Small Business Growth

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Methodology

The methodology for this research has been determined and structured according to an adapted version of Saunders, Lewis and Hornhill‟s (2007) “research onion” (Figure 3). The research onion strategically leads the researcher through six different stages and is an aid for making the right decision concerning research method and data collection. A complet-ed version of the research onion for this research‟s specific purposes can be seen below and will be elaborated upon in this chapter.

Research Approach & Method

The following section will elaborate on the research approach and strategy including the choices for a qualitative vs. quantitative model, the research method and sampling as well as reliability and validity issues within our study.

Research Approach

Research approaches can be either deductive, which refers to the process of applying theo-ry to a certain research setting, or inductive, which describes the generation of theory through data collection (Wilson, 2010). More specifically, Hyde (2000) defines induction as “a theory building process, starting with observations of specific instances, and seeking to establish generalization about the phenomenon under investigation” (p. 83). There have been many discussions about whether research can actually be called strictly deductive or inductive. Inductive research, which is said to develop theory, often only results in generat-ing fractions of a theory, which requires further research in the future (Bryman & Bell, 2007). Therefore it has been suggested to think of deduction and induction as tendencies “rather than as a hard-and-fast distinction” (Bryman & Bell, 2007, p. 15). In this particular research we chose to follow an inductive approach, since we felt that the topic „growth of family businesses in a niche market‟ has not been covered sufficiently by literature to date. By combining literature findings about family businesses, niche markets and growth to-gether with our primary data collection, we aimed to generate a theory that would present growth and survival strategies for family businesses operating in a niche market and there-with solve our research problem.

Research Method

The research strategy applied in this thesis was qualitative, in which the emphasis is placed on words rather than quantifications, as opposed to quantitative research which usually en-tails a deductive approach, incorporates principles of the natural sciences and looks at so-cial reality as an external reality (Bryman & Bell, 2007). The precedent attributes of quanti-tative research were not applicable to this study, as it was an inductive approach, rejected the scientific model of positivism and viewed reality as the individual‟s creation, as also dis-cussed in the research philosophy section (Bryman & Bell, 2007). Qualitative research has been designed to make researchers understand the contexts, both cultural and social, in which people live (Myers, 2009). Myers (2009) furthermore describes creating and under-standing a context as one of the benefits of qualitative research, which is best understood by physically talking to people. One of the methods suggested in qualitative research are qualitative interview studies. Weiss (1994) proposes that interview studies can “elicit the process antecedent to an outcome of interest,” (p. 10) as well as its consequences. This re-search method was suitable for the purposes of the study since the process towards family business growth in a niche market could be investigated through qualitative interviewing. According to Weiss (1994), interviews give the researcher access to the information of oth-ers, which cannot otherwise be obtained. Furthermore, interviewing has been chosen due to its flexibility and convenience despite the time-consuming transcription and analysis (Bryman & Bell, 2007).
The sample crowd to interview consisted of family businesses in Canada that have included at least two generations of family members within the management team. These companies had to be currently operating in a niche market or must have started out in a niche market, according to our preferred definition of a niche market by Lasher (1999). The respondents have been chosen through personal contact availability in Canada as well as by searching Canadian family businesses through internet search engines. By visiting the companies‟ websites and reading available press releases, we have researched the companies to ensure that they fit our profile of being a second generation or higher family business operating in a niche market. Consequently the sampling frame, which is a list of all elements in the pop-ulation (Williams, 1997), consisted of personal contacts as well as the search results from the internet.

Research Design

The research design was cross sectional, which describes a design that “entails the collec-tion of data on more than one case […] and at a single point in time in order to collect a body of […] data […]” (Bryman & Bell, 2007, p. 727). The sampling size was limited to eight qualitative interviews due to time and financial restrictions. Additionally, the overall population size was very difficult to determine as a result of being very specific, so a calcu-lation of the most suitable sample size could not be carried out. Weiss (1994) points out that samples for a qualitative interview study are typically small, since each respondent is expected to provide an extensive amount of information, which is why we believed that eight different cases would be a sufficient variety to draw conclusions from which to solve our problem. In order to receive eight responses, initially 20 companies had been contact-ed. After receiving an insufficient number of responses, an additional 20 companies were contacted.
Cross sectional design has been chosen to receive a variation in answers from different kinds of companies at different stages in their business life cycle. Interviews were conduct-ed at a single point in time, nearly simultaneously, one per company. A cross-sectional de-sign has been selected rather than a multiple case study design, because the focus of the re-search project is on producing general findings with little regard to the individual context of the cases, as opposed to emphasizing findings about the unique cases (Bryman & Bell, 2007). Limits to the generalization of this study need to be made, since we worked with a fairly limited sample size.

