Empowerment in Small Business

 

PEIJ 7,7

180

Empowerment in small businesses Pete terr Wyer and Jane JaneMason

De M ontfo ntforr t Unive Uni verr si sity ty,, B edfo forr d, UK  UK  K ey eywo worr ds E mp mpow owe er me ment, nt, Sma mall ll fir fi r ms, Or gani ganiza zatitiona onall lear learni ning, ng, Sus Sustainab tainable le dev deve elop lopme ment  nt   A bstr act T he conce concept of empow empower erme ment nt has rec r eceived eived a grea gr eatt deal deal of attention attenti on in in rec r ecent ent year years. s. H ow oweve everr, the emp empow ower erme ment nt knowl k nowled edge ge base base is pr pred edom omii nantly large lar ge comp company-o any-orr i ented with li li ttle evidence evide nce of understandi under standing ng wha whatt empow empowe er me ment nt means means i n a sma s mall ll business co context. ntext. I t i s i nap napprop proprr i ate to tre treat the sma small ll fir fi r m as a mi mi croc crocosm osm of of a lar lar ge or or gani ganisation. sation. T he sma small ll busi busine ness ss i s qualitative qualitati vely ly as well well as quanti quantitatively tatively differe different and this thi s arti ar ticle cle prop propound oundss that it i t is i s questi questiona onabl ble e whether whe ther the the co conce ncept pt of of empow empowe er me ment nt and its its vari var i ous dimensions dimensi ons as por portr traye ayed d in the the liliteratur teratur e ar are e r ea eadi dily ly transfer tr ansferab able le to small small busine businesses. It I t is i s sug suggested that that empo empowe werr i ng manage manageme ment nt appr appr oa oache ches are ar e key featur features es of of succ s uccessf essful ul gr ow owth-or th-orii ente ented d small small fir fi r ms but but the cur currr ent body body of of empow empowerment  erment  lilite terr ature fails fai ls to encap encapsulate sulate the idiosy idi osyncrasi ncrasie es and infor i nforma malilititie es of the small small busi busine ness ss op ope er ation, and thus convey convey under standi standing ng of the unique uni que and novel novel for forms ms of empo empowe werr me ment nt which which facil facilii tate  sust  su sta aina inab bledevelo lop pment nt.. Ca Case se st stud udyy insigh insightt is use used d to su sup pport th these pro rop positio sitions ns..

Introduction  T he ove overa rall ll aim of of th this is article article is to exp explore lore th the e ne nebu bulou lous s conc conce ept of  of  “empowerment” within the context of small business management and to suggest that, whil whi lemuch of the theacademic li literat teratur ure etends to discuss discuss the concept from a variety of informative perspectives and dimensions, in the main such discussion fails to address the distinctive characteristics and idiosyncrasies of  the small business. A ll organisati organisations, ons, large and sm small all,, are are toda today y struggli str uggling ng to deve vellop in an external operating environment which is epitomised by turbulence and uncertainty. Practitioners and academics alike are focusing on the need for

Parti cipation & Empowerment: An Participation International Journal, J ournal, Vol. 7 No. 7, 1999, pp. 180-193. ©MCB © MCB Uni Universit versity y Press, Pr ess,1463-4449

effective utilisation of people as the key resource in maintaining advantage in such an uncertain environment. Within this contextcompetitive of effective peopl peo ple e management, “empo mpowerme werment”, of often ten perceived as another buzz-w buzz-word ord for “employee involvement or participation” or some variation of “delegation”, has received a great deal of attention, sometimes being proffered as the “elixir” to organisational success. Within the small business context research shows that owner-managers vie vi ew people people management as one of thei theirr most impor important tant rol roles, es, and yet one of  thetasks they fi find themos ostt diff diffiicult (Hankinso (Hankinson n et al., 1997). While a multitude of the theor oriies, concepts and guidi guiding ng fr frames of insi insight ght haveemerged over the years and are are embr brace aced wi withi thin n the the human re resour source ce management knowl nowle edge base, it it can beargued that much of this thi s knowle knowl edgehas relevanceto large large org organi anisati sations ons and fail ails s to addre address ss the dist distiinctive characte characteri risti stics cs of of the the small business business.. Thi T his s paper commences by portraying the small business as a potential unique

 

