The critical resources of rural SMEs

Margit Närvä, Leena Maija Rantamäki-Lahtinen, Matti Juhani Ryhänen

Tutkimustuotos: KonferenssimateriaalitPosteriTutkimusvertaisarvioitu

Kuvaus

SMEs are important in rural areas. In Finland 99,1 % of all companies are small (less than 50 employees). In this presentation is investigated rural firms. In rural areas is three kind of firms: conventional farms, diversified farms (farming and other business activities) and non-farm businesses. In this presentation is investigated diversified farms and non-farm businesses (later those are called rural SMEs). The objectives of the research are 1) to investigate the resources of rural SMEs 2) to describe the critical resources of rural SMEs.
Resources is classified in many ways (Valentin 2001), e.g. tangible and intangible resources (Ray et al. 2003), critical resources and basic capabilities (Rangone 1999). There is a common understanding among researchers that the focus should be on valuable, or critical, resources and capabilities that have a significant positive effect on costs or perceived benefits (Peteraf and Barney 2003). Resource-based approach is especially interested in those resources that produce permanent competitive advantage (Rangone 1999). There is interest to recognize and assess which resources are important from the point of view of the success. One common analysis is VRIO-analysis (Barney 1997). In this analysis is assessed, how valuable, rare, inimitable, and organized the resource is. Resource based theory is used more in the context of large firms, but it is also used in small firms (e.g. Rangone 1999, Forsman 2004). In this study critical resources are investigated from the small business management perspective.
Data were collected by postal surveys 2006 (N = 600) and 2012 (N = 580). In both years, data originally had two subsets: diversified farms (i.e. firms that have both non-farm entrepreneurial activities and agriculture) and non-farm rural small businesses. Data were analyzed by using quantitative methods: cluster analysis (k-means method), Kruskall-Wallis non-parametric test, χ2 – test, correspondence analysis and Spearman correlation.
Two critical resources that are applicable for firms regardless their industry were defined: entrepreneurial orientation and business skills of the owner. Enterprises were divided into groups by two using these variables: (1) the entrepreneur's estimate of his/ her own business skills in relation to competitors; and (2) the entrepreneur's estimate of his/her ability to identify and realize opportunities in relation to competitors. The grouping was made by using k-means cluster analysis the solutions of Groups 2 to 6 The most obvious interpretation is the solution in Group 6, which formed a group of resources for "excellent", "good". “opportunity recognizers”, “intermediate” “average” and “poor*skills. According to results management and opportunity exploitation skills may have influence on the success of the rural enterprises. Thus, entrepreneur’s skills enable the creation of the competitive advantage and success of the firm can therefore be critical resources of the rural firm. According to the results, diversified farms and non-farm rural businesses were quite similar from this perspective.

According to the results, those entrepreneurs that have good or excellent management and opportunity also had better other resources, such as technology, customer relationships, and vocational skills, available than the others. On the other hand, many of those entrepreneurs who evaluated that their management and opportunity exploitation skills were weak felt that they did not have enough capital and/or know-how. It can be concluded that it is important to support entrepreneurs’ management skills by education, consultancy, and other activities. Entrepreneurial orientation is more challenging to support by outsiders. Perhaps entrepreneurship education in schools, idea generation, and support the resilience of youngsters could provide support in the long run.
Alkuperäiskielienglanti
Sivut1
TilaJulkaistu - 15 marraskuuta 2018
OKM-julkaisutyyppiEi sovellu
TapahtumaRENT XXXII Research in Entrepreneurship and Small Business Conference 2018: Sustainable entrepreneurship: A win-win strategy for the future - Palacio de Congresos , Toledo, Espanja
Kesto: 15 marraskuuta 201816 marraskuuta 2018
Konferenssinumero: XXXII
http://www.rent-research.org/rent-xxxii

Konferenssi

KonferenssiRENT XXXII Research in Entrepreneurship and Small Business Conference 2018
LyhennettäRENT
MaaEspanja
KaupunkiToledo
Ajanjakso15/11/201816/11/2018
www-osoite

