4. RESEARCH METHODOLOGY
4.3 Descriptive summary
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overall 103 interviews, i.e. 103 completely filled out, valid responses. The data gathered includes the turnovers for 2014. Caused by the German tax system, which gives the companies typically a two- years time frame to establish and finalise their return of tax applications. From this point of view, the data is still relatively up-to-date; especially as there is no more current data available.
Additionally and even more important, the focus of the research is set on the development of the companies by testing the period of growth during a three year time frame, namely from 2012 to 2014. In this regard the tendencies and general assumptions are about to be tested.
Following Chang, the questionnaire and the setting was established in a way that allowed to separate the independent from the dependent variables (Chang et al., 2010: pp.178-182) in order to avoid common-method variance. Concrete, the questions for the number of employees and the development of the turnover were separated from each other. In all the cases the questionnaires were filled in as described above, during the attendance of the author. By this, as another advantage was generated: a correct reliable process was assured.
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Figure 22: Number of SMEs with positive growth in %.
Source: own elaboration
Figure 23: Number of SMEs with negative growth in %.
Source: own elaboration
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Figure 24: SMEs with positive growth in %.
Source: own elaboration
Figure 25: SMEs with negative growth in %.
Source: own elaboration
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Figure 26: Sales in million EUR for SMEs with positive and negative growth.
Source: own elaboration
Figure 27: Distribution of the Company Age in 2015.
Source: own elaboration
The latter figures show the structure of the companies based on their answers. Some aspects shall be highlighted:
• The differences of the structure between companies with negative growth and positive growth do differ from each other in almost all respects.
• The levels of the turnover sales of those companies with negative growth are lower than the ones for positive growth.
• The older companies are more affected by a negative growth than younger companies are.
In the questionnaires, the respondents evaluated several statements in six different categories using a 5-point Likert scale from 1 “fully disagree” or, respectively, “insufficient” and 5 “completely agree” or, respectively “fully satisfactory”. The following table shows these categories and the given statements to which the respondents had to reply to:
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Category Statement
1. Dynamic Capability
The company explores the business environment to the assessment of:
a. Relevant new technologies
b. Changed consumption trends and customer needs c. New markets to conquer
d. Potential business models to max out chances e. Effectiveness of company function due to documented processes within the units
2. Intellectual Capital a. Level of employees and their competencies b. Training hours above average
c. Work of employees towards product and process development
3. Available financial Resources Effect of the Availability of financial resources during the last 3 years on the firm’s development
4. Management Attitude towards Growth
a. Importance of growth
b. Sales growths as main criteria for decisions c. Dependence of survivability on sales growth 5. Dynamic of the Environment a. Change of marketing strategy in order to keep up
b. Frequency of production technologies within the branch
c. Transparency of competitors and their activities 6. International Level Whether or not the company was active outside of its
own country
Table 18: Categories and Statements of the questionnaire (2015) Source: own elaboration.
In the first subject „Dynamic Capabilities“, the respondents were asked whether or not their companies explore the business environment by analyzing and committing resources regarding five different items with a question for each. The table and the figures below show the distribution
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of answers (in percentage of total) to each statement given and the mean value. Additionally they are divided according to the economic growth of the SMEs, i.e. negative or positive growth.
Table 19: Overview Distribution of answers to: Dynamic Capabilities.
Source: own elaboration
Figure 28: Distribution of answers to: Dynamic Capabilities – Relevant new technologies.
Source: own elaboration
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Figure 29: Distribution of answers to: Dynamic Capabilities – Changed consumption trends and customer needs.
Source: own elaboration
Figure 30: Distribution of answers to: Dynamic Capabilities – New markets to conquer.
Source: own elaboration
Figure 31: Distribution of answers to: Dynamic Capabilities - Potential business models to max out chances.
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Figure 32: Distribution of answers to: Dynamic Capabilities - Effectiveness of company function due to documented processes within the units.
Source: own elaboration
Figure 33: Overall distribution of answers to the 5-question category Dynamic Capabilities.
Source: own elaboration
The next subject “Intellectual Capital” contains 3 statements concerning the quality of the company’s employees and their work. Again, the table and figures show the distribution of answers to each of the three given items, divided by negative and positive growing SMEs.
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Table 20: Overview Distribution of answers to: Intellectual Capital.
Source: own elaboration
Figure 34: Distribution of answers to: Intellectual Capital - Level of employees and their competencies.
