Collaborating Small Business to Overcome Financial, Social and Political Constraints

Small businesses have a hard time competing due to financial, social, and political constraints on their resources. A paper by Evans (2013) explores the political dynamics and process of institutional change that underlines policy approaches that focus on modernizing small firms in Portugal. Their comparative-historical analysis helps show that successful industrial upgrading relies on intense and sustained political action led by leadership in an effort to develop benchmarks and proper implementation of financial strategy. 

Small businesses often lack resources to compete in a market dominated by better financed international companies. Payroll, financing, business, systems, etc… were not always updated appropriately. Small businesses also regularly failed to meet inappropriate legislation focused toward larger organizations leaving them unable to grow or develop.  

Other problems small business face is the legal and political structure of a country that focuses more heavily on larger industries. This structure can make it difficult for small businesses to meet regulations, export quantities, and other minimum standards. The lack of understanding of the needs of small business can have a long-term impact on the success of new entrepreneurial development. 

Small business can work in collaboration to build a stronger political voice that can impact the legal frameworks of a nation and encourage greater fairness in development. They may also work together to share resources such as payroll, financing, legal representation, etc… Sharing resources narrowed economies of scale advantages found in larger businesses. 

The study helps highlight how local and national governments must work together to ensure fresh development of industry innovation, new businesses, and stronger economic competitiveness. Small businesses will need to overcome their individualistic approaches and rivalry oriented strategies to create stronger collaboration that leads to social, economic and political transformation.  Leaders can encourage changes within the structure to ensure greater concern and competitiveness of small businesses development within their sectors that has an impact on economic development.  

Evans, A. (2013). Building institutional capacity: from pervasive individualism to sustained coordination in small firm sectors. Business & Politics, 15 (2).

Joseph Schumpeter’s Concept of Entrepreneurship and Combinations

Joseph Schumpeter was an outstanding economist that immigrated to the U.S. Many of his works were not mathematical like other economists but he did delve into the economy as a complete economic system. His work has led to new ways of thinking about the economy as a system and offered a greater understanding of creative destruction and entrepreneurship as part of the economic model. 

He believed that entrepreneurship is an important part of the economic system. These difficult to account for innovations result from companies that have the ability to research important product improvements.  Innovative improvements are a force that changes the market and allows some companies to earn higher levels of revenue for a time until their products are copied by others. The innovative process is needed to maintain new products and a market leading position. 

He outlined his theory in the book Theory of Economic Development (1911) and maintained the fundamentals throughout his life. He believed development is not possible without new products and services. He outlined his concept of innovation through a idea called combination that includes (pg. 66):

1) The introduction of a new good, not yet familiar or of a new quality of good.

2) The introduction of a new method of production.

3) The opening of a new market.

4) The conquest of a new source of supply of raw materials.

5) The carrying out of a new organization of any industry, like the creation of a monopoly position or the breaking up of a monopoly position.

Those creating the combinations are called entrepreneurs. They can be within a company or have their own business. They take information, connect it to new uses, and develop products. Economic development comes from this process of finding new sources of knowledge and putting them to productive use. 

As markets change and adjust there are cycles of destruction and creation. War, famine, political forces, scarcity and much more cause the constant need for change to seek a system in equilibrium. Large adjustments can cause pain but can also put a system on a higher plane of existence. Without pressure to change, few things will develop and the economy will become stagnant.

Schumpeter, J.A. (1934). The theory of economic development. Oxford University Press, New

York.

Call for Papers: International Journal of Management and Sustainability (IJMS)

The journal focuses on the following topics: corporate governance, human resource management, strategic management, entrepreneurship, marketing, e-business, services, information technology management, production & operations management, financial management, decision analysis, management research methods and managerial economics,  environmental sustainability, corporate social responsibility, economic sustainability and any disciplines concerning the interaction between management and enterprise sustainable development. It seeks to provide a forum for debates on practical and policy implications to sustainable development. This journal also encourages studies on solutions to improve corporate performance towards sustainability.

More Information

Duncan Hines, Bisquick, and Trains

Dr. Andree Swanson, EdD

While attending a conference in Bowling Green, Kentucky, my husband and I had the opportunity to visit a lovely train museum.  The Historic Rail Park highlights the L&N line (Louisville and Nashville Line) that ran from… you got it… Louisville, Kentucky to Nashville, Tennessee.

Historic Rail Park:

According to the website, you can see…  “Step back in time to the golden era of railroad passenger service as a Tour Guide takes you behind the scenes of a Railway Post Office Car, Dining Car, Sleeper Car and Office Car, with special occasion options to see the interior of a diesel locomotive, a rare WWII Unit Hospital car, a Caboose and a rare 3-section Segregation rail car”.  Now, my husband and I have been to several train and transportation museums, to include the United States Army Transportation museum at Fort Eustis, Virginia.  You always get to see the rail cars in the yard, look in the window, but that was about it.  At the Historic Rail Park, you can actually go in the post office, dining, sleeper, and office car.

The volunteer tour guide begins to explain how the cooks on the train were trying to come up with something where they could make biscuits, cakes, etc. all from the same batch of ingredients.  He said that the cooks on the train concocted

"Biscuit...The word derives from the Latin words "bis" (twice) plus "coctus" (cooked).  In England, a biscuit is what Americans usually call a cracker or cookie. The American meaning for biscuit was first noted by John Palmer in his Journal of Travels in the United States of North America, and in Lower Canada, (1818), and by 1828, Webster defined the confection as "a composition of flour and butter, made and baked in private families."  In general, usage such puffy leavened little breads were called "soda biscuits" or "baking-soda biscuits," in contrast to the unleavened cracker type.... Recipes for soda biscuits are found in every nineteenth-century cookbook, especially with reference to the cookery of the South... The South is also the home of the beaten biscuit, which was first mentioned in 1853...

In 1930 General Mills began selling a packaged quick biscuit mix called Bisquick that was a great success and spawned many imitators."

---The Encyclopedia of American Food and Drink, John F. Mariani [Lebhar-Friedman:New York] 1999 (page 29)

Duncan Hines was from Bowling Green too

Duncan Hines was a travelling salesman for years, riding the rails, and writing about restaurants along the way.  “He kept meticulous notes on which establishments fed him well or provided him with a good night's sleep, and wrote and self-published popular travel guides, offering readers his tasteful advice on roadside diners and hotels.  Hines' published his first cookbook in 1939, and with annual updates, his guidebooks and cookbooks made him famous.” (History Company)

If I heard the volunteer guide correctly, he was behind the Biscquick brand, but like all good things.  Bisquick transitioned from Duncan Hines  

“In 1947 he was approached by an entrepreneur, Roy H. Park, who wanted to put Hines' well-respected name on kitchen products from pickles to appliances. Their company, Hines-Park Foods, made both men millionaires, and the Duncan Hines brand name was sold to Procter & Gamble. Hines died in 1959, and his guidebooks were discontinued after 1962. The cookbooks are still in print, but to modern diners, Hines is just a brand of cake mix (now owned by Pinnacle Foods). “ (History Company)

References

http://historicrailpark.com/

http://www.historycompany.com/productdetails.php?p=199&PHPSESSID=c8dbc59ed7fa40b650d905620f3b4b59