MASTER DEGREE PROJECT THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30 credits
PROGRAMME OF STUDY: Global Management
AUTHOR: Anna-Catherina Franziska Puth, Jacqueline Scharunge JÖNKÖPING May, 2020
Managing Strategic Entrepreneurship in SMEs
Top Managers Engaging in Advantage-Seeking and
Opportunity-Seeking
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Acknowledgement
First and foremost, we would like to thank our interview candidates for dedicating their precious time participating in our study. We thank them for contributing their personal experiences and sharing valuable insights from their professional roles in a strategic context. Further, we would like to express our gratitude for maintaining an enriching and informative position despite our persistency during the interview process. Without their help the study would not have been possible.
Second, we would like to thank our supervisor Duncan Levinsohn for mentoring us throughout the process of our master thesis. Notwithstanding the difficult, spatial circumstances, he supported us with constructive and enriching seminars. On the one hand we appreciated the incentives given but also on the other side we enjoyed the freedom to design the study according to our preferences.
We would also like to thank our seminar group, who provided us with valuable feedback and recommendations during our seminars. Last but not least, we would like to thank our friends and family for their endless support during our entire course of study as well as for their moral support during the last four months.
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Master Thesis in Global Management
Title: Managing Strategic Entrepreneurship in SMEsAuthors: Anna-Catharina Franziska Puth and Jacqueline Scharunge Tutor: Duncan Levinsohn
Date: May 18th, 2020
Key terms: Strategic Entrepreneurship, Top Manager, SME, Performance-seeking, Opportunity-seeking, Entrepreneurial Orientation
Abstract
Background: Small and medium-sized companies (SMEs) are major contributors to wealth, economy as well as society. In today’s uncertain times, the challenge for SMEs’ top managers lies in choosing the right strategic approach to generate a competitive advantage and wealth. Research Problem: Due to the ambiguous business context, the strategic approach of SMEs is of high importance to ensure a flexible, growth, and value-generating approach. Top managers are exposed to the difficulty of applying a strategy, which ensures performance and enables the creation of newness. The concept of strategic entrepreneurship consists of advantage-seeking and opportunity-seeking and aims to ensure wealth creation. This is done by combining these two dimensions to ensure strategic renewal within established organizations. Until now, especially in SMES, the concept of strategic entrepreneurship has not been studied substantial enough from a top managers perspective. We consider the field decisive to analyze, ensuring a strategic approach for top managers in SMEs to help manifest the competitive advantage in today’s ambiguous business context.
Research Purpose: To explore how top managers are managing the two dimensions, namely the performance (advantage-seeking) and the entrepreneurial (opportunity-seeking) dimension, of strategic entrepreneurship in SMEs.
Research Questions: (1) How do top managers engage in strategic entrepreneurship in SMEs? (2) How do top managers manage the relationship between advantage-seeking and opportunity-seeking in SMEs? (3) How does the SME context impact top managers in managing SE? Method: Ontology: Relativism - Epistemology: Social constructionism - Research approach: Qualitative study - Methodology: Study based on exploratory qualitative interviews - Data collection: In-depth interviews - Sampling: Purposive sampling with 10 SME top managers and 2 SME consultants - Data Analysis: Content analysis with tree-diagram
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Conclusion: This study contributes by demonstrating the cognitive as well as the contextual level top managers are utilizing to engage in strategic entrepreneurship in the performance-oriented SME context. Moreover, our contributions are associated with various managerial support actions. To demonstrate these, we developed a model which outlines top managers’ cognitive-oriented engagement towards the advantage-seeking and opportunity-seeking dimension of SE in SMEs.
Managerial Implications: We present three managerial implications for top managers who are active in SE as well as for aspiring top managers and SME owners. The practical recommendations can support top managers’ engagement in strategic entrepreneurship from an individual as well as an organizational perspective.
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List of Figures ... VII List of Tables ... VII List of Abbreviations ... VIII
1 Introduction ... 1
1.1 Background ... 1
1.2 Research Problem ... 2
1.3 Research Purpose... 4
2 Literature Review ... 5
2.1 The Roots of Strategic Entrepreneurship ... 5
2.1.1 Ensuring Performance within Strategic Entrepreneurship ... 6
2.1.2 Ensuring the Creation of Newness within Strategic Entrepreneurship ... 7
2.1.3 Model of Strategic Entrepreneurship ... 9
2.1.2 Key Components of Strategic Entrepreneurship ... 11
2.2 Top Managers in Strategic Entrepreneurship ... 14
2.2.1 Performance Dimension ... 14
2.2.2 Entrepreneurial Dimension ... 15
2.2.3 Top Manager’s Entrepreneurial Orientation ... 16
3 Research Method ... 19 3.1 Research Methodology ... 19 3.1.1 Research Philosophy ... 19 3.1.2 Research Approach ... 20 3.1.3 Research Strategy... 21 3.2 Methods ... 22 3.2.1 Sampling Strategy ... 22 Table of Contents
V 3.2.2 Semi-structured interview ... 25 3.2.3 Interview Construction ... 26 3.3 Data Analysis ... 29 3.3.1 Content Analysis ... 29 3.3.2 Analysis Report ... 30 3.4 Ethical Consideration ... 31 3.5 Research quality ... 33 3.5.1 Credibility ... 33 3.5.2 Transferability ... 33 3.5.3 Dependability ... 34 3.5.4 Confirmability ... 34 4 Findings ... 36
4.1 Tree Diagram based on Content Analysis ... 36
4.2 Categories and Main Categories based on Content Analysis ... 36
5 Analysis & Discussion ... 42
5.1 Top Manager’s Approach for Strategic Entrepreneurship in SMEs ... 42
5.1.1 Vision ... 42 5.1.2 Managerial Support ... 44 5.1.2.1 Collaboration ... 46 5.1.2.2 Team Orientation... 47 5.1.2.3 Objectives ... 48 5.1.2.4 Control ... 48
5.1.3 Strategic Resource Allocator ... 49
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5.1.3.2 Entrepreneurial Dimension... 50
5.1.4 Top Manager’s Leadership in Strategic Entrepreneurship ... 52
5.1.5 Top Manager Mindset ... 54
5.2 Organizational Implications ... 56
5.2.1 Effects of SME Context ... 56
5.3 Top Manager Engagement in SE in SMEs ... 59
6 Conclusion ... 63
6.1 Summary of Conducted Study ... 63
6.2 Major Contributions Related to Research Purpose and Questions ... 64
7 Managerial Implications ... 67
7.1 Empowering Leadership & Top manager’s Self-awareness ... 67
7.2 Establish a Culture of Collaboration and Commitment ... 68
7.3 Engage in Continuous Training ... 69
8 Limitations ... 71
9 Further Research ... 73
Reference List ... 75
Appendix ... 79
Appendix 1: Top Manager and Consultant Information ... 79
Appendix 2: Top Manager’s Entrepreneurial Orientation ... 80
Appendix 3: Interview Guide for Top Managers in SMEs ... 81
Appendix 4: Interview Guide for SME Consultants ... 83
Appendix 5: Form of Informed Consent for Top Manager ... 84
Appendix 6: Form of Informed Consent for Consultant ... 85
Appendix 7: Tree-Diagram from Content Analysis ... 86
VII
List of Figures
Figure 1: Research Overview for Strategic Entrepreneurship ... 5
Figure 2: Adapted Model of Strategic Entrepreneurship (Based on Ireland et al., 2007) ... 9
