Enhancing SMEs' Growth by Investing in Organizational Capital
Objective: The objective of this paper is to verify the relationship between the share of investments in organizational capital (OC) within the total amount of investments and key performance indicators of SMEs.
Research, Design & Methods: Quantitative research based on the authorâ€™s theoretical model and was conducted on a group of 180 Polish SMEs with the use of a structured questionnaire. To verify the hypothesis measures of dispersion as well as correlation were used.
Findings: The share of investments in OC vary at particular growth stages and the highest is in decline stage. Investigated firms invest mostly in 'brand' and 'IT systems'. Investing in OC seems to be important mostly for SMEs that are in the prime stage. In this stage the share of investments in OC is correlated with almost all performance indicators. It suggests that OC can be treated as a source of competitive advantage and firmsâ€™ performance.
Implications & Recommendations: The appropriate share of investments in particular resources positively impact the effectiveness of decisions aimed at enhancing SMEs growth. Guidelines in what to invest help managers to plan their activities, especially while operating in a rapidly changing environment.
Contribution & Value Added: The study contributes to the stream of research devoted to SME growth factors. Despite the fact that there already are publications on the impact of particular resources on organisationsâ€™ success or failure, complex studies, including those concerning Polish SMEs, are much needed.
SMEs; small and medium-sized enterprises; growth models; organiza-tional capital; investments; resources
Adizes, I. (2004). Managing corporate lifecycles. Carpinieria: Adizes Institute Publications.
Barney, J.B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Bayer, K. (2010). Kapitał intelektualny jako zasób przedsiębiorstwa – koncepcja i modele zarządzania (intellectual capital as a resource in enterprise – conception and models of management). Studia i Prace WNEiZ, 17, 171-182.
Berends, H., Jelinek, M., Reymen, I., & Stultiëns, R. (2014). Product Innovation Processes in Small Firms: Combining Entrepreneurial Effectuation and Managerial Causation. Journal of Product Innovation Management, 31(3), 616-635.
Churchil, N.C., & Lewis, V.L. (1983). The five stages of small business growth. Harvard Business Review, 61(3), 30-50.
Ćwik, K. (2011). Zachowania strategiczne małych przedsiębiorstw i ich uwarunkowania w aspekcie teoretycznym (Strategic behaviours of SMEs and their determinants in the theoretical aspect). In S. Lachiewicz, & M. Matejun (Eds.), Zarządzanie rozwojem małych i średnich przedsiębiorstw (SMEs growth management) (pp. 26-43). Warszawa: Oficyna Wolters Kluwer Business.
Eisenhardt, K.M., & Martin, J.A. (2000). Dynamic capabilities: what are they? Strategic Manage-ment Journal, 21(10-11), 1105-1121.
Flamholtz, E. (1995). Managing Organizational Transitions: Implications For Corporate and Human Resource Management. European Management Journal, 13(1), 39-51.
Floren, H. (2011). Organising small-firm growth. In S.-Å. Hörte (Ed.), Research on Technology, Innovation and Marketing Management 2009‐2011: Introducing the Research Area of Innovation Science (pp. 117-133). Halmstad: Högskolan i Halmstad.
Galbreath, J. (2005). Which resources matter the most to firm success? An exploratory study of resource-based theory. Technovation, 25(9), 979-987.
Greiner, L.E. (1998). Evolution and revolution as organizations growth. Harvard Business Review, 76(3), 55-68.
Hanks, S., Watson, C., Jansen, E., & Chandler, G. (1993). Tightening the life-cycle construct: A taxonomic study of growth stage configurations in high-technology organisations. Entrepre-neurship Theory and Practice, 18(2), 5-29.
Hugo, O., & Garnsey, E. (2005). Problem-Solving and Competence Creation in the Early Develop-ment of New Firms. Managerial and Decision Economics, 26(2), 139-148.
Jackson, J.H., & Morgan, C.P. (1982). Organization Theory. A Macro Perspective for Management. London: Prentice Hall.
Maritan, C.A. (2001). Capital Investments as investing in organizational capabilities: an empirically grounded process model. The Academy of Management Journal, 44(3), 513-531.
Matejun, M. (2013). Instruments Supporting Development in the Life Cycle of Small and Medium-Sized Enterprises. International Journal of Economic Sciences, II(1), 40-60.
Miller, D., & Friessen, P.H. (2014). A longitudinal Study of the corporate lifecycles. Management Science, 30(10), 1161-1183.
Mintzberg, H. (1984). Power and organization life cycles. Academy of Management Review, 9(2), 207-224.
Scott, M., & Bruce, R. (1987). Five stages of growth in small business. Long Range planning, 20(3), 45-52.
Squicciarini, M., & Le Mouel, M. (2012). Defining and Measuring Investment in Organizational Capital: Using US Microdata to Develop a Task-based Approach. OECD Science, Technology and Industry Working Papers, 2012/05. Paris: OECD Publishing. doi: http://dx.doi.org/10.1787/5k92n2t3045b-en
Surma, J. (2010). Rola analogii w podejmowaniu decyzji w zarządzaniu strategicznym małymi i średnimi przedsiębiorstwami. Warszawa: Oficyna Wydawnicza SGH.
Ustawa z dnia 2 lipca 2004 r. o swobodzie działalności gospodarczej (Economic Freedom Act), Dz. U. Nr 173, poz. 1807.
Voss, U., & Brettel, M. (2014). The Effectiveness of Management Control in Small Firms: Perspec-tives from Resource Dependence Theory. Journal of Small Business Management, 52(3), 569-587.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a CC BY-ND licence that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are asked to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access). We advise to use any of the following reserach society portals: