Lecture 6

Question 1

What are some differences between working in a small vs large business?

Answer 1

Large: 
- pay more
- higher market power
- better qualified workforce
- high performance standards
- provide more formal training
- safer place to work
Small:
- employ lower pay groups
- younger businesses
- less 'safe' working conditions
- employees said to trust managers more
- employees said to be 'happier' in general

Question 2

Why do some small businesses not provide formal training?

Answer 2

• unaware of the benefits of training
• high direct and indirect costs (opportunity cost)
• risk of poaching employees
• entrepreneurs have a short term planning horizon

Question 3

Benefits of SME’s and graduates:

Answer 3

• high skilled workforce
• growth
• high productivity
• hands on experience
• voice in an organisation
• flexible in hours and style
• more personal working relationships

Question 4

What are the benefits of working for a small firm?

Answer 4

• facilitate close working relationships
• good people management
• greater flexibility
• lower levels of conflict

Question 5

What are the drawbacks of working in a small firm?

Answer 5

• conflict is more non overt so shown through absenteeism and turnover
• poorer working conditions
• dependent on the sector

Question 6

What are the 4 different competitive positions?

Answer 6

1) dependent: small business that exist to serve the interest of larger businesses
2) dominated: small business that competes with larger business through intense exploration of capital
3) niche: a business operating in a safe ‘niche’ market, unlikely to be invaded by larger businesses
4) innovative: small business that develops new products, services or ideas but vulnerable to take-over once products seen to have potential