problem type whereby qualitative as well as quantitative differences distinguish it from the large company. Such a conceptualisation is utilised to demonstrate the high level complexity of the small firm management task as it strives to cope with the vagaries of the contemporary operating environment. A ttention is drawn drawn to the dange dang ers of vi vie ewi wing ng the smalloffipeople rm as amanagement microco crocosm sm of  a ttenti largeon company and to the potentially limited utility theories, concepts and approaches which are propounded as applicable within the large large com company context. context. Having distinguished the small business context and warned of the need for caution in the uptake of management knowledge bases which may not fully address that context, the concept of “empowerment” is examined as a propounded “me “mechanism” for the eff ffiici cie ent and effecti effective ve util utilisati sation on of the thehuman resour reso urce ce.. It I t is i s suggeste suggested d that whi whill e a great great deal has been been wri wr i tten about about “empowerment” in in recent years, the conce concept as developed withi within n the literat teratur ure e is, in the main, oriented toward large organisations and much of its content canno ca nnott be readi readilly “transfe “transferrred” to small businesses. It It is i s fur furthe therr suggeste sted, d, however, that, if considered within the distinct operating contexts of the small business, “empowering management processes” may indeed be a distinctive feature of those small businesses which succeed in sustaining ongoing development, and that such management acti activi vity ty has not ye yet been encapsul ncapsulated ated in the “empo mpowerme werment” li literatu terature. re.  The art rtic icle le support rts s these suggestio ion ns by drawin ing g on in ins sig igh ht deriv rive ed fr fro om the authors’ ongoing research into the sustainable strategic development of  successful small business within the transitional economy context of Russia, the developing economy context of Malaysia and the developed economy context co ntext of the UK. UK . A cas case e study is i s util uti l ise sed d to suggest how em empowe poweri ring ng management approaches may be key features of effective management in growth-ori gr owth-orie ente nted d small small busi busine nesse sses. s. The T he base base insi nsight ght from f rom the cas case e is the then n integrated with overall understanding derived from our ongoing research in its totality to emphasise the potential role of empowerment in the small firm in facilitating the learning about and acting on unknowable open-ended change which whi ch predom predominantly impacts on the co contem ntemporar porary y busine busi ness. ss. It It is i s thus a strategic learning perspective to the unfolding of understanding of  “empowerment” within small business which is offered as an innovative context for enhancing understanding of what empowerment may mean in a small firm context.  T he artic rticle le conclud lude es by suggestin ting g th tha at if we we are to unders rsta tan nd wh wha at empowerment means within growth-oriented small firms, we must expect to find that the informalities and idiosyncrasies of such businesses will see successful small businesses “empowering” their workforce through management approaches not fully reflected in the current “empowerment” literat teratur ure. e. T hi his s may someti tim mes beby mechani chanisti stic c means (such as at the level of  steady state production activity where a devolving of responsibility may be apparent at the margins), occasionally be opportunistic or ad hoc and at tim times may be vie viewe wed d as a “natural “natural facil aciliitati tating” ng” mana anage gement approach whereby whereby the the

Empowerment in small businesses

181

 

PEIJ 7,7

182

positioning of key workforce provides the potential for their empowerment to underpin organisational learning from their day-to-day interfaces with key informants on the boundaries of the firm’s activities.

T he need ne ed to recog recog nise the disti nctiveness ss the sm all business Small businesses can not bedistinctivene understood by of viewing them as “little big busine busi nesses” (Welsh and Whi White, te, 198 1984) 4).. The T he depth of underst rstanding anding of the small business toward which academics continue to strive will only derive from recog rec ognit nitiion that that cle clear qualitative quali tative as well as quanti ntitative tative diffe differen rence ces disti distinguish nguish the small firm from fromthe large com company (O’Farrel (O’Farrel and Hitche Hitchens, 1988). For Wyer (1990), small firms face potential unique problem types deriving out of ownermanager and size-related characteristics (Smallbone and Wyer, 1994) which may well contradict the commonly perceived high flexibility, fast responsiveness traits frequently propounded as key sources of competitive advantage for the small firm (Chisnall, 1987). Many of the theprobl proble ems face faced by small busi busine nesses are ine inevi vitably tably centr ntre ed on the owner-manager. For example, owner-manager related characteristics and constraints can be demonstrated by focusing on the motivations, values, attitudes and abilities of the owner-manager (Smallbone and Wyer, 1994). For instance, the owne owner-mana r-manager may well bereluctant to to recr recrui uitt exter external experti xpertise se owing to independence and autonomy motivations. Such expertise may be essential for developing small firms to facilitate understanding of external change chang e issues pertai taini ning ng to the organisati organisation on (Wye (Wyerr and Mason, 1998). The T he alte alt ernati native ve to the external suppl supple ementi nting ng of the management capabi capability of the owner-manager is for the firm to continue to struggle on within the context of  the owner-manager’s own limited capabilities and to confront a possible reluctance to delegate and allow more autonomy to existing key staff (Ket de Vriies, 1977). Vr Examples of size-related characteristics and constraints are limitations relating to the small business ability to offer career paths or reward packages equitable with large organisations which can marginalise the small firm in relation to the labour market and the attracting of quality workforce (Curran, 1988). The T he abil abiliity to attract attract reasona reasonabl ble e cost finance finance to underpi pin n sustaina sustainabl ble e development can be restricted by a lack of profit track record and/or a lack of  collate coll ateral levels demanded by lenders. Moreover, the exter xternal nal operating operating envi nvironm ronme ent withi wi thin n which which large large and small firms operateis increa increasi singly ngly dynamic and compl ple ex (Johnso (J ohnson and Scholes, 199 1993) 3),, and the turbulence and uncertainty under which all businesses function points to the need for owner-managers and management teams of growing small businesses to be capable of developing abilities for coping with unpredictable, unknowable, unk nowable, open-ended change(Stacey, 1990). Ti T ime and re resour source ceconstr constrai aints, nts, together with the unique problems of the nature discussed above, culminate to make smal alll busi business ness management a highl highly y complex task. task. A cceptance of the distinctivene disti nctiveness of the small small firm and of of the uni unique que problems which it potentially faces gives emphasis to the dangers of treating

 

the small busi busine ness ss as a mi microcosm of the the large com company pany.. In I n parti particular, cular, it it highlights how management knowledge bases appropriate for large organiisations may wel organ well have limite ted d appli applica cati tion on wi withi thin n small fi firrms. Thus, Thus, just as management vehicles such as rational long-term planning may be iwith nappropri nappropr iate mode s of managechange ment for forsituations, the smallthat the business busi nesskit att tte pting pti ng to deal unknowable, open-ended tool ofem management vehicles embraced within the body of management knowledge known as human resource management (HRM) may, in its “pure” form, have limited application for the small firm. By the same token, the effective utilisation of the human resourceis li likely to to bea crucial issuein thesmall busine business ss ide identi ntifi fica cati tion on of and acting acting on unfoldi unfolding ng open-ended change, and the questi stion on thus arise ari ses as to how successful small businesses effectively manage their staff so as to sustain development in such a hostile operating environment.