Figure 3: Practice Model of Strategic Entrepreneurship (Based on Ireland et al., 2003) ... 10
Figure 4: Key Components of Strategic Entrepreneurship (Based on Kyrgidou and Hughes, 2010) ... 11
Figure 5: Self-constructed Model of Top Managerial Influence on SE ... 17
Figure 6: Analysis’ Tree-diagram Top Manager Role ... 37
Figure 7: Analysis’ Tree-diagram Strategic Activities ... 38
Figure 8: Analysis’ Tree-diagram Creation of Opportunities ... 38
Figure 9: Analysis’ Tree-diagram Leadership ... 39
Figure 10: Analysis’ Tree-diagram Mindset ... 40
Figure 11: Analysis’ Tree-diagram Human Resource ... 40
Figure 12: Analysis’ Tree-diagram Collaboration ... 41
Figure 13: Analysis’ Tree-diagram Effects of SMEs ... 41
Figure 14: Contrast of Self-constructed Model of Top Managerial Influence on SE ... 59
List of Tables
Table 1: Criteria for Interview Candidate ... 24Table 2: SME Definition of European Commission ... 25
Table 3: Interview Sample Top Manager ... 27
Table 4: Interview Sample Consultant ... 27
Table 5: Example of Probing ... 28
Table 6: Example of Laddering Up ... 29
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List of Abbreviations
B2B Business to Business
B2C Business to Customer
CE Corporate Entrepreneurship
CEO Chief Executive Officer
COVID-19 Coronavirus Disease 2019
EO Entrepreneurial Orientation
KPI Key Performance Indicators
SE Strategic Entrepreneurship
SM Strategic Management
SME Small and Medium-sized Enterprises
TM Top Manager
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1 Introduction
__________________________________________________________________________________________ The first part of the thesis provides the reader with an introduction on the current threat SMEs face due to uncertainty which endangers their long-term survival. Thus, the reader gets an understanding of the increasing importance to have managerial concepts in place in order to manage the business successfully. To do so, the concept of strategic entrepreneurship is introduced. Bearing in mind the integral position of top managers, we outline our research questions to examine the influence of top managers on strategic entrepreneurship within the SME context.
___________________________________________________________________________ 1.1 Background
Companies nowadays are confronted with a highly competitive and unstable business context. Facing a volatile, uncertain, complex and ambiguous (VUCA) context, a clear foresightedness is not given (Bennett & Lemoine, 2014). Moreover, the complexity for established companies to maintain their competitive advantage and their overall growth increased (Burgelman, 1984). Thus, managing a company in VUCA times enhances the scope of complexity for top managers. Besides reaching the overall objectives, they are required to demonstrate success by dealing with unknown and complex situations (Bennett & Lemoine, 2014; Knight, 1933). Hence, organizations and in particular their top managers, are exposed to an increasingly ambiguous context while executing their daily business. Moreover, the pace and complexity of external changes are increasing. This also makes it harder to maintain overall performance as well as to sustain a competitive advantage (Levey & Levey, 2019). Due to this, established businesses are confronted to identify and exploit what is done right correctly compared to rivals and simultaneously explore what needs to be accomplished to stay successful in the future (Ireland & Webb, 2007; Hitt, Ireland, Camp, & Sexton 2001). Therefore, it is important to reorganize the organization’s strategic approach to be able to cope with unforeseeable changes (Kuratko, Hornsby, & Hayton, 2015). This requires managers to develop and install a strategic approach which enhances companies’ responses towards the fast-changing competitive environment in a more agile way (Dess, Lumpkin, & Covin, 1997).
At the same time as the VUCA phenomenon emerged, the field of entrepreneurship, especially entrepreneurship within existing companies, attracted literature’s as well as practitioner’s interest. Specifically, the ability to use uncertain business conditions with an opportunity-driven
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perspective received importance for top managers to consider. Researchers suggest that an entrepreneurial approach can be key for organizational success and long-term survival (Chittipeddi & Wallett, 1991). Thus, entrepreneurship seems to enhance the ability to manage the with the VUCA context associated changes effectively. This results mostly from to the opportunity-driven approach which was found to support managers’ and employees’ commitment when being confronted with the organizational transformation (Rule & Irwin, 1988).
The concept of strategic entrepreneurship (SE) contains central elements, which can aid top managers of established organizations to deal with the VUCA context. The concept itself aims to help managers to allocate firms’ resources and intentions in a balanced way to reach the competitive advantage (Hitt, Ireland, Camp, & Sexton, 2001).Therefore, the concept picks up on the need to exploit what is done correctly and utilize the uncertain conditions to identify growth opportunities. Overall, SE constitutes a strategic approach to enhance value creation of firms. The two dimensions of SE incorporate a performance as well as an entrepreneurial dimension. The performance dimension refers back to the company’s actions to secure the overall survival, whereas the entrepreneurial dimension involves actions to identify and exploit new opportunities within and outside of the organization. Overall, SE can manifest a firm’s competitive advantage when resources are successful managed in the advantage-seeking as well as opportunity-seeking dimension of SE (Hitt, Ireland, Sirmon, & Trahms, 2011; Hitt et al., 2001).
1.2 Research Problem
Due to the increasing complexity of today’s business world, companies are confronted with the challenge to maintain overall performance but also generating innovative approaches to establish a differentiated competitive advantage (Hitt et al., 2001; Ireland, 2007; Ireland, Hitt, & Sirmon, 2003). Overall, the challenge to manage advantage-seeking and opportunity-seeking is given to be incorporated in the company’s strategic orientation (Ireland & Webb, 2007). Thus, the attention is drawn towards the company’s strategic approach to overcome the managerial challenge. Till now the research field of SE focused mainly on larger organizations (Ireland, 2007). Moreover, the field of SE has been not addressed under the concept of SE within smaller organizations.
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This is of evidence as SMEs play a major economic role. For example, in 2013 88.8 million jobs within the European Union were provided by more than 21 million SMEs (European Commission, 2020). Due to their outlined impact, their strategic approach to address the VUCA context seems to be important. Therefore, SE with the two relating dimensions can be a practical strategic approach implemented by top managers in SMEs. Often, SMEs already embody an entrepreneurial spirit due to their entrepreneurial roots. Further, the relatively small size was found to enhance the organization’s ability to adapt to strategic changes compared to larger organizations (Ong, Ismail, & Goh, 2010). Those beneficial conditions can enhance as well as stimulate the execution of SE. However, due to their limited access to resources compared to corporate organizations, the focus of SMEs resource allocation is mainly performance-oriented (Lee, Lim & Tan, 1999). As this endangers the company’s flexibility and ability to adapt to change, SE can be seen to aid SMEs top managers to manage advantage-seeking as well as opportunity-seeking.
