Factors in the Growth of Micro-Enterprises _ Part 2

Factors in the growth of micro-enterprises(Part 2): Exploring the implications

Lew PerrenBrighton Business School, University of Brighton, Mithras House, Lewes Road, Brighton BN2 4AT, UKTel: 01273 642979; Fax: 01273 642980; Email: [email protected]

Received: 5th January, 1999; Revised: 16th August, 1999; Accepted: 11th November, 1999

ABSTRACT

This research examines micro-enterprises pursuinggradual growth. The research ®ndings and implica-tions are provided in two parts. Part 1 was pre-sented in Volume 6, Number 4 of the Journal ofSmall Business and Enterprise Development(JSBED) (Perren, 2000). It developed an empiri-cally veri®ed framework that explains how growthwas in¯uenced by a myriad interacting factors; thisled to a discussion of the policy implications of theframework.

Part 2 explores the managerial implications ofthe framework. A diagnostic toolkit is systemati-cally developed to encourage micro-enterpriseowner-managers and advisers to explore the in¯u-ences on the interim growth drivers identi®ed inpart 1. It is hoped this will help them to highlightways of `compensating' de®cits in particular factorsand to think creatively about growth opportunities.The audience has changed from academics andpolicy-makers to owner-managers, so the diagnostictoolkit avoids technical language and employs aSocratic questioning approach to encourage free-thinking and self-analysis.

MANAGERIAL AND POLICY IMPLICATIONS

Key managerial and policy conclusions from

part 1

. Four interim growth drivers in¯uencemicro-enterprise development: owner'sgrowth motivation, expertise in managinggrowth, resource access and demand.

. The interim growth drivers are in turnin¯uenced by a myriad independent factors.

. Growth beyond the micro-enterprise phaserequires the combined in¯uence of theindependent factors to be positive on allfour interim growth drivers.

. There is the possibility of compensation,the phenomenon where a de®cit in one fac-tor's in¯uence against an interim growthdriver can be counterbalanced by another.

Managerial and policy conclusions from part 2

. The diagnostic toolkit provides micro-enterprise owner-managers and their advi-sers with a systematic way of exploring thein¯uences on the interim growth driversand highlighting ways of compensatingde®cits in particular factors.

. Adopting a Socratic questioning approachhelps unleash owner-managers' intimateknowledge about their businesses andempowers them to think creatively aboutgrowth opportunities.

. Owner-manager centred approaches likethis should be encouraged, as they can helpdevelop diagnostic skills and self-awareness.They may also reduce the risk of overdependence on external advisers.

KEY WORDS

Micro-enterprises, growth, factors, development,start-up, diagnostic

INTRODUCTIONThis research examines micro-enterprises pursuinggradual growth.1 The ®ndings and implicationsare provided in two parts. Part 1 was presented inVolume 6, Number 4 of the Journal of Small Busi-

Journal of Small Business and Enterprise Development, Volume 7, Number 1

# 2000 Henry Stewart Publications, ISSN 1462±6004, 58±68

ness and Enterprise Development (JSBED) (Perren,1999). It developed an empirically veri®ed frame-work from 16 case studies that explained howgrowth was in¯uenced by a myriad interactingfactors. This led to a discussion of the policyimplications of the framework.Part 2 is presented here and explores the man-

agerial implications of the framework. Theemphasis moves from a historic analysis of cases toa practical agenda for helping owner-managersand advisers achieve growth. This switch ofemphasis raises some methodological issues. First,although the agenda is now more practical, it isstill important that an audit trail of evidence ismaintained (Miles and Huberman, 1994). The con-version of elements from the framework in part 1to the diagnostic questions in part 2 needs to besystematic and transparent. Tables 1 and 2 provideexample conversions. They show how there is aneed for elements in the framework to be trans-lated into more general questions while retainingthe underlying meaning.Secondly, the audience has changed from

academics and policy makers to owner-managers.Therefore, it is important that the diagnosticquestions are presented in an appealing way thatwill make them easy to use. Technical languagewill be avoided (eg Curran et al., 1997; Perren etal., 1998),2 the personal pronoun `you' will beemployed to draw the owner-manager into theprocess (eg Kirschenbaum and Henderson, 1990)3

and a clear diagrammatic overview provided (egDe Bono, 1990; Eccles and Nohria, 1992).4 Themetaphor of a `diagnostic toolkit' will be used toconvey functionality and utility (eg Keizer and