Empow ower erme ment Empowerment is is in in vogue. It It could could be perceived as as another “buzz word” of the 1990s referred to in all nature of business literature, videos which expound its valuable workplace and “business However,utilisation there arein pethe rceived difficult diff culti ies.as Wpart What hat is iof s it? ieveryday t? Arguably, A rguably, there can caspeak”. n be no defini niti tive ve fram framing of a concept: as Lashley Lashley and McGoldri McGoldrick ck (1994, p. 23) 23) state, “… one of the ‘limits’ of empowerment is a lack of conceptual rigour in the ways the term is actuall actually used”. For Col Cole e (1997, p. 373) a sound sound conceptual ptualiisati sation on of  empowerment would see it as “a method of delegation which enables work decisions to be taken as near as possible to the operating units and their custom custo mers – both internal and external”. external”. Thi T his s portrayal portrayal re refl fle ects the vi vie ew of  Mitchel Stewart (1994, p. 6), who purports not only the “devolving of tasks” but “decisi cision on maki aking ng and and full full res respons ponsiibil biliity”. Marchington Marchington and and Wil Wilki kinso nson n (1996, p. 112) determi termine ne that “im “i mpr prove oved le levels of customer servi service ce” have been achie achieved by some organisations by moving away from rigid job descriptions and “workiing to contract” towards a culture “work culture of “beyond “beyond contr ntract” act” which which enco ncour urage ages “empl ploye oyee initi initiati ative ve and empowerment”. A tt tte empted “defini niti tions” ons” of “empowerment” appear, to a gr grea eat extent, to be a variation on a theme. Each one of us internalises the concept in a slightly different way. For example, Smith and Mouly (1998) explore the difficulty of  “definition” and determine from their case studies that there were differing perceptions percepti ons by empl ploye oyees as to to the nature nature of of empo mpowerme werment. Honold’s (1997) enlightening review of the literature on employee empowerment suggests that current understanding is embedded in five groupings within the literature: (1) l ead ade ershi rship’ p’s s role rol e in creati creating ng an em empoweri ring ng conte context xt wi withi thin n an organisation; (2) the indivi ndividua duall empowered state; (3) co colllaborative work as empowerment;

Empowerment in small businesses

183

 

PEIJ 7,7

184

(4) str structural uctural or proc proce edural changeas empowerment; (5) the mul ulti ti-di -dim mensi nsiona onall pe perspe specti ctive ve enca ncapsul psulati ating ng much of these four categories. In highl highliighti ghting ng the roots of the conce concept pt of empl ploye oyee empowe powerrment, Honold Honold gives emphasis to the wealth of relevant management knowledge developed over the years and apparently capable of serving as effective guiding management vehicles for organisations striving to bring the best out their key “people resource” by some form of underlying “empowering” management approach. approa ch. The T he build-up build-up of underst rstanding anding of the conc concep eptt of empowerment is, is, of  course, significantly embedded in the human relations school of understanding and influencing organisations which provided a new language for managers (Lawre (L awrence nceand Lee Lee, 1989). The T he highly highly infl nflue uenti ntial al work works s of Herzberg (1966, 1968) and Maslow (1954) provide guiding motivational models which highlight clear advantages and benefits for empoweri powering ng management approaches: He Herzberg’s two-factor theory, for example, propounds the benefits of “job enrichment” whereby interest, challenge, responsibility and problem-based learning are, where possible, built into a job. In the area of leadership, key works within the literature portray shifts from an early focus on the quest for a one best leadershi rship p style stylethr through ough to thebenefits of a conti continge ngency approach to leadershi rship p (for (f or example, Bl Blake and Mouton, 1964; Hersey and Bl Blanchard, 1972), whereby the manager’s approach to gett ttiing the best out of the the wor work kforce wil will depend on the nature of the task in hand and its operating context, the quality and characteristics of the workers themselves as well as the manager’s own characteristics and preferred leadership style. Clearly, the motivation and leadership literature point to, in some situational and worker-capability/needs contexts, the potential to get the best out of employees through empowering management approaches such as delegating responsibility, authority and power to subordinates in order to anchor their capabilities fully. Moreover, more recently the literature has begun to bring attention to the benefits associated with organisational leaders effecting collaborative working which extends beyond mere “group” work (involving a piecemeal collection of individuals) toward “team” working, whereby individuals have a collective rationale where there is clea clearr understanding that indivi i ndividua duall perf rforma ormance nceco contri ntribute butes direc directl tly y to to the overal overalll good (Godf (Godfrey, rey, 1990). Such ateamcontext has the potential potential to derive derive high level organisational returns by, for example, giving individuals the authority to anchor their perspectives, understanding and learning to the good of the collective whole. A dding a fur furthe therr co com mpl ple ementary quali quality ty to to the human rel relati ations ons view of  organisations and its “tool kit” of empowerment-based management approaches, is, moreover, the view that organisations are not a unitary whole, but a loo loose se and dynam dynamic “coming together” of secti sectiona onall gr groups oups and and indi indivi viduals duals (Lawrence (L awrenceand Lee Lee, 1989) and thus should should betr trea eated as a “plur “plural aliist” mode model (that is, the political school of thought). We learn from this school that individuals or groups gr oups withi within n a busine business may constrai constrain n empoweri powering ng attempts at management.

