaweeds farm employing 20 people have been interviewed. The major criterion for the selection was the number of years that the company has been operating. In this case, both companies have been on the business for more than ten years. This criterion had been chosen on the premise that the longer the firm has in business, the more narratives they could share regarding their experiences. This is not to claim that SMEs are homogenous, but to ascertain that at the base the concerns pertinent to technological development affects and permeates all SMEs regardless of the nature of their organisation. The collection of the primary data had been done in two phases. In the first phase, the researcher contacted several persons asking them if it is possible that they be interviewed for the research. Manager A and Manager B agreed to be part of the research on the condition that their anonymity would be respected and protected. Coming to an agreement, the researcher asked the interviewees when they were available for interview. Likewise, during this time, the schedule was set. The second phase was the actual interview. Due to physical distance, it was agreed upon that the interview was to be conducted via internet. Both the interviewees saw no problem with the interview being conducted using the internet. Since, they too recognised the internet as the most viable medium for communication considering the physical distance. 6.5. ETHICAL ISSUES/CONSTRAINTS/VALUES OF THIS RESEARCH Recognizing the hard work that authors of the articles used in their own research, and the efforts that they have invested in their own works, the researcher has diligently followed the proper citation of the works used. This is of primary importance not only in terms of professionalism, but of the fact, that one has to acknowledge, and give proper credit to those who deserve it. Moreover, in the interview, before it was conducted, the interviewer first asked permission from the interviewee if it was alright with them. The researcher was conscious of the fact that in all moment of the interview what was happening was a sharing of narratives and experience, thereby, allowing knowledge and ideas to flow smoothly. Respect for the personhood of the interviewees had been observed in the entire conduct of the interview. The interview lasted for more than 30 minutes. During the interview, the researcher was observing and discussing the subject matter with the participants and the researcher did not interrupt the flow of the sharing. However, in the entire interview, the issue of gatekeeping and power was remarkably. This was mentioned because the role of the researcher was to listen, for out of the narratives, the possible solution to the inquiry may arise. In this regard the question of ‘Who is in control of the interview arise? Who filters the story?’ Is it the participant because he is the one that defines which story to tell or is it the researcher because in an implicit way, he manages the dialogue?’ Another concern is the blurred boundaries between the participant and the researcher - when is the researcher a researcher and not a participant. These are some of the constraints that the researcher encountered during the interview. These constraints can be overcome by building trust in the interview relationship. Likewise, the danger of blurring lines between researcher and participant in a qualitative research is a constant problem. The researcher believes that taking down notes, having the interview transcripts check and rechecked by the participants and a thorough review of the transcripts will help resolve these issues. 6.6. POTENTIAL VALUE OF THIS RESEARCH The primary question of this research poses a unique challenge to the field. This is maintained base on the supposition that discourse regarding the relation between SMEs and technological developments are often geared towards the idea that the existing relation between the two will enable SMEs to become globally competitive. However, the research question deals with the idea technological development may, perhaps, open the possibility of providing a competitive edge for SMEs over LEs. In the course of the research, it has been observed that minimal literature have touched this query. In this sense, the researcher is of the opinion that this research contributes towards an alternative understanding toward the relation between SMEs and technological development. In this chapter what has been presented are the research methodology, the rationale behind why survey of literature review and qualitative research have been chosen as the appropriate method for this study, the selection of the materials, ethical concerns and the potential value of this research. In the following chapter, the findings and the discussion of the results will be given. 1. How long have you been in the business? 2. Have you attended any seminars or lectures regarding the business? 3. Why did you decide to start the business? 4. What would you say are the main obstacles to the success of your business in general? 5. How would you categorise your business? 6. What would you say regarding the advantages /disadvantages of your business over large businesses? 7. What is your view of technological developments vis-a-vis your firm? 8. Has your business integrated some technological developments? 9. How does the technological developments affect your business? 