Tieteenalat

  • 415 Muut maataloustieteet

Lainaa tätä

Närvä, M., Rantamäki-Lahtinen, L. M., & Ryhänen, M. J. (2018). The critical resources of rural SMEs. 1. Posterin esittämispaikka: RENT XXXII Research in Entrepreneurship and Small Business Conference 2018, Toledo, Espanja.
Närvä, Margit ; Rantamäki-Lahtinen, Leena Maija ; Ryhänen, Matti Juhani. / The critical resources of rural SMEs. Posterin esittämispaikka: RENT XXXII Research in Entrepreneurship and Small Business Conference 2018, Toledo, Espanja.
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Närvä, M, Rantamäki-Lahtinen, LM & Ryhänen, MJ 2018, 'The critical resources of rural SMEs' RENT XXXII Research in Entrepreneurship and Small Business Conference 2018, Toledo, Espanja, 15/11/2018 - 16/11/2018, Sivut 1.

The critical resources of rural SMEs. / Närvä, Margit; Rantamäki-Lahtinen, Leena Maija; Ryhänen, Matti Juhani.

2018. 1 Posterin esittämispaikka: RENT XXXII Research in Entrepreneurship and Small Business Conference 2018, Toledo, Espanja.

Tutkimustuotos: KonferenssimateriaalitPosteriTutkimusvertaisarvioitu

TY - CONF

T1 - The critical resources of rural SMEs

AU - Närvä, Margit

AU - Rantamäki-Lahtinen, Leena Maija

AU - Ryhänen, Matti Juhani

PY - 2018/11/15

Y1 - 2018/11/15

N2 - SMEs are important in rural areas. In Finland 99,1 % of all companies are small (less than 50 employees). In this presentation is investigated rural firms. In rural areas is three kind of firms: conventional farms, diversified farms (farming and other business activities) and non-farm businesses. In this presentation is investigated diversified farms and non-farm businesses (later those are called rural SMEs). The objectives of the research are 1) to investigate the resources of rural SMEs 2) to describe the critical resources of rural SMEs. Resources is classified in many ways (Valentin 2001), e.g. tangible and intangible resources (Ray et al. 2003), critical resources and basic capabilities (Rangone 1999). There is a common understanding among researchers that the focus should be on valuable, or critical, resources and capabilities that have a significant positive effect on costs or perceived benefits (Peteraf and Barney 2003). Resource-based approach is especially interested in those resources that produce permanent competitive advantage (Rangone 1999). There is interest to recognize and assess which resources are important from the point of view of the success. One common analysis is VRIO-analysis (Barney 1997). In this analysis is assessed, how valuable, rare, inimitable, and organized the resource is. Resource based theory is used more in the context of large firms, but it is also used in small firms (e.g. Rangone 1999, Forsman 2004). In this study critical resources are investigated from the small business management perspective.Data were collected by postal surveys 2006 (N = 600) and 2012 (N = 580). In both years, data originally had two subsets: diversified farms (i.e. firms that have both non-farm entrepreneurial activities and agriculture) and non-farm rural small businesses. Data were analyzed by using quantitative methods: cluster analysis (k-means method), Kruskall-Wallis non-parametric test, χ2 – test, correspondence analysis and Spearman correlation.Two critical resources that are applicable for firms regardless their industry were defined: entrepreneurial orientation and business skills of the owner. Enterprises were divided into groups by two using these variables: (1) the entrepreneur's estimate of his/ her own business skills in relation to competitors; and (2) the entrepreneur's estimate of his/her ability to identify and realize opportunities in relation to competitors. The grouping was made by using k-means cluster analysis the solutions of Groups 2 to 6 The most obvious interpretation is the solution in Group 6, which formed a group of resources for "excellent", "good". “opportunity recognizers”, “intermediate” “average” and “poor*skills. According to results management and opportunity exploitation skills may have influence on the success of the rural enterprises. Thus, entrepreneur’s skills enable the creation of the competitive advantage and success of the firm can therefore be critical resources of the rural firm. According to the results, diversified farms and non-farm rural businesses were quite similar from this perspective.According to the results, those entrepreneurs that have good or excellent management and opportunity also had better other resources, such as technology, customer relationships, and vocational skills, available than the others. On the other hand, many of those entrepreneurs who evaluated that their management and opportunity exploitation skills were weak felt that they did not have enough capital and/or know-how. It can be concluded that it is important to support entrepreneurs’ management skills by education, consultancy, and other activities. Entrepreneurial orientation is more challenging to support by outsiders. Perhaps entrepreneurship education in schools, idea generation, and support the resilience of youngsters could provide support in the long run.

