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I write three essays on micro and small firms in Indonesia. The first essay discusses the effects of the education of entrepreneurs-the managers cum owners of micro and small firms-on the firm performance and the entrepreneurs' earnings. I find some evidence that, on average, better educated entrepreneurs earn more hourly, monthly, and annually, though the return to education differs by sector. I also find female entrepreneurs benefit more from their education, so do entrepreneurs in urban areas. The second essay studies whether social health insurance in Indonesia, Askeskin, that owners of micro and small firms have access to help the firms cope with family hardships experienced by the households. I find some evidence of Askeskin reduces the adverse effects of deaths in the family in the previous year, outpatient care, and traffic accidents on net profits; Askeskin also protects total assets against owners' need of outpatient care. The third essay analyses the effects of an increase in real wage rates on small farms' investment in tractors, machines, equipment, and irrigation system, i.e., whether an increase in wages induces farmers to substitute labour for capital. I find some evidence that higher real minimum wages induce greater use of tractors on small farms; higher real agricultural wages encourage smallholders invest more in vehicles. I also find relatively large farms use more tractors as real wages (all types) increase; they also invest more in vehicles when farm labour become more expensive. By contrast, relatively small farms invest more in irrigation systems in response to higher real wages and more in farm equipment when real agricultural wages increase.

Globalisation has had a significant impact on the world and changed the landscape of manufacturing. Owing to this, UK manufacturing has to face challenges from both advanced economies, such as France, Germany, Japan and the US, as well as developing economies, such as Brazil, Russia, India and China (BRIC). To respond to this challenge, UK manufacturing needs to differentiate itself by shifting its focus towards high value manufacturing (HVM) as it has strong potential to bring sustainable growth to the UK economy. Technological advancement in the cyberphysical age enables companies to connect and create supply chains (SCs) in ways that were not previously possible. This presents an opportunity for small and medium sized enterprises (SMEs) to participate and increase their participation in larger customers’ SCs. However, this requires SMEs to have the capability to interact effectively with their larger customers. This research explores the relationship between interaction capabilities, SMEs’ participation and firm performance. Interaction capabilities are a relatively new concept in an SC context, with existing studies more focused on the marketing domain. There are four types of interaction capabilities: human, managerial systems, technological and cultural. To examine these relationships, three sequential phases were involved. First, a reliable and valid scale for measuring interaction capabilities was developed. After developing the scale, data were collected by surveying 181 UK HVM SMEs. The survey data, then, were validated by two in-depth case studies. Of the four interaction capabilities, the results suggest SMEs have human interaction capability (HIC) in place as it significantly improves their firm performance. Additionally, acquiring HIC would support the development of other capabilities such as technological interaction capability (TIC) and cultural interaction capability (CIC). This research also indicates that SMEs should consider developing capabilities to support managerial interaction capability (MIC) if they wish to grow their business with larger customers and in turn improve their business performance.

Servitization has been a recognized business phenomenon since the late 1980s to innovate a business’s capabilities and processes to create value for their customer through service. Recent technological advances, particularly in the capabilities being developed by the Internet of Things (IoT) could be an enabler for a servitzation transition at an organization. Servitization, enabled by the Internet of Things (IoT), has not been considered in the context of Small to Medium Sized Enterprises (SMEs). Due to the traits of SMEs, the potential opportunities from effectively servitizing their business models and the accessibility and affordability of IoT sensors, equipment and tools, there is a gap to be explored. This research provides an understanding of the many challenges SMEs face to remain competitive. Additionally, the research develops a framework that can help to overcome some of these challenges through the utilization of a Servitization business model and IoT technology and capability. The investigation and development of IoT-enabled Servitization for SMEs could potentially lead to new knowledge and innovation. Initially, main traits of SMEs were identified and then aspects of IoT and servitization were ascertained to find those that best align with the SME unique traits. From this understanding, a framework was developed that will allow Small to Medium sized Enterprises to utilise the technology and capabilities from the IoT in order to develop servitization within their business. This framework was then further developed through a longitudinal case study with an SME and validated by a range of industry stakeholders. The outcome resulted in a conceptual framework, based on academic literature, evolved in a real-world case study, and validated by professionals and stakeholders. This validation was conducted through the dissemination of the material on a professional program MSc module, presentation of the research at international conferences, and an event held with regional SMEs to gain insight on the final version of the framework. The framework can be used by SMEs or those consulting SMEs to help them develop strategy that creates value added services in their business that are enabled by the IoT.