Despite this, the current state of research does not provide insights on how SE is managed within SMEs. SE researchers acknowledge the pivotal influence of top managers on the successful execution of SE (Hitt et al., 2001). However, until now, practitioners, especially top managers, who engage with SE within the SME context, are left without insights on how to manage the two-sided concept. This is linked to the identified research gap, which states that actions applied by top managers concerning the process of SE are not studied enough to meet the growing interest (Kuratko, Hornsby, & Bishop, 2005; Kuratko et al., 2015). Furthermore, literature dealing with organizational entrepreneurship focuses mainly on the middle management’s influence rather than on the top management (Burgelman, 1984; Guth & Macmillan, 1986). The focus to specialize on top managers is confirmed due to researchers’ identified importance and relevance to study the top manager within the concept of SE (Ireland, Covin, & Kuratko, 2009, Kuratko et al., 2005; Kuratko, Ireland, & Hornsby, 2001). Further, the interest is given for SME managers as well as for SME owners and employees concerned with strategic reorganization, to understand how SME top managers can manage and influence the two dimensions of SE within an SME.
Building on the identified importance of engaging in the field of SE, our research contributes by shedding light on the managerial approach top managers apply to establish a performance and entrepreneurial focus within SMEs. Due to the identified need of practical research within the field of top managerial SE activities, our study aims to contribute to the process of acquiring
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new insights in the field of managerial actions towards SE within SMEs. Further relevance for our study is given as the management plays a crucial role in influencing the overall organizational entrepreneurship success and the employees’ willingness and commitment towards this component (Burgelman, 1983; Kuratko et al., 2005). Based on the identified positive effect top managers’ support has on SE, our study aims to examine top managers’ engagement which leads to the managerial support function (Kuratko, Hornsby, & Covin, 2014).
1.3 Research Purpose
We conduct this study as we believe that the strategic entrepreneurship can aid SME top managers strategic approach in managing resources effectively towards the performance as well as towards the entrepreneurial dimension within SMEs. Due to the two-sided SE focus, it can encourage an SME’s strategic approach to innovate, grow, and contribute value (Hitt et al., 2001). However, this depends on how top managers manage the two dimensions within the SME context. Consequently, our thesis has the following purpose:
To explore how top managers are managing the two dimensions, namely the performance (advantage-seeking) and the entrepreneurial (opportunity-seeking) dimension, of strategic entrepreneurship in SMEs
Therefore, we apply the following research questions:
RQ: How do top managers engage in strategic entrepreneurship in SMEs?
- How do top managers manage the relationship between advantage-seeking and opportunity-seeking in SMEs?
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2 Literature Review
__________________________________________________________________________________________ The second part of our study provides an overview of the theoretical background of SE. Therefore, we elaborate on the underlying key components of SE. Those are corporate entrepreneurship, strategic management, and entrepreneurship. This is completed by a linkage of top manager managerial actions within the concept of SE.
___________________________________________________________________________ The literature review provides central perspectives of SE in order to establish the theoretical construct which helps to gain insights on our outlined research questions. Therefore, the concept of SE will be outlined based on the inclusion of three main concepts where literature connects to the origin of SE. Accordingly, the corporate entrepreneurship concept (CE), the strategic management concept (SM), as well as entrepreneurship will be included in the theoretical analysis of SE. This supports the holistic understanding of the two dimensions (performance and entrepreneurial) SE refers to. Further, we connect the outlined SE literature to top managers’ managerial influence referring to the two dimensions of SE. The research overview of our study is demonstrated in figure 1.
Figure 1: Research Overview for Strategic Entrepreneurship
2.1 The Roots of Strategic Entrepreneurship
SE seeks to create a competitive advantage by combining a performance dimension with an entrepreneurial dimension within established organizations (Hitt et al., 2001). Therefore, the
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concept refers to advantage-seeking actions (performance dimension) as well as opportunity-seeking actions (entrepreneurship dimension). Hence, SE can be seen as the firm’s actions to ‘‘simultaneously exploit today’s competitive advantages while exploring for the innovations that will be the foundation for tomorrow’s competitive advantages’’ (Ireland & Webb, 2007, p. 50). SE does not aim to create a new business, rather describes it a dynamic management approach for a firm’s strategy (Kuratko et al., 2015). The concept is referring to a resource-based view. Therefore, it applies to established companies regardless the size as well as time of establishment (Hitt et al., 2001; Kuratko, 2007). The concept itself is relatively modern with roots in the year 2000. Due to the increasing relevance for established companies to engage in growth and performance dimensions, the journal “Strategic Entrepreneurship Journal” devotes a special focus on the concept since 2007.
However, the nature of SE is a highly complex one as various dimensions are integrated and associated with it. Examining literature shows, that the origin of SE can be traced to economics and is later connected to the fields strategy, SM as well as entrepreneurship and CE (Ireland & Webb, 2007; Hitt et al., 2001; Ireland, 2007; Ireland et al., 2003; Kuratko & Audretsch, 2009; Mintzberg, 1973). Nevertheless, SM, entrepreneurship as well as CE are the three mostly referred concepts (Ireland et al., 2009; Ireland, Hitt, Camp, & Sexton, 2001; Kyrgidou & Hughes, 2010). As these concepts impact the execution of SE, we will outline important linkages to understand how those can impact the execution of SE.
2.1.1 Ensuring Performance within Strategic Entrepreneurship
In general, companies depend on a strategic approach to allocate organizational resources in order to be able to secure the overall existence and establish a competitive advantage (Hitt et al., 2001). As the concept of SM aims to manage performance and efficiency from a strategic perspective, the roots to apply advantage-seeking can be traced back to SM. Further, SM impacts the overall decision making of an organization and determines the firm’s resource allocation from a strategic, advantage-seeking perspective (Gartner, 1985; Jones & Butler, 1992). Thus, SM guides how the fundamental resources within an organization are addressed. Even though SM and SE have the same causing factors, which can be traced back to the need of organizational flexibility due to dynamic changes in the business environment, their main focus differs (Rumelt, Schendel, & Teece, 1995). SM aims to determine renewal and growth of businesses by emphasizing on performance whereas SE aims to reach growth by the outlined combination of performance and entrepreneurial postures (Ireland et al., 2001; Kuratko &
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Audretsch, 2009). Thus, the components of SM help to ensure the overall implementation of a strategic approach that supports and secures the organizational operation. Due to this pivotal dimension, the importance to include the dimension of SM within SE is evident. Especially for SMEs this dimension is central to secure the overall performance and efficiency due to an already given resource scarceness (Ong et al., 2010). Hence, advantage-seeking actions, which aim to secure a company’s overall performance, are vital aspects of SM on which the concept of SE builds.
