International Small Business Journal: Researching Entrepreneurship

This article critically reviews the literature pertaining to trust and entrepreneurship, highlighting the diversity and complexity of this construct. In addition, the interdependency of trust with context, as well as its dual nature in relation to control and as a sanctioning mechanism, is explored. Trust can be both a dispositional and a behavioural outcome; ‘genuine’ (personal) trust, sanctions and control coexist and co-evolve within and across different contexts. Trust influences entrepreneurship, not always positively, but entrepreneurial behaviour also has an impact on levels of personal and institutional trust. Future studies of trust and entrepreneurship need to acknowledge the bright and dark sides of trust, its duality and the different contexts in which it occurs. Ultimately, we need to develop a far more critical analysis of the importance and role of trust in the context of entrepreneurship.

Gaining and sustaining support for novel ventures is a vital yet difficult entrepreneurial process. Previous research on this topic has generally focused on the social competence and social capital of those creating new ventures, and their ability to align their ventures, with collective norms of novel ventures as sensible, acceptable and legitimate. We suggest that sensegiving – the ability to communicate a meaningful course for a venture – to investors and employees may also play a direct role in achieving support for a venture. Based upon a micro-ethnographic study of two individuals who were in the process of creating new ventures, we demonstrate how they give sense, to others in real time that involve not just their speech but also their gestures. Overall, we find evidence that in the early stages of the commercialization of a venture, metaphors in both speech and gesture are consistently used to emphasize agency and control and the predictability and taken-for-grantedness of a novel venture.

To date, knowledge about innovating culture in small and medium-sized enterprises (SMEs) remains a puzzle. In literature, entrepreneurship studies focus primarily on the entrepreneur or founder in start-ups. Most other SME innovation studies deliver a fragmented picture as they investigate singular aspects of innovating culture. Therefore, studies exploring the role of culture in SME innovation holistically are rare. This article presents the findings from a longitudinal study exploring innovating cultures in SMEs. The study applied an explorative research design based upon semi-structured and narrative interviews with those responsible for innovation management in 85 Central Swiss SMEs. From this data, four different SME innovation profiles representing clearly discernible innovating cultures were developed. The findings provide in-depth insights into SME innovation reality, thereby enhancing the understanding of the role of culture in SME innovation and providing a framework for improving innovation management.

The UK Company Voluntary Arrangement (CVA) is an early example of a bankruptcy regime designed to aid the rescue of financially distressed SMEs. Its efficacy hinges on its application to aid only viable companies with liquidation as the preferred option for companies that are not viable. This article proposes the resource-based view as a theoretical means to assess the viability of bankrupt SMEs. Seven hypotheses are tested and provide support for the central proposition, that a company which has resource strength, but is pushed into bankruptcy by temporary factors, is more likely to succeed in a CVA. The article concludes that the resource-based view is useful for analysing the viability of bankrupt companies and that well-designed bankruptcy law can promote SMEs and entrepreneurship.

The article focuses on the business start-up process of Chinese and Turkish restaurant owners in Finland. Of particular interest are the role of social capital in establishing restaurant businesses and how variations in access to bonding and bridging social capital can explain differences between the two groups. The study is based on two sets of research: one which concentrates on Chinese restaurant owners and the other on the owners of Turkish, kebab fast-food outlets in southern Finland. Regardless of the general similarities of the groups, a closer look at the start-up processes and business activities reveals distinct patterns and processes associated with the entry pattern in Finland: that is, who entered Finland, why they entered the country and how. The two studies indicate that relevant social capital can be accumulated in different ways depending on the migration pattern of the group.

This article offers both a conceptually valid measure of the relationship benefits derived from the relationship marketing, networks, services marketing and strategy literature and demonstrates the concept’s effect on business-to-business bonds. Four types of relationship benefit labelled cost, service, flexibility and image benefits are identified and their measures tested for reliability and validity. A structural model incorporating associations between a second-order relationship benefits construct and other salient relationship concepts is also tested, with significant direct associations between relationship benefits, trust and relationship investments evident, together with indirect associations between relationship benefits and instrumental, affective and normative commitment, absence of conflict, acquiescence, satisfaction and switching. The article calls for further refinement of the concept and evaluation of its associations in other contexts and in light of noted shortcomings in the literature.