Post, 1996).5 It must also be recognised that manyowner-managers will not wish to pursue growth(eg Hakim, 1989; Barkham et al., 1996; Watson etal., 1998) and that the diagnostic toolkit will be oflittle help to them. Thus, the early questions willfocus on the owner-managers' growth orientation(G1) to help them decide whether they wish tocontinue with the rest of the diagnosis.Thirdly, the diagnostic toolkit cannot o�er the

guarantee of future growth nor its prediction.The complexity of interacting elements is just toogreat (eg Runciman, 1999) and, as the part 1 ana-lysis showed, many of the factors that in¯uencegrowth are outside the control of the owner-manager. This may leave growth beyond thegrasp of some owner-managers, even when thereis the possibility of compensation betweenfactors. However, the diagnostic toolkit can o�er asystematic process for an owner-manager todevelop awareness of his or her circumstances, toexplore the potential for growth and perhaps toidentify opportunities that are currently beingneglected.The diagnostic toolkit will employ a Socratic

questioning approach as a way of unleashing theowner-manager's intimate knowledge (eg Curranet al., 1997; Perren et al., 1998)6 of his or herbusiness and galvanising it into analysis. Russell(1961) suggests that the Socratic method shouldbe used when we already have `knowledge tocome to a right conclusion, but have failed,through confusion of thought or lack of analysis,to make the best logical use of what we know'(p. 110). The diagnostic toolkit may also act as astimulus for owner-managers to investigate

Table 1: Example elements from an independent factor in¯uencing the interim growth driver resourceaccess (G3) (excerpt from Table 6 from part 1)

Resource access (G3)Independent factor

Elementnumber

Nature of in¯uence Case references

(F12) Debtors and creditors 1 . A supplier o�ering special terms of business canbe a positive in¯uence (in combination withfactor 8)

A,E,F,G,I,J,L,M,N

2 . A supportive bank can be a positive in¯uence B,E,F,G,H,J,K,M,P3 . Especially quick-paying customers and good

debtor management can be a positive in¯uence.C,D,G,K,N

4 . Poor debtor control can be a negativein¯uence.

F

5 . Cash based business with low stocks can be apositive in¯uence.

I,O

6 . A major bad debt can be a negative in¯uence. N

Perren

59Journal of Small Business and Enterprise Development

aspects of the business that have been overlooked,even when there is readily available information(eg Daniels and Henry, 1998).7 The intention isto encourage `soft analysis' by posing `the rightquestions' so `complex issues get opened up tothoughtful consideration instead of being closeddown prematurely by snap decisions' (Mintzberg,1998, pp. 222±223).8

THE DIAGNOSTIC TOOLKITNow the methodological issues have beenexplored, it is timely to present the diagnostictoolkit. The analysis in part 1 suggested that, for abusiness to achieve growth beyond the micro-enterprise phase, the combined in¯uence of theindependent factors on all four of the interimgrowth drivers (G1 owner's growth motivation,G2 expertise in managing growth, G3 resourceaccess and G4 demand) must be positive.9 Aninterim growth driver can be in¯uenced by anumber of di�erent independent factors. Thisintroduces the possibility of `compensation', thephenomenon where a de®cit in one factor's

in¯uence against an interim growth driver maybe counterbalanced by another factor's in¯uence.Figure 1 develops this theme by providing adiagnostic toolkit to help micro-enterpriseowner-managers and advisers explore the in¯u-ences on the interim growth drivers (G1 to G4),highlight ways of `compensating' de®cits in parti-cular factors (F1 to F16) and suggest methods tohelp them think creatively about developmentopportunities.The factors in Figure 1 are grouped into three

categories, illustrated by di�erent shapes.10 Hexa-gons represent those factors that will require adegree of self-awareness on the part of the owner-manager and, to some extent, may be viewed aspart of his or her psychological make-up. The psy-chological make-up of individuals that start upbusinesses has caused considerable discussion overthe years (eg Chell et al., 1991; Shaver and Scott,1991; Chell and Pittaway, 1998); indeed DarylMitton (1989) described research in this area as `atheory jungle'. The approach here is pragmatic; atrek through this theory jungle is outside the scope