2.1.2 Ensuring the Creation of Newness within Strategic Entrepreneurship
On the other hand, the concept of entrepreneurship demonstrates the background for the second dimension, which is the entrepreneurial dimension of opportunity-seeking. The concept itself derives from the French word “entreprendre”, which means “to undertake” and emphasizes a proactive approach to utilize opportunities. Often linked to the individual dimension, the concept is decidedly characterized by the creation of something new (Schumpeter, 2002). As SE seeks out for the creation of newness, overlaps can be seen. Moreover, this component embeds the entrepreneurial dimension to utilize uncertain conditions to discover and exploit neglected opportunities within SE (Ireland & Webb, 2009; Knight, 1933). Thus, the entrepreneurial dimension of SE, to create new value is connected to opportunity-seeking behavior and derived from entrepreneurship and is embedded within SE (Ireland, 2007). Additionally, entrepreneurship embodies central components, which have also been useful for the long-term development of organizations (Ireland & Webb, 2007; Hitt et al., 2001). Hence, the concept of CE is of central relevance for our analysis as it manifests entrepreneurial principles within established organizations. CE has its roots in the 1970s, where Westfall (1969) highlighted the importance to include entrepreneurial dimensions within management practices of an established organization. The concept evolved from a strategy for entrepreneurship to an entrepreneurial strategy and from an individual to an organizational level (Westfall, 1969). Now in the 21st century, CE is seen as a way of reaching a high level of organizational performance within established organizations (Ireland, Kuratko, & Morris 2006; Morris 2011). Thus, CE aims to enhance a company’s existing field of competence by using organizational resources to create new resources and reacting to unexploited opportunities (Burgelman, 1984). Therefore, CE can be seen as a vision-directed, organization-wide reliance on entrepreneurial dimensions. In particular opportunity-seeking behavior, which purposefully and continuously rejuvenates
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the organization and shapes the scope of its operations through the recognition and exploitation of opportunities (Kuratko, 2007).
As CE builds upon opportunity-seeking behavior, a tendency towards taking risks, demonstrating autonomy and proactiveness, as well as innovativeness, can be identified. Evidence for this is given as Miller (1983) associates CE using risk-taking, innovativeness, proactiveness, competitive aggressiveness, and autonomy, to exploit opportunities. This is also valid for the concept of entrepreneurial orientation (EO), which influences CE (Danny, 1983; Miller, 1983). Lumpkin and Dess (1996) defined EO as a strategic dimension, which influences a firm’s entrepreneurial behavior and thus entrepreneurial outcomes. Due to the strategic decision-making influence nature, there is a dependency on the company’s EO and its performance (Kuratko et al., 2015; Zahra & Covin, 1995). The overlapping influence of EO as an intention giving construct for entrepreneurial strategies is also valid for SMEs. Various studies have demonstrated the positive effect of an EO within a corporate strategy towards SME growth and performance (Chittipeddi & Wallet, 1991; Bouchard & Basso, 2011).
CE can take two different forms in organizations, namely corporate venturing and strategic entrepreneurship. Corporate venturing describes adding new businesses or parts of new businesses to the firm, which can happen for example through equity investment (Kuratko & Audretsch, 2009; Rauch, Wiklund, Lumpkin, & Frese, 2009). SE, on the other hand, performs larger or high levels of innovation with an impact to reach a high level of competitive advantage (Morris, 2011). Hence, SE involves a field of entrepreneurial initiatives, which do not always result in new businesses added to the organization to reach competitive advantage (Kuratko & Audretsch, 2009). SE can occur in five forms: strategic renewal, sustained regeneration, domain redefinition, organizational rejuvenation, and business model reconstruction. They all involve the concept of innovations for pursuing a competitive advantage (Covin & Miles, 1999). For this study we focus on SE in general and not one form as we seek out to create a holistic understanding upon the concept.
Acknowledging the forms of CE, we can see that SE has been identified as one dimension of CE. However, SE differs from CE. The differentiation is that CE strives to use all available resources for entrepreneurial activities. Drawing the connections to our SME context, applying an opportunity-seeking focus is of importance for an SME’s long-term development. However, having restrained resources compared to larger organizations, SMEs are in need to manifest the
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strategic dimension to employ resources in a performance advancing way to secure their existence (Ong et al., 2010). Therefore, CE with its unilateral focus can be threatening for SMEs. Hence, SE embodies a more holistic approach with its two dimensions, whereas CE focuses stronger on the opportunity-seeking dimension (Ireland & Webb, 2007).
Based on the understanding of the overlapping concepts, we are able to identify two main concepts that impact SE. The advantage-seeking dimension manifests central performance-oriented components of SM, whereas the opportunity-seeking dimension manifests the entrepreneurial components of entrepreneurship and CE. In figure 2 we visualize our understanding of the rooted concepts of SE and their main influence on the concept. We now define SE as a dynamic process in which the central dimensions of those concepts are integrated and coexist. Thus, SE seeks to incorporate advantage-seeking and performance with an opportunity-seeking and newness creation dimension.
Figure 2: Adapted Model of Strategic Entrepreneurship (Based on Ireland et al., 2007)
2.1.3 Model of Strategic Entrepreneurship
In order to understand how the performance and entrepreneurial dimensions of SE can be manifested in the daily life of organizations, the model of SE in practice developed by Ireland et al. (2003) will be presented. The researchers build upon a process dimension and further
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define SE upon four dimensions. The outlined model of SE combines different research approaches on the topic of SE including human, firm, and social capital as well as the resource-based view.
Figure 3: Practice Model of Strategic Entrepreneurship (Based on Ireland et al., 2003)
According to the presented model (see Figure 3), SE is characterized by four key dimensions which lead to the establishment of competitive advantage and wealth creation. The first dimension of the entrepreneurial mindset herby is vital to engage successfully in SE as it is entailed in individuals in order to sense and act to uncertain circumstances. The dimension of an entrepreneurial mindset entails the key components recognition of opportunities, entrepreneurial alertness, real options logic and an entrepreneurial framework. The second dimension includes the organizational culture involving the organization’s values and beliefs and entrepreneurial leadership. Entrepreneurial leadership describes the influence of others in managing resources and inhabiting an advantage-seeking and opportunity-seeking approach. With the third dimension, managing the firm’s resources strategically, the basis for this approach is built. The aimed outcome of the three presented dimensions frame the base for applying the fourth dimension of creativity and development of innovation. By following the steps presented in the model, companies should be able to engage in advantage-seeking and opportunity-seeking behavior and reach the overall goal to enhance a firm’s efforts to create wealth (Ireland et al., 2003). Thus, the combination of entrepreneurial as well as strategic dimensions provide room for integrating both. Therefore, the overall process aims to reach a balance of entrepreneurial and strategic activities (Ireland et al., 2003).
However, this model has been criticized by Kyrgidou and Hughes (2010) as they acknowledge several limitations. One limitation can be seen that the first model lacks a holistic perspective due to the linear process nature the model applies. Even though following the process presented in figure 3, aspects of SM and entrepreneurship are combined. However, the model does not
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include an evaluation process between the two linked concepts. Therefore, the model does not provide room for a continuous organizational learning approach. However, this is of central importance in order to be able to critically reflect upon the resource allocation and to analyze the divergence and efficiency of both components. Moreover, the time dimension on how to manage the two dimensions timewise is not clearly outlined. Currently, the model starts with emphasizing the entrepreneurial dimension in the beginning and then drawing back to the strategic perspective when allocating resources and lastly returning to the entrepreneurial one when considering creativity and innovation (Kyrgidou & Hughes, 2010). Hence, practical insights on how to manage both dimensions at the same time are not outlined.