Data Collection Method

The interview type of choice was semi-structured interviewing, which includes the use of an interview guide with specific questions and topic areas to be covered, but provides greater flexibility within the interview (Bryman & Bell, 2007). Semi-structured interviews can be placed between structured and unstructured interviews and are most commonly used in business research (Myers, 2009). All questions in the interview guide were covered but did not necessarily need to be asked in the same order or asked at all, if already an-swered through a different section of the conversation (Bryman & Bell, 2007). Consequent-ly, the semi -structured interview takes the best of all interview approaches while minimiz-ing the risk of not being able to pursue new lines of enquiry or gathering too much data that is irrelevant to the study (Myers, 2009). We found that conducting the interviews in a conversational style rather than a question and answer style delivered more detailed infor-mation with a greater insight into the individual company consulted. Choosing semi-structured interviews has in actuality complemented the topic of this research study, as more often than not the interviews were conducted with the actual owner of the business, and these owners had a fair amount to say about their business that they either established themselves or had taken over from another generation. By giving the interviewees the free-dom to speak, various additional issues affecting the research problem have come up and will now be incorporated into the study.
The questions included in our interview guide have partly been based on questions used in a study by Parrish et al. (2006), which investigated how mature companies can maintain a niche strategy in order to stay competitive. One of the reasons we chose to use questions from this study was because these questions have already been piloted for us in a successful research study with a related topic. Furthermore, a number of factors we wished to investi-gate were included in their research. In addition to basing our questions on previous re-search, we have also formulated interview questions to further investigate the conclusions taken from our frame of reference, as well as to be able to answer our research questions and therewith solve our initial research problem. After conducting the first few interviews, the interview guide was adjusted in order to be more directly suited to our topic and avoid gathering irrelevant information.

Reliability & Validity Issues

Reliability and validity are mainly concepts concerning the quantitative researcher, however researchers have been discussing their relevance for qualitative studies repeatedly (Bryman Bell, 2007). Reliability refers to the consistency of measures and the issue and whether the measures taken are actually reliable, whereas validity examines if an indicator actually measures the concept that it is supposed to (Bryman & Bell, 2007). Though their relevance has been confirmed, the terms reliability and validity needed to be adjusted for qualitative research. We have chosen LeCompte and Goetz‟s (1982) definition of those concepts and analyzed them in regards to our research situation:
External Reliability is concerned with to what extent a study can be replicated by other re-searchers. Our study is replicable in a sense that the topic for the interview as well as the questions can be re-used even with the same companies if needed, however it must be not-ed that social settings cannot be frozen and the companies would be at a different stages in their lifecycle.
Internal Reliability deals with the consistency between researchers in the study. There have been two members in the research team conducting interviews, however only one at a time per company, while the other one has still been present whenever possible to assure all members of the research study received the same kind and amount of information.
Internal Validity examines whether there is a good match between the interview and the theoretical ideas supposed to be developed. The interview questions and topics have been carefully developed according to the literature review and the derived research questions in order to ensure that all topics would be covered to generate a theory.
Lastly, external validity explores to which extent the findings can be generalized across set-tings. This issue has been dealt with previously discussing the generalizability of the re-search. Again, the external validity issue is critical for this study due to having a small spe-cific sample in a certain area.

Data Collection & Analysis Techniques

The following section describes in detail the process of this study, from contacting the companies, to conducting the interviews and finally transcribing and analyzing the data. In the end of this section some ethical considerations concerning this study will be addressed.