Table 2: Example questions developed from elements in Table 1 (excerpt from Table 5 from part 2)

G3. Resource accessIndependent factors

Questions (please skip irrelevant questions) Audit trail

(F12) Debtors and creditors &(F8) Transferable network ofcontacts

Examining sources of resourceMaking the most of your suppliers. What special terms are you currently receiving from your suppliers?. How could you negotiate even better terms from your suppliers?. How could you negotiate stock on a sale or return basis?. What other supplier contacts do you have that may o�er favourableterms of trade?Making the most of your bank. How supportive is your bank?. What is your relationship with your bank manager?. How could you make the bank more supportive?. How could you keep the bank more informed of how business isgoing?Keeping control of your debtors. How quickly do you get paid?. How do you keep a watchful eye on people that owe you money?. How do you chase people that owe you money?. What are your terms and conditions of trade?. How could you improve your control of debtors?. What risks do you have of a major bad debt?. What steps could you take to reduce this risk?Keeping control of stock and cash. How could you reduce the amount of stock you hold?. What level of your business is cash based?. How could you increase the number of cash sales?

Element 1Element 1

Element 2

Element 3,4 & 6

Element 5

Factors in the growth of micro-enterprises (Part 2): Exploring the implications

60 Journal of Small Business and Enterprise Development

of this paper. The hexagons merely suggest, in acommon-sense way, that diagnosing these factorswill require the owner-manager to consider his orher own wishes and feelings.Squares represent those factors (mostly external)

that exercise a pervasive in¯uence, rather like grav-ity.11 The owner-manager may be able to adjustthe strategy of the micro-enterprise to take accountof these factors or look for compensation, but heor she can exercise little in¯uence over the actual

factor. Octagons represent those factors (mostlyinternal to the business) over which the owner-manager has more control. There has been a long-running debate in the strategy literature regardingthe level of control that a business can have over itsa�airs (eg Whittington, 1993) and various schoolsof thought have emerged (eg Mintzberg, 1998).12

Becoming entangled in this debate would be anunhelpful distraction, so a pragmatic approach isadopted. Indeed, some researchers in the strategy

Growth of Micro-Enterprise

G2. Expertise inManagingGrowth

G1. Owner’sGrowth

Motivation

G3. ResourceAccess

G4. Demand

F1. Desire tobe one’s own

boss

F4. InnovatorF3. Activerisk taker

F2. Desire tosucceed

F3. Activerisk taker

F2. Desire tosucceed

F5. Transferablepersonal capital

F12. Debtors and creditors

F11. Active professional

advisers

F10. Key employees

F9. Family andinvesting friends

F8. Transferablenetwork

F7. Transferablesupport skill

F6. Transferableprimary skill

F13. Societaland ‘outer’

factors

F16. Competitivedynamics

F15. Productsector

F14. State ofeconomy

F3. Activerisk taker


F10. Key employees



F14. State ofeconomy

F16. Competitivedynamics

F10. Key employees



Key

Factors that require owner-manager self-awareness.

Factors that are pervasive and the owner-manager has little control over.

Factors that the owner-manager has more control over.

Interim Growth Drivers.

Growth of Micro-enterprise.

Figure 1: Empirically veri®ed diagnostic toolkit for micro-enterprise growth

Perren


area have themselves recently been calling for morepragmatic approaches (eg Jones, 1998).13 Thesquare and octagons categories are not intended tobe absolute, they merely indicate, in a common-sense way, the level of control that an owner-manager is likely to have over a given factor.

Now an overview of the diagnostic toolkit hasbeen provided, it is timely to focus on the diagno-sis and compensation of the interim growth dri-vers. Each interim growth driver will beconsidered in turn, and a table detailing the diag-nostic questions provided.