2.1.2 Key Components of Strategic Entrepreneurship
Now being aware of the limitations of the model, we take one step back from the model and examine the key components of SE. As the first model has a linear process nature and is not linked to the SME context, we first identify the central components found to manifest SE. This in turn aids our research approach to establish a linkage of SE and the SME context. The researchers Kyrgidou & Hughes (2010) did not only criticize the model of Ireland et. al (2003), but also examined eight components, which they identified as being important for engaging with SE. The eight components are presented in figure 4 and will be outlined in the following.
Figure 4: Key Components of Strategic Entrepreneurship (Based on Kyrgidou and Hughes, 2010)
The eight components of opportunity identification, innovation, acceptance of risk, flexibility, vision and growth, resource management and dynamic capabilities (see Figure 4), were found to manifest the key dimensions of SE (Kyrgidou & Hughes, 2010). From those, we have identified and grouped the components in relation to the two dimensions of SE (performance &
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entrepreneurial). While doing this, we found the dimensions opportunity identification, innovation, and acceptance of risk illustrating the entrepreneurial dimension within SE (see the green boxes). On the other hand, the components vision, flexibility, and growth tend to emphasize a stronger performance-oriented focus within SE (see the blue boxes).
Starting with the performance dimension it is important to have a strategic vision, which acknowledges the mutual behavioral focus within SE. This vision is of central importance as it embodies the focus to manage advantage-seeking and opportunity-seeking behavior within firms (Ireland & Webb, 2009). However, the key focus is more strategic as the performance dimension must be secured by the vision to secure the company’s performance. Besides this, strategic importance is given to have flexible organizational structures in place. This enhances the company’s ability to adapt to changes in general. For this dimension, the focus lays on efficiency to maintain the performance dimension, even though flexibility is also part of the entrepreneurial dimension. Despite this, we identify the growth dimension as a strategic component as it relates to the overall performance focus a company manifests to secure its existence (Ireland et al., 2001). However, an additional source of growth, besides investing resources towards advantage-seeking behavior, can be seen in allocating resources in the creative newness creation (Kyrgidou & Hughes, 2010). Thus, the growth component embodies a mix of performance and entrepreneurial dimension. Despite this, we identify the three dimensions vision, flexibility, and growth towards the performance dimension of SE as they serve a strategic, performance-oriented objective.
After having outlined the first three components with a strategic orientation, entrepreneurial dimensions follow. Opportunity identification is a pivotal component of entrepreneurship as resources are used to detect unexploited opportunities. Further, this dimension can be linked to the above-outlined component of entrepreneurship to create newness by using opportunities identified (Bird, 1989). Additionally, innovation is another component of entrepreneurship aiming to enhance the opportunity-seeking behavior within SE (Ireland & Webb, 2007; Hitt et al., 2001). Besides this, the ability to accept and be willing to take risks is the last key component found by Kyrgidou & Hughes (2010) with entrepreneurial roots.
Having outlined the entrepreneurial components, connections to the EO concept can be drawn. The dimensions of risk and innovation are vital components of both concepts (Ireland et al., 2001; Lumpkin & Dess, 1996). Moreover, the proactive dimension of EO can be linked to the
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opportunity identification dimension of SE (George, 2011; Kyrgidou & Hughes, 2010). Thus, the EO influence with three main components can be recognized to be integrated within SE. Besides the six outlined components which are organized in the middle of the model, Kyrgidou and Hughes (2010) incorporate two additional components and placed them around the outlined components (see figure 4). The nature of this model shows that each of the six components, which are centered in the middle, are influenced by the following two components. The first component of resource management refers to the process of how resources are managed along the six main components to reach the overall goal of SE in order to create value and establish a competitive advantage. Dynamic capabilities as the second component indicate the systematic approach of organizational learning. Incorporating this component, the organization aims to function as a system itself. A focus is devoted to knowledge-seeking, helping to improve organizational activities. For this reason, dynamic capabilities assist to manifest a balanced resource allocation. The organization seizes and transforms knowledge into improvements and thus increases the success for competitive advantage (Kyrgidou & Hughes, 2010).
Overall, the eight components illustrate central elements of SE. We did not only find overlaps of SM and entrepreneurship dimensions, but also found those eight components anchoring the roots of SE. Moreover, the components help practitioners to easily identify the key components of SE from a resource-based perspective. Compared to the first model the eight components are less complex and need less knowledge prior to engaging but still cover the central aspects important for SE. Additionally, the researchers argue that engaging in SE does not necessarily mean the six main components are executed to its fullest extent at the same time. Even though SE depends on each component, as those establish and manifest the execution of SE, the degree of how much each component is utilized depends on a firm’s resource capacity. Thus, this perspective on SE in practice provides flexibility to allocate resources. The use of all components together entails the establishment of SE establishing a competitive advantage by demonstrating actions towards the performance as well as the entrepreneurial dimension (Kyrgidou & Hughes, 2010). Therefore, figure 4 can be seen to function as an overview of central components that shall be executed when engaging in SE.
However, it is important to acknowledge that the eight components depend on how the practitioners, mostly top managers, deploy actions in each of them (Kyrgidou & Hughes, 2010). Further, the successful execution of the above-mentioned model depends on various dimensions. For example, the entrepreneurial environment, such as the entrepreneurial culture
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and the entrepreneurial managing style. Often these are influenced by managers. The engagement is also dependent on the organizational structure and overall strategic direction (Ireland et al., 2003).
2.2 Top Managers in Strategic Entrepreneurship
Due to the two dimensions SE incorporates, we draw on findings of top managers’ influence on the performance as well as the entrepreneurial dimension. This helps us to establish an overall understanding on what actions literature associates top managers to execute in each of the two dimensions. When researching the current state of literature regarding managerial influence within SE, we found again a strong overlap of CE findings (Burgelman, 1983; Ireland, Covin, & Kuratko, 2009; Ireland & Webb, 2009; Kuratko et al., 2015). As we have drawn the linkages of SE and CE at the beginning of this part, we can consider findings which CE literature reveals about top managers’ influence within our analysis. Moreover, due to the relatively young establishment of SE, the use of CE literature becomes relevant. The definition of top managers applied in our study is not bound to one sex. Thus, we refer to female, male as well as gender-neutral individuals, who function in the top management level of SMEs. 2.2.1 Performance Dimension
Acknowledging the roots of SE, we can draw parallels of top managers’ influence factors within SM and SE. To ensure the performance-oriented part of SE, top managers’ influence on the companies structural and organizational scope becomes of importance. In order to maintain performance, top managers can be identified as being responsible for providing a strategic vision, structure, context and managerial support for the sum of organizational activities (Morris, 2011). This is closely related to the managers’ decision on how to allocate organizational resources in an efficient and profit-generating way (Barney, 1991; Burgelman, 1984; Rumelt, 1995). Literature categorizes individuals, who function in this performance-oriented role as a top manager as a strategist, organizer, planner, controller, and director. Thus, by applying managerial power and control, top managers address a company’s long-term performance (Morris, 2011; Rumelt, 1995). This dimension is of central importance to secure a company’s long-term survival (Barney, 1991). Hence, is vital for SME top managers to ensure and maintain performance regardless of different engagements. Top managers have the responsibility to use their knowledge, their role and power in order to ensure that the organization is making profit. Thereby, tasks to ensure an advantage-seeking resource allocation are followed by actions lined to communicate with his employees and various
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stakeholders, while at the same time controlling and planning further mechanisms to ensure performance (Rumelt, 1995). The outlined responsibilities to provide a strategic vision and allocate resources in a strategic, growth-oriented dimension can be recognized in the above outlined three strategic SE components vision, growth and flexibility.