 

A lso, care carefful con consi side derrati ation on of of powe power-base r-bases s among among,, and aspir aspirati ations ons of of, individuals or groups can facilitate the sharing of power to the benefit of the organisati organi sation on as a whole whole (Handy, 1976; Pfe Pfeff ffe er, 1981). Clearly, the literature has much to offer in its build-up of insight over time in ter term s of enhancing enhancin g understanding understandiand ng ofdifferent what empo what mpowerme werment ma y or coul could dwithin mean formdifferent organisations operating contexts organisations; as such, it offers high potential in providing guiding frames to aid in the effective management of people. Whether the propounded management approaches and techniques integral to this literature begin effectively to address the opportunities, problems and management issues which epitomise the world of small business practice is, however, highly questionable. It is on this issue which the remainder of this paper focuses. In order to achievethi this s insi insight, ght, areas areas of the thequali qualitati tative ve casestudy re rese search arch of  the authors relating to the sustainable development of small firms are utilised to provide empirical input from which to begin to draw tentative conclusions.

Drawing on case study insight: a Malaysian furniture manufacturer  Th  T his is a case in ins sig igh ht of a fa fas st-develo lop pin ing g uphols lsttery fu furn rnit itu ure manufa fac cturer and retailer which has achieved remarkable growth through the application of  management approaches which challenge the orthodoxy of the rational planning schools of management and supports the view that to date little is known about strategic decision making and management within the smaller business. busine ss. The T hefi firrm is sel selected to provide provideinsight into i nto a small busine business ss which which has has sustaine sustai ned deve vellopment from from an ori origi ginal nal work workfforce of of si six x empl ploye oyees in in 1989 to reach medi dium um-si -size ze status of 250 employees by 1996, thereby encapsulati encapsulating the the small business growth process (for comprehensive presentation of the case study st udy see Smal alllbone and Wyer (1997)). Inte ntegr gral al to to the succ succe ess of the busi business is is the hi high gh level abi billity of one of its its three owner-managers to interface with the firm’s external domestic and international operating environment. From a purely domestic orientation the firm developed over a six-year period toward active export involvement and for ore eign direct direct inve investment. Whi Whillethe fir firm’s modeof management is is not based on any formal written plan, the owner-managers do have a mental framework of  future development which serves as a frame of reference for consideration of  working through of opportunities revealed from close interaction with the external envi nvironm ronme ent. The T he mental fr f ramework is not rigi rigid, d, but is is adjusted as relevant change in the form of opportunities or threats are discovered. Effectively, one of the three owner-managers has been empowered to fill a disco di scove verr y ro r olewi with th a particular parti cular closeinteracti raction on with with the exte xterrnal envi environm ronment. In terms of of new produc productt and market development, it it is is almost a trial trial and er error approach.. The approach T he di disco scove verry proce process eff ffe ecti ctive velly dra draws on opinion opinion and and expert xpertiise from a wide variety of international sources as a “base” input for a dialogical learning process – between owner-manger and international sources of input and between the owner-managers themselves. For example, the externallyoriented owner-manager has a list of 20 to 30 Belgian and German suppliers

Empowerment in small businesses

185

 

PEIJ 7,7

186

whom he uses to derive inf nfor orm mati ation on about competi petitor tors s and to become familiar with wi th mark marke ets. The T he natur nature e of the rel relati ationship, onship, howeve ver, r, is is not one one of fl fleeti ting ng conve co nversati rsation on but but rathe rather of him “di “digging infor inform mation out out of the suppli supplie er”. The T he resultant levels of understanding of activities of key international competitors, the natureare of markets relevantnecessary re external chang change e issues impacting im on those markets used toand consider actions to allow for ensuring sustainable foreign entry strategies, maintaining of existing competitive edge and/or and /or for cre creating ating new new inno i nnovative vative area areas s of activi activ i ty ty.. An A n inte i nterr nationa nationall understanding in terms of familiarity with markets, what is available, what is developing, who is developing and how, underpins management actions for improving the firm’s competitive stance in its overseas and domestic markets. Dialogue continues between the owner-managers and appropriate changes in operati ationa onall beha havi viour our are worke worked through. through. Those Those cha change nge ide deas as in in turn tur n are bounced back for feedback and views of the suppliers or other key external infor nform mants ants.. Age Agents, distri distributors and suppli supplie ers are fel felt to be “very im impor portant, tant, your fingers, your feelers”.  T he bu buildild-u up of an an overa rall ll workin working g netw two ork of co conta tac cts also in invo volve lves s interface the world stage at all upholstery fairs, paper manufacture fairs andon furniture trade fairs, of whichmachinery allow for the build-up of insight to inform decisions on appropriate mode of entry and operation within specific markets.  The, at times, opport rtu unis isttic natureof the stra rattegic actio ion ns of this fir firm m hold lds s dee de ep signif signifiica cance nce. Acti A ctive ve external envi nvironm ronment inte i nterf rfac ace e through an an ongoi ongoing discovery mode of management sees the firm unfolding its own future and movi oving ng down strategic strategic development paths paths it it never envisage envisaged. Commensur nsurate ate wi with th the the gr growth owth of acti activi viti tie es, the owner-managers have had to eff ffe ect changes in in the styl style eand type types of management – latterl atterly y toward toward a more professional management. When small in operation, the three owner-managers held many portfolios of responsibility but, as the firm has grown, middle manag anage ers have been buil built-i t-in n – an expor exportt manage manager, proj proje ect manage manager and six six ope rations ons ge “T iddle ranki taking taki ng ove ove part ofgour portfoli olio” o”..  T  Th herati thre e om wana nerr-m mrs. ana“The gehe r dm ire ir e ctorsranking haveng resispo nsib ibilit ilitie iesrre lattin la ing to: portf (1) market development, produc productt development and prom promoti otion; on; (2) fi fina nanc nce e; (3) proj proje ects and contracts contracts (hotels, corporate corporate sector, etc.). With re With regard to underpinni pinning ng growth with wi th re relevant skil skilled peop peoplle resources, the firm’s attitude attitude can can beexempl pliified by re referenceto engi enginee neeri ring ng capabi billiti tie es where they have tried engineers with Masters degrees but this has not proved wholly successf ssful ul:: “someti tim mes the best pe peopl ople e are our lowe l ower rank work worke ers to move up to run run things. things. It takes an MBA si six x months months to digest digest such areas areas as fabrics. fabrics. A superv rviisor has buil built up cr crucial ucial experi xperie enceso hegets prom promoted. He can re respond effectively to our branch managers which is crucial”. It is felt that very few exter xternal nal “experts” “experts” exi exist st who have sub-sector speci specific knowle knowledge. Thi T his, s, in turn, tur n,