Diagnosing and compensating for owner's

growth motivation (G1)

Table 3 converts elements from the framework inpart 1 to provide questions that diagnose and com-pensate for owner's growth motivation (G1).The questions focus on ®ve potential in¯uencingfactors: desire to succeed (F2); desire to be òne'sown boss' (F1); active risk taker (F3); family and

ìnvesting' friends etc (F9) and competitivedynamics (F16).

Diagnosing and compensating for expertise in

managing growth (G2)

Table 4 converts elements from the framework inpart 1 to provide questions that diagnose and com-pensate for expertise in managing growth (G2).The questions focus on ®ve potential in¯uencingfactors: transferable support skills (F7); keyemployees (F10); family, ìnvesting' friends etc(F9); active professional advisers (F11) and transfer-able network of contacts (F8).

Diagnosing and compensating for resource

access (G3)

Table 5 converts elements from the framework inpart 1 to provide questions that diagnose and com-pensate for resource access (G3). The questionsfocus on seven potential in¯uencing factors: activerisk taker (F3); debtors and creditors (F12); transfer-

Table 3: Diagnosing and compensating for the interim growth driver owner's growth motivation (G1)

G1. Owner's growth motivationIndependent factors


Asserting your ambitions(F2) Desire to succeed . What are your hopes for your business over the next ten years?

. What are your business ambitions?

. How do you measure business success?

. How important is business growth to you compared with yourother measures of business success?. How important is having a personal control of most aspects of thebusiness to you?

Element 1& 2Element 3

(F1) Desire to be òne's ownboss' and (F3) active risktaker.

. How do you feel about delegating aspects of the business?

. How large does your business need to be for you to feel for secure?

. How much will you need to grow the business to achieve this size?

Element 1

(F9) Family, ìnvesting'friends etc(F16) Competitive dynamics

Re¯ecting on your ambitions. What family problems might a�ect your drive?. What steps you can take to reduce family friction?. What scale does your business need to be to achieve the level ofincome you want?. What competitive pressures might cause you to increase the scale ofyour business?. What circumstances might cause margins to be reduced so you needto increase volumes to maintain your current pro®t level?. What circumstance might cause your suppliers to expect largervolume orders?

Summing-up. How would you summarise your growth motivation?. What are the opportunities for compensation between factors?. What actions are you going to take now?

Element 1

Element 1



able network of contacts (F8); transferable personalcapital (F5); family, ìnvesting friends' (F9); keyemployees (F10) and the state of the economy (F14).

Diagnosing and compensating for demand (G4)

Table 6 converts elements from the framework inpart 1 to provide questions that diagnose and com-pensate for demand (G4). The questions focus on11 potential in¯uencing factors: the state of theeconomy (F14); societal and other òuter' factors(F13); product sector and market segments (F15);competitive dynamics (F16); transferable networkof contacts (F8); transferable primary skills (F6);innovation (F4); active risk taker (F3); desire tosucceed (F2); key employees, partners etc (F10);and family, ìnvesting friends' etc (F9).

CONCLUSIONS AND IMPLICATIONSThe framework in part 1 provided a ¯exiblestructure that contributed a clear agenda foranalysing a micro-enterprise's growth, whilstallowing speci®c issues to be investigated withintheir environmental context. It enabled the host offactors that might a�ect the growth of micro-enterprises to be investigated. The cases suggestedthat for a ®rm to achieve growth beyond themicro-enterprise phase, the combined in¯uence offactors on all four of the interim growth drivershad to be positive. This introduced the possibilityof `compensation', the phenomenon where a de®-cit in one factor's in¯uence against an interimgrowth driver could be counterbalanced byanother factor's in¯uence.

Table 4: Diagnosing and compensating for the interim growth driver expertise in managing growth (G2)

G2. Expertise in managinggrowthIndependent factors


(F7) Transferable supportskills

Reviewing your management/administrative skills. What management skills have you developed from your previousjob(s)?. What experience do you have of managing sta�?. How familiar are you with the support systems your type ofbusiness will need (eg bookkeeping, stock-control, customer records)?. How do you feel about undertaking such management tasks?

Element 1& 2

(F10) Key employees,partners etc

Reviewing others' management/administrative skills. How could your current/future employees help you with thesetting-up and running of support systems (eg bookkeeping, stock-control, and customer records)?. What support systems have your employees already set-up?. How well are they working?. Who could you employ to help set-up and run your supportsystems?