2.2.2 Entrepreneurial Dimension
Due to the mutual sided concept of SE, the necessity is given to incorporate not only the strategic oriented influence but also expand the managerial scope towards the entrepreneurial dimensions (Ireland et al., 2009; Kuratko, 2007). Even though the necessity is given to focus on administrative management tasks in order to prevent losses and coordinate activities, SE also demands to incorporate an entrepreneurial, opportunity-seeking management style. Thus, engaging with SE widens the managerial scope of top managers. Top managers are identified with multiple roles rather than being a general resource coordinator and director. Moreover, literature recommends them to anchor resources to ensure the organizational commitment towards entrepreneurial activities. This should be done early on and in a consistent manner (Burgelman, 1984; Kuratko et al., 2005). In order to manifest entrepreneurial actions within the organization, top managers were found to have the responsibility to supervise, plan, develop, and support the organizational structure. While middle managers have the role to function as change agents, top managers are accountable for determining rules, meaning the structural as well as strategic context (Burgelman, 1984). Hence, top managers are in charge to encourage and manage entrepreneurial activities within the organization instead of controlling each entrepreneurial idea (Burgelman, 1983). Further, top managers were found to have an integral function to anchor SE within the organization by establishing and anchoring the entrepreneurial vision (Kuratko et al., 2005). Especially providing commitment towards as well as the manifestation of an entrepreneurial vision is important to be employed by top managers. Moreover, the vision was found to positively impact the employees’ entrepreneurial cognitions and understanding, willingness as well as execution of entrepreneurial behavior (Ireland & Webb, 2009). Additionally, demonstrating managerial flexibility, a high level of communication and commitment as well as the ability to provide support with managerial guidelines are behaviors discussed by literature to enhance SE from a top managers perspective (Burgelman, 1983). Notably, the dynamic concept of SE is not only dependent on top managers. Instead, the creation of a competitive advantage is reached with all levels of the organization. Therefore, the execution of SE depends on each organizational member. Now, being aware of the integral role top managers execute within SE, the responsibility to openly engage with all
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levels of the company becomes visible (Ireland & Webb, 2009). Hence, providing room for strategic changes, feedback as well as organizational learnings are important tasks of top managers. Especially, as those have a proven significant influence towards applying opportunity-seeking behavior (Burgelman, 1983).
Ultimately, top managers engaging in SE can be identified to act as managers who “set the strategic direction and empower and enable others as part of their recognizing role” (Kuratko et al., 2005, p. 278). Thus, top managers shall aim to act as strategic analyzers but also as entrepreneurs to establish the strategic context for innovation, while encouraging employees to develop and nurture their own EO (Burgelman, 1984). These outlined findings are linked to the concept of a corporate entrepreneur. A corporate entrepreneur is identified to institutionalize the corporate vision as well as managing employees’ fellowship towards the entrepreneurial program. In order to unleash the potential of SE, the corporate entrepreneur fosters the process by applying entrepreneurial behavior (Pearce, Kramer, & Robbins, 1997). Additionally, Burgers and Van de Vrande (2016) examined a strong opportunity-seeking and exploiting focus embodied by the corporate entrepreneur (Burgers & Van de Vrande, 2016). Thereby, engaging with SE as a top manager does not only incorporate two different conceptual dimensions, but also the responsibility to anchor an EO within the company. Hence, the EO dimension is of importance within the opportunity-seeking dimension of SE to foster opportunity-seeking behavior of organizational members.
2.2.3 Top Manager’s Entrepreneurial Orientation
Acknowledging the nature of entrepreneurship as an opportunity-seeking field, SE embodies a strong focus to employ a motivation towards the creation and implementation of opportunities from a top manager’s perspective. Therefore, taking calculated risks, being able to use resources creatively, and have an ability to untangle complex situations with an opportunity lens, are pivotal top managerial behaviors found by literature (Kuratko, 2007). This can be traced to the EO construct (Lumpkin & Dess, 1996). Thus, a top manager, who’s behavior is associated with moderate risk and a proactive approach towards exploiting opportunities can be beneficial for SMEs engaging in SE. Connecting to the findings of Bouchard and Basso (2011), who link the concept of EO with entrepreneurial activities within an SME, acknowledge that managers influence the development of entrepreneurial activities. Being aware of this, the important role of a top manager, who himself is highly innovative, risk-taking and proactive is given for SMEs to unleash entrepreneurial potential. Being aware of the strong owner influence in SMEs on
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vision and strategy, the top manager might not be able to utilize entrepreneurial activities as the owner’s influence is limiting the managers’ entrepreneurial scope to be innovative and stifle uncreative procedures. An SMEs owner influence should not be underestimated as the owner influence can impact the overall change resistance of SMEs (Bouchard & Basso, 2011). Engaging successfully in SE has been identified to be connected to several managerial functions. Literature did not only demonstrate a linkage of strategic concepts (see Figure 2), but also an overlap of managerial tasks and behavioral roles. This results in complex and multidimensional tasks to be executed by top managers in SE.
To address the performance dimension a top manager is entitled to provide administrative managerial tasks, for example ensuring strategic direction, structure, and managerial support. The literature of CE and SE literature shows a second area of managerial components which shall be addressed by top managers with a stronger opportunity lens manifested by top managers. Further, having found that EO influences not only SE as a concept but also the managerial approach applied to this concept, we include the dimension as an entrepreneurial component for our analysis. In figure 5 we present our findings based on our literature review. Hence, the model outlines top managers’ influence on the two dimensions of SE.
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Furthermore, combining the individual and the organizational level, the manager has a proven reciprocal influence on the environment for entrepreneurship within an organization. Therefore, it is important to be aware that the behavior applied, depends on the structural context the individual is operating in (Shepherd, Patzelt, & Haynie, 2010).
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3 Research Method
__________________________________________________________________________________________ In the following part we present and discuss our adopted research philosophy with the chosen relativist ontology and social constructionist epistemology. We elaborate on the related qualitative research approach of our study and the exploratory methodology. The chapter presents the applied method for data collection with in-depth-interviews and our purposive sampling followed by the adopted content analysis. In order to create trustworthiness, the conditions of research quality and ethics are examined.
___________________________________________________________________________ 3.1 Research Methodology
Within this part of the study we examine the chosen approaches and choices that were made in terms of research philosophy, research approach and research strategy.