 

is balance balanced by clea clear evi videnc dence ethat someother members of the thewor work kforce arenot fully trusted: the owner-management clearly felt uncomfortable with the prospect of relinquishing power to these individuals beyond certain limits. Inde ndee ed, tight ti ght control mechan chaniism sms s were in place pl ace to li limit the the freedom freedom of the these staff. Effectively, empowering management activities within this firm begin to emerge as “contingent processes”: adherence to and relaxation of the management control paradigm is contingent on owner-manager preferences, the natur ture eof organisati organisationa onal tasks and activi activiti tie es and owner-manager con conffidence and trust with regard to particular employees. Empowerment thus exists in parts of the organisation manifesting in a variety of dimensions and often embedded in in inf infor orm mal and idi idiosyncr osyncrati atic c management proce processes.

An organisati organisationa onal lea ear rning perspective perspective to enhanci enhancing ng unde understanding rstanding of the concept of of empowe wer rment withi within n smal small businesses  The above case in ins sig igh ht is in ind dic ica ativ ive e of the fin find din ing gs of the author’s researc rch h to date in that how successful small businesses effect their strategic development processes would appear not to be steeped in their application of rational longterm planning modes of management, but rather in the way they build underst rstanding anding about unfoldi unfolding ng unknowa unknowabl ble e ope open-e n-ended change si situati tuations ons (see the work of Stacey (1990, 1991, 1993) on the strategic management of  organisations striving to cope with open-ended change situations). Rather than tidy, systematic step management processes, sustainable small firm development seems to be founded substantially on relationship building, where accidental encounter, opportunistic and intended, but informal, interface with key actors on the boundaries of the firm’s activities, all play a key role in facilitating learning about open-ended change. Resultant derived facts and insight are brought back into the firm where internal dialogue between key decision makers takes place to create small firm-specific information as a basis for considering changes in organisational behaviour in terms of adjustment to existing markets, products and/or processes focus. Dialogue is a key activity within this learning process, which unfolds creative and innovative ideas from the coll colle ective inputs inputs of the participants. participants. The T hese di dialogical alogical learni arning ng processes centre not only around the internal small firm staff, but also the inputs of the key exter xternal nal infor i nform mants. The Thewhol whole eprocess may of ofte ten n beiterati terative, ve, with with a to-ing and fro-ing fro-ing betwee between the firm’s staff and theexter xternal nal actors. A lack of re resources and/or confidence regarding the unfolding of understanding may result in trial and error or experi rim mental activi activiti tie es as an integral part of the lear learning proc proce ess. Crucially, it appears that embedded in such strategic learning processes within those small firms which successfully sustain development are mana anage gement approaches based on empoweri ring ng key indi indivi viduals duals wi withi thin n the fir fi rm to facilitate learning activities which allow the firm to cope with unpredictable impac pacti ting ng changesit situations uations.. By By je j etti ttison soniing man many y of the tradition traditional al paradigm paradigms s of mana anage gement and instea i nstead using, using, as inte interrpretative fr frames, the type of str strate ategi gic c lear arni ning ng processes re revealed in in this this re research, a grea greater depth of understanding understanding

Empowerment in small businesses

187

 

PEIJ 7,7

of what empowerment means in a small firm context begins to emerge. For the successful small firms in the research the following dimensions of  empower powerme ment were re reveal veale ed: • Re Resource sources, time an and d oft ofte en abil biliity constrai constraine ned sytematic col collection of  of  relevant data or comprehensi nsive ve structured structured anal analysi ysis s of the envi nvironm ronme ent. A wi windo ndow into into cr cruc ucial ial chang nge e ac activ tiviiti tie es within within the firms firms’’ indu industry stry an and d the identification of key influencing forces is derived through the buildup of external relationships with key actors (suppliers, distributors, agents, etc.). etc.). In I n the Malaysi Malaysian an case case fir firm di discussed above, above, this this was facil aciliitated through the creati tion on of “management slack”, slack”, whereby whereby a ke key role rol e of one of the three threeowner-managers was to spend conside considerable time time interfacing with the external environment. Creation of this slack invo nvollve ved d an em empoweri ring ng approach by the two internal internallly based based co-owne co-ownerrmanagers who agreed to release the interfacing owner-manager from other internal duties, and a “self-empowering” approach by the interfacing owner-manager who not only agreed the role with his collea coll eagues, but also also chose choseto take self power thr through ough theway hebui buillt the

188

role toward a relating vital informing function. Forlearning other activity small firms, empowerment to such environmental often invo nvollve ved d owner-managers or key empl ploye oyees extendi extending ng their natur natural al dayto-day routine or accidental interfaces with key external actors such as supplliers co supp consc nsciiou ously sly to extr extrac actt re relevant insight insight wi with re regard to external change force forces. •

T ho hose se individuals charg charge ed to interf rfac ace e wi with th the exte xterrna nall envi vironm ronment are further empowered to attempt to create information out of that insight which is specific to the context of their firm. Effectively, insight or facts received from external interface is a stimuli for the receiver, but in its crude form may mean little for the receiving small firm until worked into small firm-specific information.