Source: own elaboration
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Figure 35: Distribution of answers to: Intellectual Capital - Training hours above average.
Source: own elaboration
Figure 36: Distribution of answers to: Intellectual Capital - Work of employees towards product and process development.
Source: own elaboration
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Figure 37: Overall distribution of answers to the 3-question category Intellectual Capital.
Source: own elaboration
In the section “Available Financial Resources” the respondents were asked to evaluate the effect of the availability of financial resources during the last three years on the firm’s development. The table and the two figures show the distribution of answers, divided into negative and positive growing SMEs.
Table 21: Overview Distribution of answers to: Available Financial Resources.
Source: own elaboration
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Figure 38: Distribution of answers to: Available Financial Resources - Effect of the Availability of financial resources during the last 3 years on the firm’s development.
Source: own elaboration
The fourth category “Management Attitude towards Growth” includes three statements about the importance of sales growth towards different factors. The table and the figures show the distribution of answers, divided into negative and positive growing SMEs.
Table 22: Overview Distribution of answers to: Management Attitude towards Growth.
Source: own elaboration
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Figure 39: Distribution of answers to: Management Attitude towards Growth - Importance of growth.
Source: own elaboration
Figure 40: Distribution of answers to: Management Attitude towards Growth - Sales growth as main criteria for decisions.
Source: own elaboration
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Figure 41: Distribution of answers to: Management Attitude towards Growth - Dependence of survivability on sales growth.
Source: own elaboration
Figure 42: Overall distribution of answers to the 3-question category Management Attitude towards Growth.
Source: own elaboration
Frequency of commercial operations and activities of competitors are the topic of the category
“Dynamic of the Environment”. The table and figures below show the distribution of answers (in percentage of total) to each statement given. Additionally they are divided according to the economic growth of the SMEs.
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Table 23: Overview Distribution of answers to: Dynamic of the Environment.
Source: own elaboration
Figure 43: Distribution of answers to: Dynamic of the Environment - Change of marketing strategy in order to keep up.
Source: own elaboration
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Figure 44: Distribution of answers to: Dynamic of the Environment - Frequency of production technologies within the branch.
Source: own elaboration
Figure 45: Distribution of answers to: Dynamic of the Environment - Transparency of competitors and their activities.
Source: own elaboration
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Figure 46: Overall distribution of answers to the 3-question category Dynamic of the Environment.
Source: own elaboration
In the last part of the questionnaire the respondents had to state, if their company was active in another country during the last three years. If so, they were asked to give the number of countries the company had business in. The table and figures show how many of the companies were involved in foreign operations and the second figure shows the amount of countries the SMEs were active in.
Table 24: Overview Distribution of answers to: International Level.
Source: own elaboration
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Figure 47: Distribution of answers to: International level - Whether or not the company was active outside of its own country.
Source: own elaboration
Figure 48: Distribution of answers to: International level – Number of countries the company was active in during the last three years.
Source: own elaboration
Finally table 25 depicts the mean, variances and standard derivation for each of the underlying parts of the questionnaire which correlate with the established Hypotheses. Again, the differentiation has been made between positive and negative growth.
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Mean Variance Standard
Derivation Dynamic Capabilities SMEs with pos. growth 3,1 1,5 1,2
SMEs with neg. growth 2,7 2 1,4
Intellectual Capital SMEs with pos. growth 3,1 1,1 1
SMEs with neg. growth 2,9 1,6 1,3
Available financial Resources
SMEs with pos. growth 3,3 1,9 1,4
SMEs with neg. growth 2,9 1,6 1,2
Management Attitude towards Growth
SMEs with pos. growth 2,9 1,8 1,3
SMEs with neg. growth 2,6 1,6 1,3
Dynamic of the Environment
SMEs with pos. growth 4 0,8 0,9
SMEs with neg. growth 2,2 0,7 0,8
International Level (if yes)
SMEs with pos. growth 7,3 12,8 3,5
SMEs with neg. growth 3,7 7,4 2,6
Table 25: Mean, variance and standard derivation.
Source: own elaboration
The differences between the results for the companies with a positive and negative growth are obvious. However, there is quite a difference among the categories. The differences between positive and negative growth of companies and their economic activities on an international level are worth being highlighted: Companies with a negative growth show significantly more often a lower level of activities on an international level. This follows the scientific mainstream, that SME with international activities yield better results as an ongoing trend for SME on a European level since many years (e.g. European Commission, 2010).
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