3.1.1 Research Philosophy
In order to examine and present a consistent research methodology, we first elaborate on the philosophical assumptions which were made during the study. A well-established research philosophy gives a basis for the chosen methodology, the research strategy as well as data collection and the way of analysis. Developing a coherent research philosophy requires to reflect on the personal perceived philosophical position of us as researchers and the way of the performed research (Saunders, 2016).
As previously mentioned, the purpose of our study is to gain an understanding on how top managers are managing the dimensions of SE in SMEs. Therefore, we will focus our research on the reality of the human and knowledge perspective. The interviewed top managers and additional two consultants, who are part of the study as well as us as researchers, will be treated and perceived as human individuals engaging in social interactions (Easterby-Smith, 2015). Following our position as being an integral part of the research process we reflect on how the real world is, including the SME and the external environment, and the individual as the generator of knowledge for our study (Marshall, 1996). Therefore, we examine the engagement of top managers in an SME context and base our assumptions on the nature of reality referring to the ontological position of relativism (Saunders, 2016). Relativism helps by declaring that not a sole truth or reality exists or can be discovered. However, different perceptions and opinions can be examined depending on the point of view (Easterby-Smith, 2015). In regard to
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our context, where we focus on top managers in different SMEs, we are confronted with executives operating in different business units or industries and the importance of an ontological position of relativism becomes evident. Consequently, we will experience different perspectives and forms of SE engagement.
In regard of the epistemology, we choose the social constructionism, which relates to our ontological position. Social constructionism supports the understanding of the social world. This approach of the epistemology is concerned with different interpretations of how people make sense of the world and the resulting constructed reality (Bryman, 2015; Easterby-Smith, 2015; Saunders, 2016). Realities are created through the interaction of people among one and another and the environment. Therefore, social actors, meaning top managers in our research, are continuously creating meaning. However, social aspects and categories are not only produced through social interaction but are constantly revised (Bryman, 2015). This results in the assumption that the findings throughout the study are socially constructed through the insights of our interviewed top managers and our interactions as researchers. The ontological position corresponds with our research purpose examining different top managers collecting shared meanings and realities. Following a social constructionist epistemology, we pursue the target to gather and analyze data which represents different experiences and viewpoints on the application of SE by top managers in SMEs. Being an active part of the observation process, we pursue to gather enriching data in order to make a valuable theoretical contribution and give practical recommendations (Easterby-Smith, 2015).
3.1.2 Research Approach
The social constructionist position we chose for our epistemology is closely linked to conducting qualitative research, which helps us to explore complex human issues. This relates to our research question on how top managers engage in SE in SMEs. A qualitative research gives the opportunity to conduct a more flexible research with an open-ended research strategy (Bell & Bryman, 2007; Marshall, 1996). Nevertheless, qualitative inquiries provide us with a difficult access to data which poses us the challenge to present transparency on how we conducted the study (Easterby-Smith, 2015). In addition to that qualitative studies are of an iterative nature, constituting a steady back and forth going during the conduct of the study (Bryman, 2015). In order to address this concern, we follow a qualitative research, focusing on data collection with open-ended questions and make use of the exploratory nature of this approach reaching a more integral position (Easterby-Smith, 2015). An open-ended style gives
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the possibility to explore a novel approach of investigation during the research process (Bell & Bryman, 2007).
Besides the posed challenges, qualitative studies help to gather valuable findings derived from data (Easterby-Smith, 2015). Hereby, an inductive approach helps us to understand and explore the collected data which makes it possible for the researcher to make generalizable assertions on top managers’ engagement in SE or let theory derive from collected data (Saunders, 2016). Therefore, we can relate to our previously examined literature review, compared to the deductive approach where theory is tested during the data collection process (Bell & Bryman, 2007; Saunders, 2016). Furthermore an inductive approach is closely linked with a qualitative research approach and fits with our research philosophy but also our research purpose (Bell & Bryman, 2007). The emergence of knowledge from human data, as from our sampled top managers, fits to the chosen social constructionist perspective. Additionally, choosing induction for our research approach helps us to refine our research design but also to make a proper choice of the research strategy.
3.1.3 Research Strategy
The research strategy as part of our research design is closely linked to the research questions and helps us on how to answer them throughout our study. But compared to the research strategy, the research design includes far more aspects. It specifies the selection of sources, ethical constraints and objectives to follow along the research. The research strategy instead can be seen as the methodological link between the chosen research philosophy and the chosen methods which helps to answer the research question (Saunders, 2016).
Composing our premises on our determined research purpose and research question, an exploratory purpose for the study is suitable according to literature. An exploratory study helps us to gain insights in a flexible manner as it is adaptable to change (Saunders, 2016). This fits with our research topic where more investigation on top managers’ engagement and the managing function in a strategic context within SMEs is needed. As a result, we can adjust the performance of the study accordingly. During the research process the approach can give valuable data and new insights in the research area.
As defined by literature, the data collection process within an exploratory purpose should focus on the collection of qualitative data in order to stretch the field of research and gather a wide
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range of findings relating to the SME context (Bryman, 2015). Further, we conduct qualitative interviews that follow an exploratory purpose (Saunders, 2016). By conducting qualitative interviews, we try to understand the perspective of the top manager and why a certain position or engagement is relevant (Easterby-Smith, 2015). Summarizing, for our research strategy we take on a social constructionist position performing a qualitative exploratory interview study. 3.2 Methods
The upcoming part shows the chosen research methods we followed during the study. This part covers the chosen data sources and the adopted sampling strategy. Further, the significance of the chosen semi-structured interviews will be demonstrated, followed by our detailed data collection process.
In order to gain new insights and credible underline our research outcome of the engagement and functions undertaken by top managers, we chose to collect primary data. The collection of primary data takes place by the researchers and consequently supports data collection for answering the posed research questions (Easterby-Smith, 2015; Saunders, 2016). Therefore, our collected data is a genuine data because it has been collected at first-hand. Thus, it was not modified by any other party. In turn this entails that the process of the data collection needs to be controlled which we discuss in our ethical considerations. Nevertheless, the process of collecting primary data can be time consuming and costly compared to the collection of secondary data (Easterby-Smith, 2015).
A conventional way in collecting primary data is the conduction of qualitative interview (Easterby-Smith, 2015). As mentioned in our research strategy we will make use of qualitative interviews. Our intention is to gather meaningful data in order to draw conclusions about the role and the managing function of top managers and on how the SME context impacts their role (Saunders, 2016). We will also make use of secondary data (see Appendix 1) which can be retrieved from the company’s websites, LinkedIn profiles or valuation online data bases which allows us to triangulate data (Given, 2008; Saunders, 2016).
3.2.1 Sampling Strategy
As we already defined to collect qualitative data on the basis of interviews, we declare our sampling strategy in order to determine suitable interview candidates for our sampling.