AB - SMEs are important in rural areas. In Finland 99,1 % of all companies are small (less than 50 employees). In this presentation is investigated rural firms. In rural areas is three kind of firms: conventional farms, diversified farms (farming and other business activities) and non-farm businesses. In this presentation is investigated diversified farms and non-farm businesses (later those are called rural SMEs). The objectives of the research are 1) to investigate the resources of rural SMEs 2) to describe the critical resources of rural SMEs. Resources is classified in many ways (Valentin 2001), e.g. tangible and intangible resources (Ray et al. 2003), critical resources and basic capabilities (Rangone 1999). There is a common understanding among researchers that the focus should be on valuable, or critical, resources and capabilities that have a significant positive effect on costs or perceived benefits (Peteraf and Barney 2003). Resource-based approach is especially interested in those resources that produce permanent competitive advantage (Rangone 1999). There is interest to recognize and assess which resources are important from the point of view of the success. One common analysis is VRIO-analysis (Barney 1997). In this analysis is assessed, how valuable, rare, inimitable, and organized the resource is. Resource based theory is used more in the context of large firms, but it is also used in small firms (e.g. Rangone 1999, Forsman 2004). In this study critical resources are investigated from the small business management perspective.Data were collected by postal surveys 2006 (N = 600) and 2012 (N = 580). In both years, data originally had two subsets: diversified farms (i.e. firms that have both non-farm entrepreneurial activities and agriculture) and non-farm rural small businesses. Data were analyzed by using quantitative methods: cluster analysis (k-means method), Kruskall-Wallis non-parametric test, χ2 – test, correspondence analysis and Spearman correlation.Two critical resources that are applicable for firms regardless their industry were defined: entrepreneurial orientation and business skills of the owner. Enterprises were divided into groups by two using these variables: (1) the entrepreneur's estimate of his/ her own business skills in relation to competitors; and (2) the entrepreneur's estimate of his/her ability to identify and realize opportunities in relation to competitors. The grouping was made by using k-means cluster analysis the solutions of Groups 2 to 6 The most obvious interpretation is the solution in Group 6, which formed a group of resources for "excellent", "good". “opportunity recognizers”, “intermediate” “average” and “poor*skills. According to results management and opportunity exploitation skills may have influence on the success of the rural enterprises. Thus, entrepreneur’s skills enable the creation of the competitive advantage and success of the firm can therefore be critical resources of the rural firm. According to the results, diversified farms and non-farm rural businesses were quite similar from this perspective.According to the results, those entrepreneurs that have good or excellent management and opportunity also had better other resources, such as technology, customer relationships, and vocational skills, available than the others. On the other hand, many of those entrepreneurs who evaluated that their management and opportunity exploitation skills were weak felt that they did not have enough capital and/or know-how. It can be concluded that it is important to support entrepreneurs’ management skills by education, consultancy, and other activities. Entrepreneurial orientation is more challenging to support by outsiders. Perhaps entrepreneurship education in schools, idea generation, and support the resilience of youngsters could provide support in the long run.

KW - 415 Other agricultural sciences

M3 - Poster

SP - 1

ER -

Närvä M, Rantamäki-Lahtinen LM, Ryhänen MJ. The critical resources of rural SMEs. 2018. Posterin esittämispaikka: RENT XXXII Research in Entrepreneurship and Small Business Conference 2018, Toledo, Espanja.