Business Planning in Small Firms

The planning school argues that systematic and formal business planning is crucial for the survival and development of small firms.

The study suggests a dynamic approach that combines planning, learning, and doing, allowing for basic planning while simultaneously engaging in other activities.

The study indicates that an absence of business planning structures can limit the return on business planning in contexts with high uncertainty.

<p>Business planning is less beneficial for performance in cultures with high uncertainty avoidance compared to those with lower uncertainty avoidance.</p> Signup and view all the answers

<p>The S-curve hypothesis indicates that performance initially declines with increased internationalization, rises at moderate levels, and then declines again at very high levels.</p> Signup and view all the answers

<p>Three advantages include scale and synergy benefits, risk diversification, and enhanced market power over suppliers and customers.</p> Signup and view all the answers

<p>The study found that both the quality of written business plans and the sophistication of business planning activities positively affect performance.</p> Signup and view all the answers

<p>Contingencies like uncertainty, limited prior information, and lack of formal planning procedures can negatively impact the returns on business planning.</p> Signup and view all the answers

<p>The 'liability of foreignness' refers to the disadvantages that foreign firms face in a host country compared to local firms, due to factors like market unfamiliarity.</p> Signup and view all the answers

<p>The study recommends that practitioners should apply both formal and sophisticated planning approaches and be mindful of frequent shortcomings in business planning.</p> Signup and view all the answers

<p>Coordination costs increase as companies face a more complex network of subsidiaries, leading to more internal transactions and coordination issues.</p> Signup and view all the answers

<p>As real-world experiences are gained, the sophistication of business planning efforts can be increased, suggesting a feedback loop between action and planning.</p> Signup and view all the answers

<p>The three phases are: the initial phase with declining performance due to high internationalization costs, the intermediate phase with rising performance from experience and scale, and the maturity phase where coordination costs again reduce performance.</p> Signup and view all the answers

<p>Intangible assets like technology and brand names provide competitive advantages and require significant investment, making it efficient to leverage them across various markets.</p> Signup and view all the answers

<p>During the initial phase, the costs associated with internationalization outweigh the benefits, leading to declining performance.</p> Signup and view all the answers

<p>Information asymmetry refers to the situation where one party has more or better information than the other, leading to challenges in coordination as companies diversify geographically.</p> Signup and view all the answers

<p>Lu and Beamish argue that intangible assets positively moderate the exploitation benefits of a firm's internationalization strategy.</p> Signup and view all the answers

<p>Three advantages include access to new markets, risk diversification, and enhanced brand recognition.</p> Signup and view all the answers

<p>The 'liability of foreignness' refers to the inherent disadvantages that foreign firms experience in a host country, such as unfamiliarity with local markets and regulations.</p> Signup and view all the answers

<p>Coordination costs increase due to the complexity of managing operations across different geographic locations, which may lead to communication and logistical challenges.</p> Signup and view all the answers

<p>The three phases are initial growth, exponential growth, and saturation, where firms initially experience slow performance gains, followed by rapid growth, and eventually diminishing returns.</p> Signup and view all the answers

<p>Intangible assets are crucial as they provide firms with competitive advantages, enabling them to gain higher returns from foreign direct investments.</p> Signup and view all the answers

<p>Intangible assets positively influence the slope of the S-curve, resulting in higher performance gains during the growth phases of internationalization.</p> Signup and view all the answers

<p>They utilized empirical data from various firms engaged in foreign direct investment to analyze the relationship between international diversification and performance.</p> Signup and view all the answers

<p>The two performance measures used were financial performance metrics, such as return on investment (ROI), and operational performance metrics like market share.</p> Signup and view all the answers

<p>Cultural distance can create information gaps for investors, affecting their understanding and management of resources, which influences the choice between greenfield investments and acquisitions.</p> Signup and view all the answers

<p>General international experience refers to knowledge not tied to any specific country, whereas experience in the host country encompasses knowledge specifically about the local environment.</p> Signup and view all the answers

<p>The hypothesis suggests that firms with abundant knowledge-based resources are more likely to choose greenfield investments as they can better leverage and protect these resources in a new entity.</p> Signup and view all the answers

<p>Cultural distance may hinder the effective use of knowledge-based resources, impacting the firm's confidence in opting for greenfield investments.</p> Signup and view all the answers

<p>A meta-analysis is a statistical method that integrates results from multiple studies, enhancing the robustness of findings and providing clearer insights into the relationship between resources and establishment choices.</p> Signup and view all the answers

<p>The primary conclusion is that firms should align their strategic decisions, including establishment mode, with their unique resource bases to achieve sustainable competitive advantages.</p> Signup and view all the answers

<p>Contradictions in existing literature regarding resource types lead to unclear empirical findings, complicating the understanding of how resources affect establishment mode choices.</p> Signup and view all the answers

<p>The two main categories are knowledge-based resources and experience-based resources; knowledge-based resources include technological and marketing know-how, while experience-based resources encompass general international experience and specific host country experience.</p> Signup and view all the answers

<p>Bounded self-interest refers to the limitation on the pursuit of utility maximization imposed by norms of fairness and reciprocity.</p> Signup and view all the answers

<p>Reciprocity implies that individuals consider the fairness of interactions and relationships, rather than solely focusing on their own utility.</p> Signup and view all the answers

<p>The three theories include classical economic theory, game theory, and the principal-agent theory.</p> Signup and view all the answers

<p>The three dimensions of fairness are distributive fairness, procedural fairness, and interactional fairness.</p> Signup and view all the answers

<p>Akerlof's 'gift exchange' theory posits that employers provide benefits to employees, who reciprocate with increased effort and loyalty.</p> Signup and view all the answers

<p>Procedural injustice may cause suppliers to feel undervalued, leading to reduced cooperation or increased hostility.</p> Signup and view all the answers

<p>Intergenerational reciprocity refers to the expectation that fairness extends across generations, impacting stakeholders' trust and willingness to engage.</p> Signup and view all the answers

<p>The authors suggest that companies enhance their own value creation by distributing resources and benefits among stakeholders.</p> Signup and view all the answers

<p>High self-monitors strive to demonstrate their competence by completing transactions independently, even after making mistakes.</p> Signup and view all the answers

<p>Managers should prioritize resolving the problem promptly and allowing the customer to complete the transaction.</p> Signup and view all the answers

<p>Studies often focus on specific services like movie tickets or groceries, limiting their generalizability to other SST contexts.</p> Signup and view all the answers

<p>'Switching intentions' refer to a customer's likelihood to move from a self-service to a full-service option, while 'leaving intentions' indicate the chance of a customer entirely leaving the provider.</p> Signup and view all the answers

<p>The social context impacts the customer's experience and highlights the need for a thoughtful SST error recovery approach.</p> Signup and view all the answers

<p>Intangible and financial resources are the dominant factors explaining the type of diversification a firm chooses.</p> Signup and view all the answers

<p>The findings confirm that intangible assets offer competitive advantages for entering related markets.</p> Signup and view all the answers

<p>Future research could explore other services with higher risks or confidentiality and examine employee and customer characteristics affecting error recovery preferences.</p> Signup and view all the answers