Element 1& 2

(F9) Family, ìnvesting'friends etc

. How could members of your family help you with the setting-upand running of support system?. What members of your family have worked in an o�ce before orhave bookkeeping skills?

Element 1

(F11) Active professionaladvisers

. How could your professional advisers (eg accountant, bank-manager etc) help with the setting-up and running of support systems?. What steps you could take to obtain such advice?

Element 1

(F8) Transferable networkof contacts

. Who do you know who has set-up a similar type of business?

. What questions could you ask them about their support systems?

. How could you persuade them to let you have copies of theirinvoices, terms of trade, stock control systems etc?

Element 1

Summing-up. How would you summarise the factors in¯uencing expertise inmanaging growth?. What are the opportunities for compensation between factors?. What actions are you going to take now?

Perren


Table 5: Diagnosing and compensating for the interim growth driver resource access (G3)

G3. Resource accessIndependent factors


Re¯ecting on your attitude to risk(F3) Active risk taker . How do you feel about taking risks to obtain the resources for

growth?Element 1& 2

. How do you feel about taking personal ®nancial risks?

. What level of personal ®nancial risk will you need to take to pursuegrowth?. What ways are there for you to reduce your personal risks?. How will your attitude to risk in¯uence your willingness to tap thesources of resource examined below?

Examining sources of resourceMaking the most of your suppliers

(F12) Debtors and creditors &(F8) Transferable network ofcontacts

. What special terms are you currently receiving from your suppliers?

. How could you negotiate even better terms from your suppliers?

. How could you negotiate stock on a sale or return basis?

. What other supplier contacts do you have that may o�er favourableterms of trade?Making the most of your bank. How supportive is your bank?. What is your relationship with your bank manager?. How could you make the bank more supportive?. How could you keep the bank more informed of how business isgoing?Keeping control of your debtors. How quickly do you get paid?. How do you keep a watchful eye on people that owe you money?. How do you chase people that owe you money?. What are your terms and conditions of trade?. How could you improve your control of debtors?. How likely is it that you will su�er a major bad debt?. What steps could you take to reduce this risk?Keeping control of stock and cash. How could you reduce the amount of stock you hold?. What level of your business is cash based?. How could you increase the number of cash sales?

Element 1Element 1

Element 2

Element3, 4 & 6

Element 5

(F5) Transferable personalcapital

Investing your own money. What money or assets do you have that could support growth?. How willing are you to use your personal money or assets?. How could you use your personal assets as security for a loan?. What ways could you use your funds and still keep them protected?

Element 1& 2

(F9) Family, `investing'friends etc

(F8) Transferable networkof contacts

(F10) Key employees,partners, etc

Investing your family's or friends' money. What money or assets does your family or friends have that couldbe used to grow the business?. How willing would they be to let you use their money or assets?. How could you use their assets as security for a loan?. What ways could you protect their money?. What personal contacts do you have that could give you access tofunds?. What local business people do you know who might be willing toinvest in your business?. Who do you know that might become a partner to help you with®nancing start-up or expansion?

Element 1

Element 1

Element 3



Part 2 has explored the managerial implicationsof the framework presented in part 1. A diagnostictoolkit has been systematically developed toencourage micro-enterprise owner-managers andadvisers to explore the in¯uences on the interimgrowth drivers. It is hoped this will help them tohighlight ways of `compensating' for de®cits inparticular factors and to think creatively aboutgrowth opportunities.The audience has changed from academics and

policy makers to owner-managers, so the diag-nostic toolkit avoids technical language andemploys a Socratic questioning approach to en-courage free thinking and self-analysis. Adoptinga Socratic questioning approach will hopefully helpunleash owner-managers' intimate knowledgeabout their businesses and empower them to thinkcreatively about growth opportunities. By empow-ering owner-managers to question their own situa-tion, the diagnostic framework can o�er timelyand tailored support without exorbitant cost. Someform of participatory action (Reason, 1994) maybe appropriate, where an owner-manager uses thediagnostic toolkit with a business counsellor todevelop growth strategies for the future. Owner-manager centred approaches like this should beencouraged, as they can help develop diagnosticskills and self-awareness. They may also reduce therisk of over dependence on external advisers.The author hopes the diagnostic toolkit will be

helpful to micro-enterprise owner-managers andadvisers in their quest for growth. The authorwould welcome readers' feedback on their applica-tion of the diagnostic toolkit.