Data Collection

The interview guide for the semi structured interviews can be found in the appendix (p. 50). All companies were sent a short e-mail with the necessary information in order to be informed but not overwhelmed by the project. A sample of the initial contact e-mail can be found in the appendix (p.49). If the e-mails were not answered, follow-up calls or e-mails were sent out after a week to find out whether companies were interested in participating in our study. If requested, a further e-mail with more information as well as sample interview questions was forwarded. After appointments had been made, the interviews were con-ducted by either Skype or voice over IP, whichever was more convenient to the interview-
The advantage of doing the interviews as described was being able to bridge the dis-tance to Canada and manage the time differences, while minimizing the expense of calling. Furthermore, the physical absence of the interviewer provided an advantage in that re-spondents‟ replies were not dramatically affected by the interviewer‟s characteristics (Bry-man & Bell, 2007). In the case of our study, there was no limitation as a result of conduct-ing the interviews by telephone rather than in-person, as the results of our research are to be based on facts rather than an interpretation of the interviewee‟s emotions.

Recording & Transcribing

All interviews have been recorded with both the computer‟s voice recorder and a mobile phone device to avoid errors in recording and in order to have two copies available at all times. The interviews have subsequently been transcribed by using the interview transcript program F4. Heritage (1984) has formulated several reasons for transcribing interviews, of which the following were most relevant to us:
The transcript allows the researcher to carry out a thorough examination of the in-terview as well as a repeated examination.
Having the interview conversation written down counters biased analysis of the in-terview.
Lastly, the data can be re-used easily when transcribed.
While transcribing the interviews we concentrated on only transcribing the portions that were relevant to our study, as recommended by Bryman and Bell (2007).

Data Analysis

To analyze the transcribed interviews, we have used coding as a tool of Grounded Theory. The analysis has been reduced to coding, because a continuing re-examination of the data is temporally not feasible.
During the coding process, data is broken down into component parts and given names or labels (Bryman & Bell, 2007). These components have to be significant in regards to the re-search problem. We commenced by looking at the transcribed interviews and defining cod-ing categories of main concepts that were repeatedly mentioned in the course of the inter-views, or which were answers to the research questions formulated. Subsequently, catego-ries were assigned to those concepts by means of color coding. After having developed consistent codes for the concepts, they were assessed according to their importance and weight to the research study as well as by overlap between interviewees, which eventually led to the newly generated theory solving the research problem. Ryan and Bernard (2000) have suggested six fundamental activities in coding, of which we followed the first five:
Sampling identifies the texts that are to be analyzed, and the basic units of analysis within these texts.
Identifying Themes usually involves the researcher inducing themes from the text it-self. However, themes can also be derived from the literature.
Building codebooks involves organizing lists of codes (often in hierarchies) and their definitions
Marking texts involves assigning of codes to units of text.
Constructing Models involves identifying how the themes, concepts, beliefs and be-haviours are linked to each other.
The last step, testing models, was not applicable to us, as our developed theory or model was not tested on a different set of data afterwards due to a lack of resources.
The findings and analysis will be presented as one combined chapter, since the findings were organized according to main themes and topics as well as the research questions. Combining them directly with an analysis avoids unnecessary repetition as well as preco-cious interpretation of the findings.

Ethical Considerations

The MRS Code of Research (MRS being the world‟s largest research association) states that as a general rule the respondents‟ anonymity must be preserved at any time (Bryman & Bell, 2007). If a respondent‟s identity will be revealed it must be specified who will have ac-cess to the data for which purpose and it must be ensured that the data will be used for re-search purposes only (Bryman & Bell, 2007). To avoid any misuse of data and to encourage more companies to participate in our research, we have assured every respondent that their anonymity would be preserved throughout the entire research process. For this reason all participating businesses in this paper will not be specified by name but solely by the sector they operate in.
All interviews were recorded while conducting them in order to facilitate the data analysis as well as to ensure that the interviewees were not misheard, and that all information pro-vided would be captured correctly. The respondents were made aware of the fact that the interview would be recorded before the interview took place, and each of them agreed to it.

Empirical Findings & Data Analysis

In this section the sample companies and the interviewees in the study will be presented briefly to facilitate further reading. Afterwards, the core findings will be presented arranged according to the main areas to be covered in our research questions. These areas include: reasons for choosing a niche strategy, tradition, transitions, challenges, success factors, growth ambitions and growth strategies. The empirical findings will furthermore be ana-lyzed by connecting them to the frame of reference.