10. Do you think technological developments can give you an advantage over Les? Questions 1 -3 Intends to get an idea as to how long the business have been in operation and get some stories regarding the depth and extent of their experiences as managers-owners. Questions 4 – 6 Seeks to know their opinion regarding SMEs Questions 7 – 10 Aim to gain insight regarding their views of technological developments and on how it affects their business. NB. This is a husband and wife enterprise. FINDINGS AND DISCUSSIONS In the last three chapters, the introduction, survey of literature and the methodology used in the conduct of the search have been presented. In this chapter, what will be shown are the results and findings of the study as well as the discussion and analysis of the findings will be given. FINDINGS AND DISCUSSIONS The following are the findings and discussions of the study. The Positive and Negative Effect From the literature review, it has been observed that scholars are in agreement that technological adaptation is primordial in the growth and survival of SMEs (Attanasio, 2006; Beck et al, 2003; Bhavani, 2002; Farvaque et al 2009; Farvaque & Voss, 2009; Nurala, nd; Simpson & Docherty, 2004; Supporting Internalisation of SMEs, 2007). Manager A shares, ‘We have been in agriculture business for almost fifteen years. Before, we were manually moving hazelnuts from one warehouse to another, but now we have the technology that makes the work easier, faster, and lighter. Also, now that we are entering into new projects like decorative designs, the tools that we use make the work faster. In terms of marketing, I am now receiving orders from Turkey and Ukraine. I have established contacts with the customers through the Internet. So technology is really a big help for us’. In the same way, Manager B shares, ‘Before we just leave the hazelnuts under sun to dry out. Now we have the drier, which is really a very big help for us. Since, the under the sun, you have to wait for a long time before it dries out. We were basically dependent on nature. But now it is quicker and because of it, we can now transport more hazelnuts. Also, the conveyor is a big, big help. Before the workers would carry sacks of seaweeds back and forth, this is around 40 kls. But now, they just place it in the conveyor. And the machine does the work. It is important for us, it does not only make the work easier but it makes work faster and less hazardous for the workers.’ In effect, there is no doubt that technological development increases production, makes the work easier, and makes them competitive. In this sense, technological developments, machineries and other tools, used in the manufacturing and processing operations of SMEs concretely helps in increasing production, enhancing and sustaining quality and opening growth for the company (Supporting Internalisation of SMEs, 2007). This is in term of production. This development can be read as a way of enhancing the production of SMEs and making SMEs competitive. In fact, this is one of the reasons why there are continued efforts in encouraging SMEs to internationalise or even go global (Supporting Internalisation of SMEs, 2007). This whole idea of making SMEs globally competitive is not based on turning them into multinationals, but it is in offering them the chance of entering into the global market. In fact, whether the technology employed is in the manufacturing and processing phase or is used in dealing with the customers’ needs and demands or in creating new contacts and developing new products, technology development is beneficial to SMEs because 1. It increases production. 2. Increases competitiveness of SMEs 3. It makes work faster. 4. It is an important tool in reaching new customers, meeting customers’ demands, preferences and needs, promoting products and keeping existing customers. For these reasons there is a strong incentive for SMEs to globalise. This fact has been repeatedly mentioned in this chapter already to highlight the fact that the role of SMEs in the economic growth of a country is now being recognised. For example, in Europe, SMEs employ millions of people and comprise almost one-fourth of the workforce in Europe (Faravaque & Voss, 2009). The strength of SMEs as an economic player is even felt, especially in Europe and Asia, as the adaptability and flexibility of SMEs have helped them survive the difficulties of the current world economic downturn. The Conflict However, it has also been observed that there are certain strains in this assumption. In the real world, SMEs are confronted by constraints that impedes their competitive edge – their very nature – limited resources, small size and management. This is true as narrated by Managers A and B. Both claims that they wanted to buy new machineries, but they have to settle for second hand machines because it is a lot cheaper. As Manager A says, “We have to settle for it because the bank gave us just enough.” It is not only that. The limitation in terms of knowledge management becomes more apparent. Manager B says, “I am the only one who is in charge of all the computer works.” In this regard, it can be deduced that in theory there is consensus that technological adoption is good for SMEs. However, in real life context of manager-owners of SMEs the good that is derived from technological adoptions comes with a price that demands they work more and produce more. This reality, opens a contradiction because as seen in IT Paradox, in the long run, they