•

For thecreated inform information to inform futurestrategic directi direction on,, afur furthe ther contextualisation involves key decision makers in formal or informal dialogu dial ogue e to cons consoli olidate datetheir own interpretati interpretations ons of of the inform information into into a collective agreement in the form of group decision makers’ meaning.  Th  T his was oft fte en a lengthy process wit ith h unders rsttandin ing g build ildin ing g out of a to-ing and fro-ing between external key informant and ownermanager/key internal decision makers to clarify an emerging idea. Empowerment here includes leadership facilitating activity in terms of  time and resource creation for dialoguing and collaboration and, at its most formal level, for project team building. Individuals are empowered through co-operative actions, sharing of insight and understanding and through working together. However, within the participant small firms key ke y indivi i ndividua dualls are brough broughtt into i nto theco colllaborative le learni arning ng proce process – but often only on projects or change situations which are relevant to their area of of expert xpertiise. Thus, Thus, we may here here be tal talki king ng not of the empowe powered red

 

organisation, but of empowerment as a contingent and fluid concept, with some individuals being “empowered” as and when needed on a situation-specific basis. •

T he cre create ated inform information ation and and atte attem mpted assigning assigning of mean aniing into a collective understanding was within a context of willingness to build into an existing framework of strategic activity in terms of where the owner-management curr currentl ntly y conside considered the busine business would would be in a few years ye ars tim ti me. That T hat is, is, if if the the new underst rstanding anding revealed oppor opportuni tunity ty or threat the firms were prepared to take action in terms of adjustments to markets, products and/or processes to underpin enhanced competi petiti tivene veness and devel velopm opment of of the the busi business. ness. Implem mpleme entat ntatiion of  strategic developments of this nature which translate into growth of  activity may involve the creation of new roles within the business which can ca n often only only beeffec ffecti tive vely fi filled through utili util isation of the base baseindus ndustr try y sub-sector specific experience of existing workforce. Or there may be an owner-manager unwillingness to recruit externally. In such instances, selected staff members are given the oppor opportuni tunity ty to grow grow into into new roles. roles. In instance instances where external staff are recr recrui uited ted,, empowerment re relates to to owner-management relinquishment of areas of their previous roles and also elements of self-empowering in terms of influencing their own behaviour to accommodate new growth-related activities.

•

Empowerment in small businesses

A fr fre equent finding finding was that in in the theplac place eof writte written pl plan ans s is a cl clear menta ntall framework in the form of a mental qualitative, and yet flexible, “preferred “prefer red end”. In In the absence of quantif quanti fied long-term long-term objectives objectives or vision, this mental framework encapsulates the existing focus of  markets, products and processes activity of the firm and the direction it is fe felt the these should should be developed into into the future, future, given thecur current rent le leve vell of  understanding of the firm’s external operating environment. It provides the focus for underpinning of the deeper learning required within the firm to determine the significance of crude external insight for current markets, products and processes activities – the focus for actual adjustment to markets, products and processes activity if the learning so suggests. Within this context, the overall learning processes, including the actual adjustments to organisational behaviour, may involve emerging ideas being implemented on an experimental basis with evi vidence denceof ad hoc pockets of empowerment which draw on individual capabi billiti tie es as and when needed.

Conclusion It appears that the adoption of a strategic learning perspective to the unfolding of understanding of the form and role of empowerment within a small business supports the notions emphasised by Honold (1997) that no single set of  contingencies can describe empowerment – that it is multi-dimensional.

189

 

PEIJ 7,7

190

Small businesses are potentially ingrained with disempowering structures, many of which derive from owner-manager and size-related characteristics which we argue above can manifest in unique problem types impacting on the small firm. For example, one can expect to find that owner-manager attitudes and motivations in many firms centre around independence, and control co ntrol manif anife esti sting ng in insmall an autocratic autocrati c mana manage gement style styl e wherebyautonomy any for form ms of dele delegati gation on or empowerment are are kept to to a mini nim mum. For othe others, one way of  circumventing the impact of potential unique problem types is to create an empowering culture whereby empowerment and self-empowerment become more “a way of doing things around here”, albeit often in a rather ad hoc or opportunistic situation – and employee-specific manner. In such firms we begin to underst rstand and the mul ulti ti-di -dim mensi nsiona onall nature of empowerment in in terms of: •

Willilingn Wil ngne ess an and d abil biliity of of le lead ade ership to nurture chang nge es in culture culture an and d structur str ucture e commensur nsurate ate wi with th growth growth stages of development.

•

Idios diosync yncratic ratic and and informal learning ac activi tivitie ties s in which experi rim ment and and trial and error are facilitated.

•

Fluid coll colla abo borative rative ac activi tivities ties,, whe where reby by key worke workers rs drift drift in and and ou outt of  of  team-based activities on an incident or project-specific basis. Here an individual’s power base is fluid and dependent on proximity to ownermanager/key decision makers, probably for the duration of a specific projectt or incident. projec

•

Small business deve vellopment-e nt-em mbedded – whe whereby reby em empowerment may relate to an enlarged role which the individual must him/herself “grow into” (often without formal training) and which may also be accompanied by self-empowering actions by the owner-manager who strives to influence his/her own behaviour to cope with the vagaries of  the new emergent management tasks which the firm’s growth is unfolding (or the management abilities and tasks which are necessary to facilitate the growth).