ACKNOWLEDGEMENTSThe author is grateful to Professor Aidan Berry,Professor John Bessant, Professor Robert Black-burn, Professor Tom Bourner, Peter Hovell, PeterL. Jennings, Barry Le Scherer, Dr David Paskins,Professor Monder Ram, Seymour Roworth-Stokes, Professor Adrian Woods and the anon-ymous reviewers for their helpful feedback on thisresearch.

NOTES1. The European Commission has de®ned micro-

enterprises as ®rms with fewer than tenemployees (Stanworth and Gray, 1991). Theterm is now accepted by the small businessresearch community; for example, Robertson(1994) and Storey (1994) have both referred tomicro-enterprises. For this research, gradualgrowth is de®ned as taking four years or moreto grow beyond the micro-enterprise phase.

2. Curran et al. (1997) and Perren et al. (1998)both found that owner-managers lack manage-rial and technical vocabularies, although theymay well have an understanding of underlyingconcepts.

3. Kirschenbaum and Henderson (1990) note thatthe use of personal pronouns by Carl Rogerswas `a subtle yet signi®cant factor in his wide-spread impact'. They observe that peoplewould comment, `I felt as though he wereaddressing me personally . . . even whenRogers was speaking to hundreds or eventhousands of people' (p. 5).

4. De Bono (1990) suggests that images `can be

Table 5: Continued

(F10) Key employees,partners, etc

Making the most of employees. What employees do you have that are willing to work longer hoursor more ¯exibly than normal?. How can you encourage employees to be supportive of thebusiness?. What employees do you have in critical roles?. How well are they performing in these critical roles?. How could you improve their performance?

Element 1& 2

(F14) The state of theeconomy and itsmanagement bygovernment

Looking out for changes in the law. What changes in the law may stop some of your working practices?. What local authorities or other agencies may in¯uence how you canuse your resources?

Summing-up. How would you summarise the factors in¯uencing resource access?. What are the opportunities for compensation between factors?. What actions are you going to take now?

Element 1

Perren


Table 6: Diagnosing and compensating for the interim growth driver demand (G4)

G4. DemandIndependent factors


Scanning and actingScanning and acting on broad changes

(F14) The state of theeconomy and itsmanagement bygovernment

. What are the main trends in the economy?

. What are the newspapers saying about the economy?

. What is the local economy like? How is it di�erent from thenational economy?. What steps should you take in the light of the economic situation?. How could an economic downturn be to your advantage?. How could you take advantage of government deregulation orother major economic policies?

Element 1& 2

Element 3Element 4

(F13) Societal and other`outer' factors

. What are the changes in society's attitudes that may in¯uence yourbusiness (eg attitudes on health, leisure, pollution etc.)?. How are these changes in attitude causing changes in the law?. How will potential legal changes in¯uence your business?. What steps can you take to exploit or avoid these changes?Scanning and acting on close changes

Element 1& 2

(F15) Product sector andmarket segments

. How is the general sector your business trades in performing?

. What are the changes in competition?

. What changes are occurring in the number and size of competitors?

. What steps can you take to remain competitive?

. How could you take advantage of the protection of a majorcustomer?. What types of customer does the market serve?. What are the opportunities for you to target a particular type ofcustomer or focus on a particular geographic area?

Element 1& 2

Element 3Element 4& 5

(F16) Competitive dynamics . What type of customers are you targeting at the moment?. How could you change the type of customers that you aretargeting?. What large competitors are in your geographic area?. What are the trends in competition in the area?

Element 2& 3Element 1,4 & 6

(F16) Competitive dynamics& (F8) Transferable networkof contacts(F13) Societal and other`outer' factors

. What in¯uence would expansion have on the competitors that youface?. How close is your relationship with your customers?. How could you improve the closeness of your relationship withyour customers?. What are the changes in the local population (eg age, wealth, andnumbers)?. What in¯uence will these changes have on your business?. What steps should you take in the light of these changes?