will not be gaining any benefits from the technology investment that they have made. In fact it will contribute to decrease in sales. This situation is not mentioned by the theories but is drawn from the stories of Managers A and B. Theoretically, they support the good of technology for their, but the reality that it requires more is something that they have address in their own actual business. It is important that this tension be understood. Since, in recognising that there exists a tension between the theoretical good of technology vis-a-vis the actual concerns reading the adoption of technology by SMEs can policy-makers come up with policies that will help and protect SMEs. The Tension The second findings pertain to the tension between the positive and negative effect of the inherent tangible attributes of SMEs. As Manager A shared, ‘Working with the 20 people pulls you to the left and right. When there is something new and the adrenalin is all up, you can see everybody working towards achieving the goal. But sometimes, there are concerns where the focus is more on the personality and not really on the issue. You can’t help it because we’ve been together for quite a while.’ While, Manager B said, ‘When the number is small, and you know that you are working within a limited resources, everybody pitches in. However, you cannot avoid it that sometimes, somebody gets into everybody’s nerves and it is difficult to be theoretical about it, it is the way you handle and keep the relation, especially, that the group is almost all male’. As such, as the nature of SMEs creates a tension in understanding the effect of the tangible traits of SMEs as a firm, there is a need to identify the factors that turn these traits into positive or negative effects. This is necessary as identification of factors that will help SMEs come up with strategies that will turn the inherent traits into something positive and avoid the downsides of the negative effect is a challenge for SMEs as they compete in the market. Furthermore, management should be made aware of the tension that is the result of the inherent nature of SMEs. Since, it is in capitalising on this tension that a possibility of optimising the nature of SMEs can be achieved. The Possibilities The third finding of this research pertains to the possibility of SMEs gaining advantage over LEs. Computer and information technology has created the reality of people around the globe being connected and communicating in virtual reality (Morley, 2008; Calder, 2004; Purser, 2004). This development has permeated modern society in such a way that it is integral in almost all of human transactions in this period. In addition, the essential role of ICT is never more felt in the business world (Dewitt, 1998; Purser, 2004). Focusing on SMEs, it has been observed that the ICT is the technological development that really places SMEs in such a way that they gain competitive advantage over LEs. How does this happen? Developments in information and computer technology have opened the arena wherein SMEs gain more access to customers. Through the Internet, SMEs can conduct their business and meet with suppliers. Also through the internet they have the chance to personally follow up on their regular customers, learn about their further needs and how it can be met, offer new products, in other words the virtual reality becomes a foundation where personalise services is taken one step higher and closer through the power of www (World Wide Web). This presents the reality that on one hand there is technological developments in ICT but on its own it cannot be a source of advantage to SMEs. This position is maintained by the researcher on the following grounds 1. ICT development is an integral part of the current society and that it is the condition that is part of the contemporary business climate. In this sense, all organisations regardless of their size have to use and implement technological development if they intend to survive in the global economic market (Suarez-Orozco & Qin-Hilliard, 2004; Morley, 2008). 2. ICT is also one of the strong drivers for MNCs in keeping their position in the global economic market (De Witt, 1998). 3. ICT developments have created new challenges and demands to all organisations, regardless of its size. In this regard, if the company intends to keep its niche in the global market then they have to maintain and continue exploiting and improving their ICT. In fact the continued support that MNCs and LEs in their ICT projects, which require huge amount of financial investments is a proof of this. In this regard, it can be claimed that SMEs must utilise the developments of information and computer technology. Since aside from the known benefits derive from the use of ICT, it is an essential part of the current business climate. Fig. 2 TECHNOLOGICAL DEVELOPMENTS PROVIDING COMPETITIVE ADVANTAGE FOR SMEs In this figure, what is being shown is that technological developments in information and computer technology and SMEs personalise service create the framework wherein SMEs gain competitive advantage over LEs. This is claim based on the supposition that providing personalise service has always been part of the inherent intangible characteristic of SMEs (Jeppesen, 2005; Chapell et al, 2002; Simpson & Docherty, 2004; Ghobadian & Gallear, 1997). It is this that sets SMEs from other organisations since they always have close contact and personal knowledge