•

A typeof “mutual inter-relation r-relationship ship empo powe werment” whi which fuels theselfempoweri powering ng of the owner-manager where an empowerment in i n the for form m of anchoring the know-how of key external informants is crucial to the self-development of the owner-manager as he/she is constantly confr co nfron onte ted d with wi th new new unfoldi unfolding ng situations situations in in the wake wake of of the fi firrm’s growth. T hi his s togethe togetherr wi with th a “counter “counter empoweri ring” ng” whereby whereby key external informants such as suppliers develop into a form of  management extension to the small firm underpinned by co-operation, sharing and working together. Such an empowering relationship may be viewed as an idiosyncratic management approach whereby time, resource and management ability constraints are circumvented by anchoring-in, say, supplier, agent, or distributor know-how to broaden and deepe pen n existi existing ng small firm mana anage gement capabi capabillity.

 

•

“Empowe “Empo werment” within the growth-o growth-ori rie ented small bus busiiness is probably best conceptualised in terms of “contingent processes” whereby prerequisite to its occurrence is management’s first feeling confident that it is “safe” to relinquish power and to give more authority to particular emconfidence ploye pl oyees (Johnson, (Johnson, 199 5; Fle Flregard eming,to199 Integr ntegral al toability this are this the issues of and trust with an1). employee’s to undertake effectively a particular task and the likelihood that employees will be given boundaries of autonomy within which to operate and innovate.  Th  T his is support rtiv ive e of th the work of Ge Gero roy y et al. (1998) who build on the “boundari “bou ndarie es” insi insight ght of Bl Blancha anchard (1997) and the “trust” “trust” issue issuedeveloped by Mountford (1997). Within the small business context it seems likely that, even in those growing firms where “empowering management approache approac hes” are evi vide dent, there wi willl be duali dualisti stic c paradigm paradigms whereby whereby the traditional authority and power values and motivations of the ownermana anage ger combi bine newi with th the low low le level ski skillls and negati gative ve atti ttitude tudes of some workers to see a management control paradigm dictate. Paralleling this, however, may be developmental situations whereby unfolding tasks and activities are viewed as compatible to the developing capabilities of  particular individuals and where the owner-management control paradigm gives way to bounded territories of authority and responsibility for those employees with whom the owner-manager feels “safe”.

It is a real depth of understanding as to the nature and form of management approaches and activities that underpin sustainable small business development which continues to prove a void in the management literature. Embedded in this yet-to-be-revealed knowledge base will be further underst rstanding anding of what empowerment means in in a small small busi busine ness context. T hi his s paper has attempted to suggest the need to relax the use of large companyoriented paradigms as interpretative frames of reference for the enhancing of  unde rstanding rst andingng of sm all ge busine busi ne deve vellopm nt.aIn Innove thisl way this we may begi gin n toefi fiand that e mpoweri powering mana me ntss approache seof or unexpe cted natur nature re key vehicles to the sustainable development of the growth-oriented small business. References

nage gerr ial Gr id , Gulf Blake, R. and Mouton, J. (1964), T he M ana Gulf Publi Publishing, shing, Hou Housto ston, n, TX TX. nce entive, Vol. Blancha Bl anchard, K. K . (1997), “Out with with the old and in with wi th the new”, I nc Vol. 171No. 4. Cole, Col e, G.A G.A.. (1997), Personnel Management , Letts Educational, London.

 Sma all Fir ms in Actio Action. n. Ca Case se Hi Histo storr ie iess in Entrep Entrepre rene neursh urship ip, McGraw-Hill, Chisnall, P.M. (1987), Sm Maidenhead.  Jour ur nal of G ene nerr al Curran, Curr an, J. (1 (198 988) 8),, “Trai “Training ning and research strategies strategies for f or sm small all fi firms”, rms”, Jo  Mana  Man age gem ment, Vol. 3, Spring. Fleming, P. (1991), “Empowe “Empowerment strengthens strengthens the rock”, Man  Mana age gem ment Re Revie view  w , Vol. Vol. 80 No. 12.

Empowerment in small businesses

191

 

PEIJ 7,7

192

Geroy, G.D., Wri Wright, P.C. and Anderson, Anderson, J. J. (1998), “Strategic “Strategic perfor performance manceempowerment model”, E mp mpo owe werr me ment nt in Organi Or ganisations sations, Vol. 6 No. 2. Godfre Godfr ey, P. P. (199 (1990), “Managem “Management – theori theorie es and practice practi ce”, in A rmstrong, M. (Ed.), (E d.), T he New   Mana  Man age ger’s r’s Han Hand dbook , Kogan-Page, London. Handy, C. (1976), Understanding Organisations, Penguin, Harmondsworth. Handy, Hankinson Hanki nson, A., A ., Bartl Bartle ett, D. and Ducheneaut, B. (1997), “The “The key fac factors tors in the profile profil es of small all-nterr na nationa tionall medium enterprise owner-managers that influence business performance”, I nte  Jo  J ourna urnall of Entrep Entrepre rene neurial urial Be Beha havvio iour ur and and Re Rese sea arch, Vol. Vol. 13 No. 4, pp. 168-75  Mana age gem ment and Organ Organisa isatio tiona nall Be Beh havio viour  ur , Pre Hersey, P. and Bl Blanchard, K. K . (1972), Man P rentice ntice-Hall -Hall,, New York, York, NY. Herzbe Herzb erg, F. (1966), Work and the Nature of Man, World Publishing Co., New York, NY. Herzberg, F. (1968), “One more time Herzbe time: how do you motivate motivate empl ployee oyees?”, Harvard Business Review , Vol.. 57 No. 4, pp. 53-62. Vol mpo owe werr me ment nt i n Honold, Honol d, L. L. (1997), “A revi revie ew on the literat teratur ure e on employee empowerment”, E mp Organisations, Vol. 5 No. 4. xplorr ing Co C or por ate Str ategy , Prentice Hall, London.  Joh  Jo hnson, G. and Scholes, K. (1993), E xplo  John  Joh nso son n, P.R .R.. (1995), “Bra Brains ins,, heart an and coura urag ge: keys to empo powe werm rme ent and self-d lf-dire irec cted leadership”, A mer ic ica an Journa urnall of Mana Manage gem ment De Deve velo lop pment , Vol. 1 No. 1. Ket de Vrie Vri es, M.F.R. M.F.R. (1977), “The “Theentr ntre epreneur uriial pe pers rsonali onality: ty: a person at the crossr rossroads” oads”, J  Jo ourna urnall of Manage M anageme ment nt Studies S tudies, Vol. 14. mpow owe er me ment nt i n L ashley, C. and McGol McGoldri dri ck, J. J . (199 (1994), 4), “T “The he limits of empowe empowerrment”, E mp Organisations, Vol. 2 No. 3. nsight ht into i nto Manageme Management , Oxford University Press, Oxford Lawrence, P.A. P.A. and Lee Lee, R.A . (1989), I nsig and New York, NY.