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For the sampling design we follow a non-probabilistic sampling strategy according to our imposed research questions. Choosing a non-probabilistic sampling design means that we cannot specify the probability of the interviewees in our sample. It is therefore harder to make generalizations about the sample and apply it to a large group where the sample has been taken from (Easterby-Smith, 2015). Instead of choosing a random sample, non-probability sampling makes use of subjective methods in order to decide which elements are included in the sample and which are not (Battaglia, 2008).
Within non-probabilistic sampling different designs exist. For our study we decided on following a purposive sampling. Considering our research purpose, the sample units become evident as well as the potential top managers for our sample. The aim of purposive sampling is to create a sample which can represent the “population” (Battaglia, 2008). In our study we consider top managers in an SME context. The sampling strategy shows clearly the difference between qualitative and quantitative studies. Qualitative studies follow a more in-depth approach, focusing on a small sample compared to quantitative studies which examine a larger random sample. With our purposive sampling we strive to collect enriching in-depth data in order to fulfill the purpose of our study instead of empirical generalization. Therefore, we choose a small number of selected in-depth interviews which are associated with qualitative interview to follow our research purpose and answer our research questions (Patton, 2002). But following a purposive sampling also entails some limitations. Battaglia (2008) states that another expert would choose a different sample and consequently consider different characteristics and factors as vital. Hence results can be limited on the defined sample and not be applicable for the rest of the population (Battaglia, 2008). In order to resolve the limitation we will apply an iterative strategy which implies moving back and forth between theory and data (Easterby-Smith, 2015; Saunders, 2016).
After defining our purposive sampling strategy, we are selecting potential candidates for our interview from different companies which could fit with our research purpose and help to answer the defined research questions. Therefore, we make assumptions on previous experiences and knowledge, appropriate to our study context.
In order to choose suitable interview candidates for the study we determine criteria for potential persons to complement the sampling (see Table 1). We decide on persons in high-level
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management positions as for example board members or executives in the examined organizations. Further, the interview candidate should operate in the top management level. The interviewed person should be involved in determining the strategic corporate goals or fill high-level leadership positions. Overall, the top manager should engage in implementing, coordinating or controlling of the overall planning. Herby we ensure that the interviewed person possess knowledge related to our research purpose and is involved in entrepreneurial initiatives as well as strategic decision making. We believe that it is valuable to conduct interviews in different business areas because of the strategic importance throughout the whole business sector.
We would also like to mention that our first intention was to make use of triangulation by taking into account not only the top manager perspective but also the subordinates perspective (Given, 2008). Due to the Coronavirus disease 2019 (COVID-19) the contact with suitable subordinate candidates was limited as well as the afforded time of the counterparty. Nevertheless, in order to make use of triangulation we interviewed two additional consultants which operate with SMEs to consider different perspectives in our sample.
Criteria for Interviewee
Position Board member, executive
Hierarchy level Top management level
Role Determination of strategic corporate goals,
allocation of high-level leadership positions, Implementation, coordination and control in accordance with overall planning
Table 1: Criteria for Interview Candidate
In accordance with the details provided by the European commission we define the criteria for the chosen company as seen in table 2 (European Commission, 2020). The turnover of the selected company should be at least 2 million € per year but should not exceed 50 million € turnover per year. The same accounts for the balance sum which should be at least 2 million € but should not exceed 43 million € per year. We further follow the definition concerning the number of employees according to the European commission. The number of employees in the organization should be at least 10 but should not exceed a number of 250 employees. In addition to that the company should be in business for at least three years.
25 Criteria for Company
Turnover 2 Mio. € - 50 Mio € p.a.
Balance sum 2 Mio. € - 43 Mio € p.a.
Number of Employees 10 - 250
Age of Company Minimum 3 years in business
Table 2: SME Definition of European Commission
Concerning our research strategy, we also want to make remarks referring the selection of our interview partners. According to previous experiences and our individual networks we requested interview partners coming from this context. Due to COVID-19 resulting in consequent spatial separation and time constraints we focused on interview partners from European countries. This choice might seem to resemble the convenience sample in some aspects as the environmental circumstances impact the interview partner selection (Bryman, 2015; Saunders, 2016).
3.2.2 Semi-structured interview
Regarding the performance of our interviews we decided on making use of semi-structured interviews. Characteristically, an interview guide with predefined questions and subjects of interest underlies semi-structured interviews (Easterby-Smith, 2015; Harrell, 2009). With the conduction of semi-structured interviews, we aim to pose target-oriented questions and gather new insights on the managing role of top managers in an SME setting considering advantage-seeking and opportunity-advantage-seeking. The nature of the interview guide provides the interviewer with a structured order of which questions can be asked and ensures to cover relevant topics for answering our research questions. However, we as researchers have the flexible possibility to ask additional questions following an issue of the topic which did not satisfy us as researchers or where we wanted to elaborate more on (Harrell, 2009; Saunders, 2016). Compared to unstructured interviews, where the researcher only possesses a list of topics, semi-structured interviews provide a guideline on which the interviewer can grasp on. On the other hand the form of semi-structured interviews leaves the possibility to the interviewee to answer questions more flexible and not being restricted with prescribed choices (Bryman, 2015; Easterby-Smith, 2015).
Qualitative interviewing is typically associated with semi-structured interviews. After examining current literature, we gained knowledge on our SE topic and imposed a clear
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research focus and purpose. Hence, conducting semi-structured interviews gives us the possibility to ask questions covering our research purpose (Bryman, 2015). We strive to gather valuable data throughout the purposeful conversation which deliver us a foundation for the analysis and detections in regard to our research questions. Asking “Why” and “How” questions follows our open-ended structure and gives the interview candidate the possibility to elaborate on previous experiences and expert knowledge (Saunders, 2016). In the Appendix (see Appendix 3) the proposed interview guides can be found. In order to triangulate between different perspectives, we created an additional interview guide (see Appendix 4) for the consultants which relates to their perspectives on SMEs and top managers.
3.2.3 Interview Construction
In order to collect informative data, we carried out 10 semi-structured interviews (see Table 3) in different industry sectors ranging from business to business (B2B) to business to customer (B2C) approaches. The interview candidates hold positions in the top management, including executives and chief executive officers. In addition to that we conducted two interviews with consultants (see Table 4) which operate particularly in the SME context. For choosing suitable interviewees, we applied a two-step approach. To begin, we contacted potential persons via e-mail and scheduled a date for the conduction. In total we conducted seven interviews with German candidates, three from Sweden, one from France and one from Denmark. Five of the seven interviews with candidates from Germany were conducted in German. For the ease of the analyzing procedure we translated the relevant parts from the transcript into English. Therefore, we would like to confirm that we translated the relevant parts as good as possible from German into English but also would like to mention that we cannot preclude mistakes as we are not professional translators. Due to the spread of COVID-19 all interviews were conducted via phone (8 via phone) or Skype (4 via Skype) to ensure the health of the participant and researchers. For the data analysis we agreed with the interview candidate up on recording the interview beforehand and prepared a transcript of every single interview after the conduction (Bryman, 2015; Saunders, 2016). The interview lasted between 25 and 100 minutes. This time was needed to give the respondent enough time to answer questions and reflect on it. Further, we as researchers has enough time to cover the topics from our prepared interview guide.