of their customers, especially their regular customers (Jeppesen, 2005; Chacko & Harris, 2006). In fact, it is one of the reasons why people continue to patronise SMEs because one gets the feeling that one is connected and somebody is concern with your needs. SMEs have that touch or approach. It is part of their nature long before the multinationals have recognised the ‘customer king’. With the combination of information and computer technology and the personalise service of SMEs create the opening wherein they gain competitive advantage over LEs. ICT developments have opened the venue wherein personalise service is no longer limited to the physical territory but is extended even to virtual reality where access is easy and means of linking and communicating with the customers are taken at a new framework. This allows SMEs to be 24/7 to their customers. It is not the 24/7 that is commonly experienced in telemarketing or call centre agents. It is really your friendly store or firm at the corner in the net. The personalise service of SMEs in the age of computer keeps with the personal, and dignified way of treating customers. This is not to glamorise SMEs, but to highlight the fact that SMEs are firms that authentically and genuinely connects with its clients (Jeppesen, 2005). The ‘customer king/queen’ is not just a strategy but also a nature, its way. As such, ICT use in furthering this nature of SMEs creates a competitive edge for SMEs over LEs. Just as Manager A shared, “Until now, our customers keep coming back. They often tell us that they will not be buying hazelnuts from others but only from us. Its our concern over their concern that makes them keep coming back.’ In this regard, factors affecting success and growth of SMEs are not clear-cut abc’s. Instead it is the combination of the optimisation of the inherent tangible characteristics of SMEs, appropriate use of technological development in order to further harness the positive effect of the tangible attributes of SMEs. In addition this is the reason why SMEs are trusted more by consumers compared with MNCs, TNCs and especially SOEs (Jeppesen, 2005). Finally, the fourth finding of this research is that the relation between SMEs and technological developments is not simply effective in nature, but it becomes SMEs strategy in the age of computers. Furthermore, in understanding this relation one has to consider SMEs not in a vacuum, but one involve in the dynamic demands and changes of both the external factors and internal elements that affect their conduct of business. As per the findings and discussions presented in this chapter, the relation between SMEs and technological developments can be categorised in two kinds. The first one involves benefits derive from utilisation of technological developments that will help SMEs increase production, maintain quality and make the work faster and easier. The second type also indicates on the use of technology, but what makes it different is that the use of ICT enhances and strengthens what is essential to SMEs – personalise service, the primacy of ‘customer king/queen’. As such the need to further clarify and understand the nature of SMEs becomes necessary so that they can further optimise whatever advantages they may have so that global market is not only made accessible and open to them, but also that they gain more competitive edge over LEs and even MNCs. Technology enables corporations to be more productive but at a cost. At the beginning they have to spend sufficient funds for investing in a technology, which at the beginning may provide them an edge. At this point even the edge of increased productivity is uncertain because of bleeding edge. So there is a tension. In the case of SMEs, they do not have excess funds. Manger B says ‘Technology is very important because it is a lot of help to us. It makes work easier and communicating with the customers faster. But it is very expensive. We do not have enough funds for it. Its difficult to get a loan in the bank’. While, Manager A says that with technology, ‘It is always welcome. But it is frustrating because it comes with a price that is difficult for us.’ Unfortunately, the reality of IT paradox is something that all organizations, regardless of size have to contend. It puts SMEs at clear disadvantage because of funds, but at the same time they have to avail of it since it is necessary if they intend to be competitive in the market, IT “…it is frustrating because it comes with a price that is difficult for us.” as Manager A shares. In this chapter what has been presented are the findings and the discussion of the findings. In the next chapter the summary and the conclusion will be given. Conclusion: In the course of the research, case study had been used in order to address the questions raised in the research. This method was chosen because it provided the researcher the opportunity to conduct an empirical inquiry regarding the phenomenon in real-life context. It gave the researcher insights regarding the issue not only from the theoretical perspectives, but also out from the experience of the people involved in the phenomenon being observed. As such, through the case study method, the researcher was given the possibility of seeing theory and reality working together. Merriam, S. 1998, Qualitative Research and Case Study Applications: Revised and Expanded from Case Study Research in Education. San Francisco, CA: Jossey Bass. Read More