Sample Companies & Interviewees

The interviews were conducted with eight people representing eight different family busi-nesses in Canada. The businesses operate in various industries and also vary in size. All in-dividuals were family members and for the majority of the interviews, were also either the founder or current owner of the company. Furthermore, the interviewees belonged to dif-ferent generations ranging from first till third, which delivered a wide scope of perspec-tives. A table summarizing the key details of these companies can be found in the appendix (p. 51).

Company A

Company A offers cold water scuba diving charters and guest lodges. It was established in 1972 and has two employees. We interviewed the current owner of the business, who is the founder‟s son and therewith second generation. The initial founder has not been involved for approximately 15 years. When second generation took over the business, major changes were made to both their marketing strategy as well as the quality of accommodation and service. The majority of the time package deals are offered to the guests including either guided or non-guided dives, complete diving equipment, one of eleven guest rooms at the lodge and meals.

Company B

Company B specializes in drilling fluid recovery / energy eecovery systems. The company began in 2007 with the development of a technology that is used in the oil fields to recover oil that is lost during the drilling process. This technology was developed and patented and used to start the company. Now company B provides this technology to oil drilling compa-nies in Canada, the United States and Albania and expects to double its revenues next year. It is run with five employees and involves two generations of family. The interviewee was the company owner and founder.

Company C

Company C is a map making company which was founded in 1978. We interviewed the re-tired creator of the business, whose son is now running the second generation family busi-ness. The company has 24 employees and is North America‟s leading developer of map-ping products and cartographic solutions. Furthermore, Company C has been announced Canada‟s largest producer of retail maps for cities and roads. Since the business‟ establish-ment, the map making industry has changed dramatically and gone from manually drawn maps to digital ones. A merger in 2010 with another map making company from Canada contributed to a much more diversified product offering.

Company D

Company D was a family owned and operated orthotics business that was sold in 2003 to a larger company. All information gathered is pre-sale information. The company began in 1980 with the development of a poly-axial hinge that, once patented, was used to build custom-order knee braces. Once the company had established a strong brand name in the market, it diverged into selling non-custom braces as well. At the time of sale, the company operated with 70 employees, and had three generations of family members involved in the business. The interviewee was a third-generation member of the family who was responsi-ble for sales and assessing patients. This person remained with the company after its sale and is currently employed by the purchasing company.
Company E
Company E is a farming, processing and exporting company which was founded in 1979 and has 70 employees to date. We spoke with the Vice President, who together with his two brothers now owns the business. He belongs to the second generation, and the third generation of the family is also currently involved in the business. Company E grows and exports peas, lentils and chickpeas worldwide. The business started as a farm, which was not big enough to make a living for the family as it grew. This problem was solved by di-versifying and enlarging the farm and developing its own certified seed, yellow peas, which at that time was completely new to the market and was a niche product.

Company F

Company F is North America‟s leading furniture companies and one of Canada‟s largest manufacturers of household products. The company has operations in Canada, the United States, and Mexico. The business was established in 1944 and has over 7000 employees. We interviewed the current owner and CEO of the business, who is second generation, and the third generation is also involved. The company consists of an upholstery division, a second operating division pursuing a different concept, as well as various self-owned and operated real estate divisions and showrooms. In 1944 the furniture company was started by a refu-gee from Russia, whose only skill was producing simple handmade wood household pieces, which was a niche product. Today the business is still serving various niches, such as up-scale luxury furniture or affordable modern furniture.

Table of Contents
1 Introduction
1.1 Background
1.2 Problem
1.3 Purpose
2 Frame of Reference
2.1 Small Business Growth
2.2 Family Businesses
2.3 Niche Markets
2.4 Conclusion
2.5 Research Questions
3 Methodology 
3.1 Research Approach & Method
3.2 Data Collection & Analysis Techniques
4 Empirical Findings & Data Analysis
4.1 Sample Companies & Interviewees
4.2 Data Analysis
5 Discussion and Conclusion
5.1 Theoretical Implications
5.2 Practical Implications
5.3 Concluding Remarks
6 Limitations and Future Research 
6.1 Limitations
6.2 Suggestions for Future Research
List of references
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An Exploration of Potential Growth Strategies for Niche Family Businesses A Study of Family Firms in the Canadian Market

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