Element 6Element 1

Element 3& 4

Exploring skills and attitudes that in¯uence demandRe¯ecting on your skills and attitudes

(F6) Transferable primaryskills

(F4) Innovation

. What core technical or sales expertise do you have?

. What core technical or sales areas are you less con®dent in?

. How experienced a negotiator are you?

. What steps can you take to exploit or plug the gaps in yourexpertise?. How good are you at spotting market opportunities?. How often do you think of new marketing opportunities for yourbusiness?. How often do you think of new types of customers you couldapproach?


Element 1& 2



more powerful than words for conveyingideas because, unlike words, they exist comple-tely at one moment in time' and they engageright-brain thinking that perceives patternsand relationships. Eccles and Nohria (1992)also point to the importance of diagrams whencommunicating a message to managers, theysuggest that the success of the Boston Consult-ing Group's growth/share matrix is in part dueto the ease of its pictorial representation.

5. Keizer and Post (1996) suggest that metaphorso�er a powerful way for managers to com-municate change. They suggest that Phillip'suse of the Centurion metaphor for its changeprogramme may have evoked the image of

the power of the famous tank and the formal-ity of the o�cer in the Roman army.

6. Curran et al.'s (1997) investigation of pricingin small businesses found that, while the meth-ods of information provision were informal,they supported quite sophisticated decisionmaking. Perren et al. (1998) found thatowner-managers of successful growth-orien-tated service sector businesses developed inti-mate tacit knowledge of their businesses.

7. Daniels and Henry (1998) suggest that man-agers can become prisoners of their mentalmodels and only accept `con®rmatory' infor-mation. The diagnostic toolkit may help man-agers to breakout of their mental cage.

Table 6: Continued

. How focused are you on the technical side of the business comparedwith its marketing?. What steps can you take to become even more focused on themarket?

(F3) Active risk taker

(F2) Desire to succeed

. How willing are you to take on challenging or risky orders?

. When do you turn down customers because their requirements aretoo large or too risky?. When do you need to take on larger or more di�cult orders tostimulate growth?. What steps can you take to assess the risk of taking on larger ormore di�cult orders?. What particular markets do you like to serve even though there aremore lucrative customers elsewhere?. Why do you like to serve these markets?. What particular technical areas do you like to operate in eventhough there are more pro®table areas?. What new markets could you move to?

Element 1& 2

Element 1

(F10) Key employees, partnersetc & (F9) Family, `investing'friends etc

(F10) Key employees, partnersetc

Re¯ecting on others' skills and attitudes. What employees, partners or family members have good salesabilities?. How can you make the most of them?. What problems might arise with such employees, partners or familymembers?. What employees or partners have key technical skills?. How can you make the most of them?. What customer contacts do your employees have that could behelpful?. How can you attract employees or partners that have customercontacts?. How can you make the most of such contacts?. What are the risks of an employee or partner setting-up incompetition?What steps can you take to stop partners setting-up in competition?

Summing-up. How would you summarise the factors in¯uencing demand?. What are the opportunities for compensation between factors?. What actions are you going to take now?


Element 3

Element 5

Element 4

Perren


8. The following websites helped with framingopen questions: www.ifaassociates.com,www.williecrawford.com, www.consults-kills.com and talec.ntu.ac.uk.

9. An intervening factor emerges as a function ofan independent factor(s) acting in a givensituation, `and helps to conceptualise andexplain the in¯uence of the independent' fac-tor(s) on the dependent factor (Sekaran, 1992,p. 70).

10. This idea was stimulated by one of the anony-mous reviewers.

11. This example was taken from another source,but the precise reference cannot be remembered.

12. Mintzberg (1998) provides a helpful summaryof the di�erent schools of thought.

13. Jones (1998) calls for observers not to be over-whelmed by the di�erent strategic perspectivesand that they should be `melded together in apractical situation' (p. 427).

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Dr Lew Perren, University of Brighton, Brighton

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Factors in the Growth of Micro-Enterprises _ Part 2

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