Personnel sonnel and D eve evelopm lopment  ent , Institute of  Marchi ngton, M. and Wilki Marchington, Wil kinson, nson, A . (1996) 6),, Cor e Per Personne Pers onnel and Development, London.  Motiva tivatio tion n and Pe Perso rsona nality  lity , Harper & Row, New York, NY. Maslow Masl ow, A. A . (1954), Mo Mitchel Mi tchel Stewart , A. A . (1994), E mp mpow owe er i ng Peo Peopl ple e, Penguin, London. Prod oduction uction and Inve I nventor ntoryy Mana M anagem geme ent Journal Journal, Mountford, J.R. (1997), “Empowerment costing”, Pr Vol.. 38 No. 1. Vol O’Farre O’Farr el, P. and Hitche Hitchens, D. (1988), “Alte terrnative theori orie es of small fi firm rm growth: a criti cri tica cal revie review”, w”, E nvi nvirr onm onme ent and and Planning , Vol. Vol. 120. Pfeff Pfe ffe er, J. J . (1981), Power in Organisations, Pi Pitman, London. xporr ting – Develo Developm pme ent of of an A nal nalytica yticall Small bone, D. and Wyer, Wyer, P. (1994), SM E s and E xpo Framework , Small Business and Enterprise Development Conference, Manchester. Small allbone bone, D. and Wyer, P. (1997) 7),, “The “T he str strate ategi gic c deve vellopment of a Malaysi Malaysian an SME fur urni nitur ture e Case Stu Studie diess for for E nt ntre rep pre rene neurs urs and and Man Mana age gers rs fro fr om manu anufacturer”, facturer”, in in Todo Todorov rov, K. K . (Ed.), (Ed.), 25 Case Practice, Inter-University Entrepreneurship Development Centre, University of National and World Economy, Sofia. Smith, A.C. A .C. and Suchitra Suchitra Mouly, V. (1998), “Empowerment in in New Zealand fir fi rms: insights insi ghts from from two cases”, E mp mpo owe werr me ment nt in Organi Or ganisations sations, Vol. 6 No. 3. Stacey, R.D. (1990 (1990), ), “Dynamic str strate ategi gic c manage management”, in i n A rmstr strong, ong, M. (Ed.), T he New   Mana  Man age ger’s r’s Han Hand dbook , Kogan Kogan Page, London London. Chaoss Fr F r on onti tie er : Cr eative Str ate ategi gi c Control for for Smal Smalll Busi ne ness ss, Stacey, R.D. (1991), T he Chao Butterworth-Heinemann, Oxford. Stacey, St acey, R.D. (1993), Strat  Strate egic Man Mana age gem ment and Organ Organisa isatio tiona nall Dyn Dyna amic icss, Pi Pitman, London.

 

Welsh, J.A . and White White, J.F. J.F. (1984) 4),, “A small business is not a littl li ttle e big busine business”, in Growing Conce Conc er ns: B uilding an and d Managing the Smal Smalle lerr B usiness, Harvard Busi Busine ness Revi Revie ew Exe Executive cutive Books, Wiley & Sons, New York, NY. Wyer, P. (1990), “The “The effects of varyi varying ng forms for ms and degr gree ees of government interventi intervention on on the eff ffe ecti ctive ve competi titi tive veness of UK small busine busi nesses”, unpublishe unpublished PhD thesis, Aston. A ston. Wyer, P. and Mason, J. (1998), Wyer, (1998), “A n organisati organi sational onal lea l earr ni ning ng pers perspe pecti ctive ve to enhancing enhancing nterr nationa nationall Jour Jour nal of  of  understanding of people management in small businesses”, I nte E ntr ntre eprene preneur urii al B ehav havii our and R esea searr ch, Vol. Vol. 4. No. 2, pp. 112-28. (Dr Peter Wyer is Director of the Centre for Small Business Development and Research, De Montfortt University, Montfor University, Pol Polhil hilll Ave Avenue, Bedford, MK41 MK 419EA 9EA,, UK. UK. Jane JaneMason is Deputy Dire Director of  the Centre for Small Business Development and Research, De Montfort University, Polhill Avenue, Bedford, MK41 MK 419EA 9EA,, UK.) UK.)

Empowerment in small businesses

193