Researchers have identified a wide range of factors that affect organisational creativity. The leadership behaviour of top managers is one of the most important. However, few studies have empirically examined the relationship between the leadership behaviour of these leaders and creativity at the organisational level. In this study, a style of leadership labelled “entrepreneurial” is considered in the context of Chinese SMEs, by considering its potential to create an environment in which creative activities can flourish. The entrepreneurial leader is central to the enterprise, creating visionary scenarios and facilitating a group of capable members to enact their vision, further fostering organisational creativity. As organisational creativity is important for business success, there is a significant need for research into the impact of entrepreneurial leadership. The study identifies gaps in the literature. First, a number of studies have contributed significant insights into the antecedents of employee creative behaviours and performance, but predominantly concentrate on the level of the individual employee. Hence, an investigation into the antecedents of organisational creativity beyond this level is needed. Second, the field of entrepreneurial leadership remains in the embryonic stages of conceptual and theoretical development. Considering leadership as one of the antecedents of organisational creativity, existing research mainly focuses on the mainstreams of leadership style as the determinant. Third, SMEs, as the major incubator of entrepreneurial leadership, provide a valuable research environment as they foster organisational creativity. Fourth, there is a dearth of literature on the mechanisms through which creativity may be enhanced in Chinese SMEs. Therefore, further research has a valuable contribution to make to the field. More specifically, this dissertation considers the following three research questions: RQ1: What are the characteristics exhibited by the entrepreneurial leaders to facilitate creativity in Chinese SMEs? RQ2: Do entrepreneurial leader’s behaviours enhance SME’s creativity performance? RQ3: How do these entrepreneurial leadership behaviours affect an SME’s creativity, which in turns stimulates their firm performance? Based on these research questions, the researcher further set a range of specific objectives: 1. To develop a model of entrepreneurial leadership in SMEs; 2. To understand entrepreneurial leaders’ background and behavioural characteristics as well as their firms’ creative capabilities and performance within the targeted sample in Chinese SME context; 3. To identify the mechanisms through which entrepreneurial leadership influences SMEs’ creativity; 4. To investigate the relationship between entrepreneurial leadership and Chinese SMEs’ creativity as well as their firm performance. To move forward with these aims, a theoretical model of entrepreneurial leadership is developed and the manner in which the entrepreneurial leadership styles of top managers directly and indirectly affect creativity within SMEs is investigated. A mixed methods research approach is applied, including a combination of a qualitative study (case study) and a quantitative study (questionnaire survey). In the qualitative study, case studies of four firms (in Zhejiang) were conducted and interviews were carried out with the firms’ top leaders and managers. The qualitative analysis creates an item pool for the scale development of entrepreneurial leadership in SMEs context. In the quantitative study, a pilot study was first conducted with a sample of 274 employees from various industries. Afterwards the scale of entrepreneurial leadership in SMEs context was validated and finalised. The sample for the final questionnaire survey was 139 Chinese SMEs in Zhejiang Province in various industries. The top leader and two middle managers from each firm were invited to participate in the surveys. Therefore, two survey questionnaires were used to collect data (one was designed for the top leaders and the other was for the managers). The findings support a direct and positive link between a style of leadership that has been labeled as “entrepreneurial” and organisational creativity. They also indicate that entrepreneurial leadership has significant and positive relations with empowerment, organisation-based psychological ownership, and employee’s entrepreneurial behaviour. Empowerment and employee’s entrepreneurial behaviour have been found to have a significant and positive relationship with organisational creativity, but organisation-based psychological ownership has an insignificant relation with organisational creativity. Moreover, the impact of entrepreneurial leadership on empowerment in the context of an SME is moderated by the level of trust such that the relationship will be stronger when trust is high rather than low. Furthermore, the findings also support the positive relationship between organisational creativity of an SME its performance. Three contributions are made to the leadership literature. First, successful business performance in the 21st century environment needs a new form of leadership, and entrepreneurial leadership may be able to provide it. Second, by examining empowerment, organisation-based psychological ownership, and employee’s entrepreneurial behaviour as mediating variables, the study enhances understanding of the mechanisms through which entrepreneurial leadership promotes organisational creativity as well as firm performance. Third, this study contributes to the understanding of the applicability of leadership in the Chinese context, helping advance entrepreneurial leadership research in emerging market economies. The findings may help entrepreneurial leaders to recognise the influence of their unique cultural heritage and organisational context on their leadership styles. This study discusses the implications of the findings and identifies possible directions for future research.

