The Attitudes of British Managers in Small and Medium-Sized Enterprises to the Implementation of the Value Chain Concept
2003; Globeedu Group; Volume: 20; Issue: 4 Linguagem: Inglês
ISSN
2277-5846
Autores Tópico(s)Labor Movements and Unions
ResumoThe concept of the value chain, first developed by Porter (1985) has intrigued managers and researchers alike and given rise to numerous articles and debates within the academic community. This paper examines the applicability of the value chain to SMEs (Small Medium Enterprises). In particular it built upon earlier work by McLarty (2000), slightly modifying and confirming an original model which it is claimed, aids applicability in the small firm sector. It is predicted from a national survey within England in 2002 and substantiates modifications to both primary and secondary activities. The article concludes with suggestions as to how smaller firms can implement the SME Value Chain effectively. 1. Introduction The concept of the value chain has attracted considerable attention from the academic community over many years (Shank, 1989; Dicken 1992; Porter, 1985; O'Sullivan & Geringer, 1993; Lord, 1996; McLarty, 2000). However, lesser attention has been paid by practitioners, many of whom are oblivious to the claims made by their academic 'cousins' that the value chain holds considerable promise as a basic tool for the systematic examination of all the activities a firm performs (Porter, 1985 op.cif). The concept of a chain has developed to demonstrate that there are a series of links, all of which when aggregated, can provide enhanced capability and synergistic benefits for organisations. Dicken (1990) explaining his approach uses the term 'production' chain, this is remarkably similar to Porter's 'Value Chain', in that it identifies a series of activities each of which add value to the sequential planning process. In particular he identifies: - a chain of linked functions - each stage (link) can add value - there is a set of transactions - transactions may be externalised or internalised - such transactions are organised hierarchically Historically, most writers on the value chain have concentrated on relatively large organisations Kanter (1994); Edwards and Samimi (1997); Payne and Holt (2001). This may be because they can more easily identify the discrete stages, whereas in smaller organisations, these stages are internalised and frequently interrelated e.g. inbound logistics, procurement processes and even transformation. Shank (1989) describes this as ...the linked set of value-creating activities all the way from basic raw material sources...through to the ultimate end-use product. This paper examines the application and relevance of the value chain to SMEs (Small & Medium sized enterprises). It builds upon the concepts and model of Porter (1985) and develops work undertaken elsewhere relating to Porter's two dimensions of value-creating activities - primary and support. An alternative model, The SME Value Chain by McLarty (2000), developed to apply more specifically to SMEs, is evaluated and verified through a survey based research process adopted in 2002. 2. Issue Definition This study examines the relevance of the value chain infrastructure with respect to SMEs. The principal components include 1) how SME managers comprehend the value chain paradigm; its image, concepts and relevance. An interesting facet though not developed here would be to examine any differences in comprehension between educated and trained managers and those without formal qualifications. 2) The two major value-creating activities identified by Porter, namely primary and support would benefit from substantiation in respect of their relevance to SMEs. In fact, not only do these require evaluation, there may also be a case for redefinition, substitution or expansion of their components. 3) how all of the activities combine to secure value and create a margin for SMEs, would benefit from closer scrutiny. Would there be determinable advantages in greater adoption of the value chain within the arena? The interrelationships associated with each of the components also requires examination, how they co-exist is a relevant question as is the nature of their interdependencies. …
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