The study examines the role of government venture funding in facilitating entrepreneurship and innovation. In particular, the study integrates financial and behavioural perspectives in a unified framework to analyse the determinants and outcomes of innovation investments designed to help small firms commercialise their research and development activities. On the one hand, it draws upon real options reasoning theory to understand the effects of various resource allocation strategies on investment yield and firm performance. On the other hand, it uses signalling theory and the attention- based view to examine which individual-, project- and firm-level characteristics affect early- and late- stage funding allocation decisions, and whether these signals are also accurate predictors of investment yield and firm performance. To investigate government investment patterns, 367 projects from 275 firms that participated in the Small Business Innovation Research (SBIR) programme administered by the National Health Institute in the U.S. were analysed over a seven-year period from 2006 to 2012 using a combination of statistical and econometric techniques. First, the study finds that the formal real options reasoning (ROR) structure evident in the composition and execution of the government venture funding programme is only intuitively underpinned by the real options logic of decision-making. The results reveal that high initial funding commitment and continuation of government venture funding have a diminishing effect on return on investment, whereas consistent matching of funding decisions in line with ROR allows to extract value from staged investments. Second, drawing on signalling theory and attention-based view helps uncover discrepancies between prescribed and actual investment behaviour. Third, to benefit from options-like investments, firms require different combinations of skills and capabilities depending on their experience and the target performance outcome. In sum, the study adds to the empirical body of literature analysing the tension between economic logic of efficient resource allocation and behavioural and cognitive effects on rational sense- making. The analysis delineates boundary conditions of real options reasoning in the context of government venture funding, which provides important implications for strategic management theory and research policy.

Graduate recruitment in small and medium sized enterprises (SMEs) is largely neglected, overshadowed by larger enterprises more traditionally associated with graduate employment. This thesis addresses this oversight by exploring graduate employment in small firms located in the West Midlands, with a specific focus on small Business and Professional Services (BPS). The thesis examines whether attitudinal barriers deterring graduates from small firm employment, and small firm employers from recruiting graduate employees, as summarised by the concept of mutual unattractiveness, is supported by the experiences of graduates currently employed in smaller firms, and by the experiences of owner-managers that have employed them. The research specifically explores employer interpretations of graduate contributions and skills deficiencies, and graduate interpretations of training delivery and developmental practices. A qualitative approach enables the study to gain a deeper understanding of manager-graduate relations in small firms, while supplementary interviews with careers service, large firm and intermediary organisation representatives generates a multi-perspective approach appreciative of wider regional graduate employment access and engagement. The study finds that whilst graduate and employer experiences in many ways reinforce factors that deter both parties from engaging in such employment, their experience also demonstrates the positive rewards ensuing for both parties. This thesis illustrates how small firm graduate employment is complex and informed by comparative decisions. It also shows how recruitment decisions concerning small firm graduate employment require a more informed approach such that expectations may be managed accordingly.